When COVID-19 swept across the world, it largely took in-person shopping with it, leaving brick-and-mortar businesses scrambling to adapt.
Is this the "retail apocalypse" pundits have been shouting about for years? Has 2020 finally killed brick-and-mortar retail?
Harley Finkelstein, President of Shopify, doesn't think so. Instead, he believes this year will bring in a new era—one built on how customers want to shop.
He believes it’s an era led by resilient retailers.
Searching for value
Consumers want value, and value is far more than a low number on a price tag. If that were all consumers looked for, all competition would be a race to the bottom.
"Some of my most favorite retail experiences have been offline," Harley told me. "What I look for as a modern consumer is value. I don't mean value in terms of pricing value. I mean experience value."
"Some of my most favorite retail experiences have been offline. What I look for as a modern consumer is value. I don't mean value in terms of pricing value. I mean experience value."
Today, in-person retailers have an opportunity to create that value-driven experience as they position themselves as curators and advisors.
From there, that experience creates a relationship built on trust, care, and empathy—one where the customer only needs to say, "I'll have the usual," and knows the person behind the counter knows exactly what that means.
It's an experience that caters to the customer’s needs. If you ask Harley, that is true value.
Retail has been thrust into the future
We know that ecommerce already plays a huge role for retailers, and its share is only getting bigger. When Harley joined Shopify 11 years ago, ecommerce made up only about 5% of total retail.
But over the next decade, it blossomed to 15% by January 2020—then coronavirus hit. From January to October, ecommerce grew from 15% of total retail to about 25%—10 years of growth in only 10 months.
According to Harley, "It feels like from a retail perspective the year 2030 has been pulled into the year 2020."
“It feels like from a retail perspective the year 2030 has been pulled into the year 2020.”
Comfortable retailers had the rug pulled out from under them when they lost the ability to make brick-and-mortar sales. Their entire business models had to change overnight.
How would they adapt?
Resistance vs. Resilience
As President of Shopify, Harley's watched and helped a lot of retailers respond to the curveballs of 2020. He's noticed retailers respond in two vastly different ways—resistance or resilience.
"The resistant ones are just going to wave their hands and yell, 'I can't believe this is happening to me. What do I do?',” he said.
Instead of doing something about it, they wait. Waiting for the world to go back to normal so they can get back to "business as usual"—all the while worrying that it never will.
But resilient retailers adapt.
These entrepreneurs rethink the foundation of their businesses—what do we sell, and how?
He sees these resilient retailers questioning old assumptions, taking in new information, and making new decisions to pivot and adapt their businesses.
For this reason, he thinks "retail will never die because it's always going to change and evolve based on what consumers need, based on the circumstances in the world. The key, though, to be timeless and to be successful over the long run is to be resilient."
“Retail will never die because it's always going to change and evolve based on what consumers need. The key is to be resilient.”
3 ways for resilient retailers to rethink the 2020 holiday shopping season
1. Rethink how you engage with your customers
“I remember when I was a kid going to New York City with my parents and going to see some of the window displays of some of the big department stores,” Harley said.
“Well, that's not going to happen this year. People are not going to congregate around a window, but maybe there's a way to engage them.”
This holiday season won't be the same as years past, but that's okay. It'll be different. Harley believes it’ll be unique in its own way.
2. Rethink how you use your location
Retailers won't be able to rely on foot traffic to drive your holiday sales this year. Between capacity restrictions and the danger of being in large crowds, stores may be better used for other purposes.
Harley's idea: Turn your store into a fulfillment center.
By transforming retail space into a fulfillment center, you can adapt your business model to accommodate customers ordering online. This way, your staff can gift wrap it and ship products right from your brick-and-mortar store.
3. Rethink your in-store experience
It won't make sense for many retailers to shut down their stores completely, but the ones that can open will only be able to let in a few customers at a time. How do you get more people in without ruining their shopping experience?
This is a great opportunity to experiment with new technology and tactics, Harley says. You could use QR codes for people to scan items and check out from their phones. Your staff can package the items and bring them out to the customer while others are browsing.
The bottom line: No one had any experience dealing with a year like this one. That thought is scary—but for resilient retailers, it's also an opportunity. People miss connecting with their friends and loved ones and want to show them that they care about them. They’ll show them by giving gifts.
Resilient retailers will find ways to facilitate that expression of love and compassion by showing a little of their own to their customers.
Finally, I asked Harley what resilience means to him.
His answer?
"Throughout my entire life, this idea of entrepreneurship has been the tool that I've always activated and took out of my tool belt whenever I had a problem. And more and more what I'm realizing is that I could replace the term entrepreneurship with adaptability or resilience."
"More and more what I'm realizing is that I could replace the term entrepreneurship with adaptability or resilience."
There's more where that came from...
This article was part of a larger interview with Shopify's Harley Finkelstein for the Resilient Retail podcast. View that episode and others from Season 1 by visiting the Resilient Retail site, where you can sign up to become a Resilient Insider so you'll never miss a new episode, article, or exclusive offer!
Go to episodeResilient Retail is available to stream on Apple Podcasts, Spotify, and YouTube.
