The Future of Retail in the Post-Covid Era

Will the desire for human connection attract shoppers back to malls?

August 10, 2021, Gökce Sandal

Along with tourism and the events industry, retail has been one of the most heavily affected sectors by the onset of the Covid-19 pandemic. Retailers were already struggling with the decline of the brick-and-mortar stores before 2020, and the pandemic presented them with new challenges such as store closures, employee layoffs and sharp declines in consumer spending. Yet, despite the sudden hit, we anticipate that the retail sector will bounce back with a renewed focus on experience design and human connection.


This article is based on our latest foresight radar, Exit from Covid-19, which features 50+ cross-industry trends impacted by the pandemic. Check out the radar for futurist-curated insights on the world after Covid-19.



How has the pandemic changed the retail landscape?

Pandemic or not, the shift to online and omnichannel shopping was already well underway in the retail sector. Mass store closures only served to expedite the transition - the industry swiftly adjusted to the pandemic conditions and adopted new safety measures such as contactless payments and curbside pickups.

Although the shift to online shopping wasn’t always enough to compensate for the loss of in-store revenue, and there was a series of bankruptcies across the sector, not all retailers were affected negatively. Previously underpenetrated sectors, especially essential retail such as groceries and pharmacies, saw a big jump in online sales.

According to KPMG US, daily grocery sales increased by 110% in April 2020 compared to the pre-pandemic levels. Accenture also reports that online shopping rates by infrequent e-commerce users, those who use online channels for less than 25% of their purchases, has increased 343% since the outbreak.


New digital shopping behaviours

As consumers across age groups and income levels adopted online shopping en masse, the pandemic also spurred new shopping behaviours.

Livestream shopping and social e-commerce became widely popular, especially among younger generations. Other behaviours like impulse and panic buying also offered shoppers the feeling of control and escapism that they were craving amidst the stress and uncertainty of lockdowns.

While consumers will hold on to some of the behaviours they adopted, other pandemic-induced changes in consumer behaviour, such as hoarding and the increased interest in health-related products, have already started to fade as we’ve become more used to living with the pandemic.


Livestream shopping has been in China since 2016, but the industry saw new heights during the pandemic.


A Comeback of the malls?

While store closures boosted online shopping, they also highlighted its pain points – lengthy and tiresome return processes, late deliveries, and the disappointment of receiving an item that doesn’t match the expectations.

As many consumers will seek physical experiences and human connection after prolonged periods of lockdowns, many may now return to in-store shopping for the convenience of fast shopping, in-person customer service and the pleasure of experiencing items before purchase.

In fact, experts argue that the pandemic may even save malls and brick-and-mortar stores, which had otherwise been on a steady decline for years. As the pandemic made people appreciate public spaces more, malls now have an opportunity to capitalise on this shift and become new community centres with grocery stores, third workspaces, and more.

According to Futures Platform’s Foresight Analysis Manager Max Stucki, this would also impact city centres: “It is interesting to see how the city centres will fare after the pandemic. The normalisation of working from home, combined with the potential comeback of malls, can mean that downtowns are increasingly only reserved for experiences and leisure - restaurants, theatres, bars and so on,” Stucki explains.


The shift to shopping local

Limited mobility due to pandemic measures, along with the larger shift to conscious consumerism and the desire to support their community during times of economic hardship, also motivated many consumers to shop locally.

According to Capgemini, 79% of consumers are re-evaluating their consumption based on social responsibility and environmental impact. Hence, as we gradually transition out of the pandemic, the emphasis on shopping local is likely to stay.

In the future, this may encourage chain physical stores and malls to place more emphasis on localised selections. For example, chain stores may offer exclusive items and experiences in different stores, and malls may allocate more rental space for hyperlocal tenants instead of global chains.

“The interest in local production may tell a more meaningful story than we think. The pandemic forces people to look close, to look at the immediate surroundings. This is a significant change from times when it was only fashionable to look far - be it exotic foods or travelling to some distant country. Preserving this appreciation of the immediate may help us realign our values towards more sustainable approaches,” Stucki adds.


"The pandemic forces people to look close, to look at the immediate surroundings. This is a significant change from times when it was only fashionable to look far - be it exotic foods or travelling to some distant country. Preserving this appreciation of the immediate may help us realign our values towards more sustainable approaches.”

Max Stucki, Foresight Analysis Manager at Futures Platform


Envisioning the post-covid era of retail

With the vaccine rollouts and store re-openings, the retail industry is already bouncing back. Depending on income, customers will return to shopping at different speeds and with the different behaviours they adopted during lockdowns.

Physical stores will likely continue facing the same digital disruption they did before the pandemic, prompting retailers to rethink their in-store experiences. We can expect changes in store layouts, more emphasis on atmosphere design, health-boosting measures and more localised offerings in the years to come.

As the pandemic underlined the need for every store to compete successfully online, many retailers may now adopt a digital-first approach in their physical stores, and use physical spaces for exclusive offerings to complement the digital experience.

“The future of retail design and experience will be driven by in-store innovation through customer data collection and analysis. Personalised experiences will be key to meet new customer expectations,” says Shiori Ota, Foresight Analyst at Futures Platform.

Retailers across sectors now need to consider how their customers evolved during the pandemic and address their new priorities in innovative ways.


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