Where Do Retailers Go From Here?

Businesses closed and partially open
How long can businesses survive like this

A raging virus, shutdowns, lockdowns, apprehensive consumers, frustrated managers, and failing businesses are all around us. These are the scars of a pandemic. Where do businesses go from here? Even on the heels of a vaccine, that light at the end of the tunnel seems distant. Fatigued consumers are ordering more online, traveling less, and seem to have accepted new behaviours. That e-commerce revenue has migrated from physical stores. It’s not just retailers; restaurants, theatres, travel, hotels, and services are all taking a hit. The holiday season, where most retailers have broken even, is in jeopardy. From the very beginning I’ve been telling businesses and readers that reopening will not be business as usual.

The real challenge is business survival. Will governments provide enough financial support for businesses and displaced workers? Work from home has become more familiar. How will central business districts rebound if companies don’t need large office space? And what about malls and retailers? They are in my opinion on a collision course because they’ve been losing traffic for several years.  The pandemic has been a tipping point. And as many retailers’ close stores or file for bankruptcy, the shopping appeal of malls diminishes further. The GAP has decided to leave Malls. This leaves larger retailers such as Walmart, Home Depot and Costco representing North America. Loblaws (other grocers) and Canadian Tire for example representing Canada, stand to benefit the most from shutdowns and lockdowns.  Where does that leave other retailers and workers?

So, where do we go from here?  

I believe that we have it all wrong! We are not going to recover into an economy that we left behind and nor will consumers return  to their past behaviours. Even with a vaccine I don’t see consumers that are health minded to simply jump right back in. That’s just not reality!  What kind of economy will businesses be facing in the next 12-18 months?  Technology has made convenience and contactless shopping unmistakably easy. We need to learn from businesses and other countries that have developed their consumer markets further. “If you want to move into the future, look where the future has already taken shape.”

We hear a lot about China’s recovery; however, comparisons are not realistic. Their media narrative is controlled, as is the virus in their country. Unlike the western world, our messaging on the virus is all the news!  But, we need to look past that if for just a moment to peek into the future. China like many developing countries skipped a lot of growth pain such as having to build extensive infrastructures around outdated technologies like land lines. They also skipped the Retail Apocalypse. In fact the use and adoption of technology by consumers has enabled retailers to keep up to them, there was no choice. We need to recognize that some countries have been developing the future of shopping for sometime. The developed worlds problem is we can’t let go of the old economy. Perhaps Covid-19 has taken care of that for us.

Recovery is everyone’s responsibility. 

technology is the new economy
digital is just the beginning, technology is the new economy.

While Governments plan audacious economic relaunches, which in my opinion are too old school to hit the mark. The onus must really be on all businesses. Especially those that didn’t invest enough in digital transformations. In May of this year, I was telling business leaders and owners that they needed to become retail streetfighters. Whether you called it Guerrilla Marketing or anything else, they needed to roll up their sleeves and be more self-sufficient. Therefore, if businesses want to survive they cannot take things for granted, that someone will make things right or that we will restart where we left off. My conviction is that we are in a Brave New World right now, and we need to be better prepared. That’s because “technology is the new economy”, you are either in or out. I understand that small businesses are faced with different challenges. However having grown up in a family business I know the hardship that goes with it. Unfortunately, the reality is that covid-19 has created unbearable hardship for them.

In his book, A Brave New World, Aldous Huxley wrote, “Most human beings have an almost infinite capacity for taking things for granted.” We can’t take that risk or let that be our go-forward strategy. It will likely fail.

George Minakakis is the CEO of Inception Retail Group and author of the Great Transition The Emergence of Unconventional Leadership