Here are some possible scenarios for post-pandemic retail.
Thirty-five years ago, William Severini Kowinski’s book, “The Malling of America,” bemoaned “cathedrals of consumption,” or malls, had replaced everything that used to happen on main street. All of those spontaneous interactions, community connections, and daily rituals were now under a single, very large roof somewhere on the edge of town. Kowinski feared that convenience overtook connection in our new “United States of Shopping,” a concept exemplified by the proto-meme, “Shop ‘til you drop.”
Fast forward to the present moment. As many have pointed out, we’ve gone from the confined spaces of malls (everything under a finite roof) to the internet, where the roof is now infinite (if there is a roof at all). What once seemed convenient — different stores, free parking — now seems superfluous. As a consequence, physical stores that fail to achieve destination-worthy status (like this gorgeous Restoration Hardware outpost) find themselves marooned in a bygone cultural moment.
What happens to the space stores once occupied?
COVID-19 accelerated this long-predicted shift, commonly referred to as the retail apocalypse. The numbers are shocking. In addition to an acceleration of high-profile retail bankruptcies like J.C. Penney, Neiman Marcus, and J. Crew, Coresight Research estimates we could see 20,000 to 25,000 stores close for good in the U.S. this year and 55% to 60% of those closures may take place in malls. In this context, with a roiling pandemic as a backdrop, we’re tasked with imagining the post-apocalyptic future of retail. New questions emerge: what happens to the space stores once occupied? How do we keep workers safe? How do we maintain the fabric of civil society if spontaneous retail interactions disappear?
As part of Salesforce’s Office of Innovation research team, we constantly look across internal and external inputs for trends. During this time of upheaval, I’m struck by how the accelerating shifts we’re sensing in the world of shopping tie back to the enduring human need for convenience and connection — needs that drove the formation of both main street and the mall, to begin with.
Shopping with augmented reality (AR) [Shutterstock]
Here’s one way I think about the current shift in retail: companies that provide neither convenience nor connection are no longer viable as business entities. Companies that provide a dynamic and responsive combination of both are best positioned to win market share in the new retail landscape.
To see where things are going, I think it’s useful (and also fun) to try and wrap our minds around the concept of the metaverse, a future interactive blending of physical and digital worlds. Venture capitalist and former head of strategy for Amazon Studios Matthew Ball encourages us to imagine it like this, “You can walk into any experience or activity, and potentially address almost any of your needs, from a single starting point or world that’s also populated by everyone else you know.” In other words, the metaverse represents the ultimate convergence of convenience and connection. In this future we can’t yet fully understand, retailers will need to serve both of these needs, too.
Convenience has ruined us forever (in a good way)
Now back to our current reality: let’s focus for a moment on convenience. The pandemic accelerated digitalization throughout the globe as consumers and businesses who were on the sidelines, raced to adapt to our socially distanced world. Grandparents are dialing into doctor’s appointments from care facilities. Grocery delivery and restaurant takeout are blossoming into behavior norms. We’ve seen a quantum leap in digital shopping, erasing the generation gaps that previously held old models in place. People of every age are now shopping online.
Yum China CEO Joey Wat recently observed (behind a paywall), “Customers are very ready to order on their mobile phones … double what it used to be. Mom and pop shops, hair salons, everybody is going for digitization.” What was already insanely easy is getting easier as organizations compete to design for the last mile, turn stores into fulfillment nodes, and up the ante for the fulfillment of new needs, like two-hour grocery delivery.
Convenience isn’t just about getting things faster. The idea of “going shopping” has changed from driving to a singular destination to something much more fluid and persistent. Salesforce research released some eye-opening new statistics. Sixty-three percent of U.S. millennials and 67% of Gen Zers say they’ve made a purchase over social media since the onset of the pandemic — a shopping habit that was unthinkable five years ago. For consumers — increasingly of all ages — it’s more convenient to make an essential or indulgent purchase while connecting with friends or catching a stream on Twitch than it is to go to any physical location.
“The optimist in me imagines the best of main street and the mall meeting the convenience of ecommerce at an exponential scale.”
Which brings us to connection. Both main street and the mall offered consumers the chance to interact, sometimes in surprising ways, with other humans. When I close my eyes and think malls in the late eighties and early nineties, I think less about the stores than I do the people: packs of teenagers with not-subtle hair, seniors mall-walking in velvety tracksuits, siblings ignoring other siblings. By comparison, Amazon is a lonely place: an endless virtual warehouse of shelves stacked to the ceiling where you can find pretty much anything, but there isn’t a human being in sight. Clearly, for all of the convenience we have gained, we’ve lost something big.
But the need for connection is far from dead, and it hasn’t disappeared from retail. Some of the most mind-blowing innovations we’ve tracked during the pandemic are around people finding ways to connect despite a lack of physical proximity. Our trendspotters in Japan told us about Tacnom (Japanese language), an online space where people can drink with strangers from the comfort of home. Zappos recently started a customer service line people can call to talk not just about shoes, but anything at all that’s on their minds. American Eagle threw a virtual prom and Chipotle hosted a virtual prom after-party. Peleton introduced a hashtag program to make it easier to ride with like-minded others.
A few years ago, everyone was talking about experiential retail, and while I love a good pop-up store or ice-filled “cold room” for testing out a goose-down jacket as much as the next person, meaningful connections feel more futuristic and lasting than Instagrammable novelties. When I look at things like local grocery stores building community through virtual programming like cooking classes and live Q&A’s, I foresee a future where convenience is a given and connection is the differentiator. Notice how the most futuristic-feeling platforms, like video game phenoms Fortnite and Roblox (behind a paywall), seamlessly blend both.
In the crystal ball …
What does that mean for shopping? The path to greater convenience isn’t easy, but we know it involves digitization and the increasingly intelligent use of consumer data. The path to connection is more complex, but arguably more transformative in that it is as much about values and human needs as it is about engagement.
Think about things that matter right now, like taking a stand for social justice and supporting businesses that align with your values. Imagine not having to place these higher-order concerns aside in favor of convenience. What if you could shop on Amazon and support, say, black-owned local businesses at the same time? To me, that feels as much like the future of retail as virtual platforms. Or take it further. Imagine an art supply store teaching graphic design, helping people succeed in tomorrow’s job marketplace.
When I think about the future of retail, the optimist in me imagines the best of main street and the mall meeting the convenience of ecommerce at an exponential scale. I picture a dynamic landscape of opportunity, optionality, and engagement that will bring people together in world-changing ways.
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