In this webinar, Daniel B. Kline, accomplished writer, editor, and media personality for The Motley Fool, shared his insights on the impact COVID-19 has shown on the retail landscape.
The full video can be found HERE .
Here are a few key points Kline touched on during this webinar:
The term “retail apocalypse” is a lie.
- Kline explained that if he was presenting this webinar last January, he would still have predicted the fate of companies that are currently struggling. While COVID-19 has undoubtedly accelerated their downturn, he noted, “You could have predicted eight years ago that most of the companies that aren’t doing well now wouldn’t be doing well. Bad companies with bad management have failed.” On the other hand, while figuring out the balance will be difficult, Kline predicts that more retail models will begin to devote less floor space to merchandise and more to back-hand fulfillment. He explained that it wouldn’t be a surprise if Amazon will open owned and operated stores of some sort in the near future to show off its online products.
Retailers don’t need to reinvent the wheel, but they definitely need to adapt.
- With in-person retail activities at a halt for the foreseeable future, the opportunities for business innovation are endless, and adaptability is a must. Kline highlighted the need for good management in place in order to ensure success, “You have to look and see what’s working. This doesn’t mean you necessarily have to be the leader.” He mentioned Starbucks as an example of a great leader in regards to digital adoption (i.e. mobile ordering, etc.), which has proven to pay off for them during the pandemic. This in turn has allowed competitors such as Dunkin’ Donuts to leverage the same strategy successfully without having to reinvent the wheel. Moreover, COVID-19 has also brought light on possible growth areas for the retail landscape including ghost kitchens that allow local restaurants to rent out space, rather than owning their own, as well as micro-fulfillment spaces for larger brands.
How Companies Will Think About Real Estate Moving Forward
- Kline noted that in general, there is less need for store real estate. Trends show stores that were breaking even, losing money or located in C-level malls where there is little to no traffic are closing, if they haven’t already. Innovation and industry expertise are two factors that Kline believes retailers need to keep in mind moving forward for the future. For instance, he gave the example of Barnes & Noble missing out by not leveraging their own resources to implement music lessons into their stores.
The Future of Malls and Other Experiential Retail Stores
- Prior to the pandemic, there was a shift towards experiential retail in malls and other venues. Kline predicts that the lesser malls , or those that weren’t popular to begin with, will close, which can be seen as a good thing. In 2019, 11.4% of all retail sales were digital. However, Kline doesn’t see experiential retail going away any time soon, but rather believes it is on pause for the moment.
The Future of Furniture Retail Stores
- Kline noted that companies such as IKEA and Costco, which have doubled-down on reasons for customers to visit their stores by implementing food courts and catering to experiential retail, will become more popular. On the other hand, furniture stores that follow an e-commerce model that don’t allow consumers to view products in person, such as Wayfair, may not be as successful.