Accelerating retail trends - Digital vs. Destination

The Covid-19 crisis has acted as a great accelerator for many existing trends in retail - digital adoption being the most obvious. We have seen 3-5 years worth of change in as many months. As we emerge from the crisis, retailers will need to adapt to changing consumer behaviour to remain relevant, however it is not a simple task, the reality will be deeply nuanced.

Take value vs values as an example. The inevitable recession will mean that consumers have less to spend and so will seek greater value. Retailers will need to adjust pricing proposition and range architecture to adapt. However, values will also be more important after the crisis and customers will judge retailers even more rigorously on how they conduct business, treat employees, suppliers etc. Not an easy balance to strike.

Similarly, this article draws attention to another accelerating and conflicting trend - digital vs destination. The acceleration of digital channel adoption across all categories is clear and, given the duration and likely sawtooth recovery from the crisis, almost certainly habit forming and therefore permanent. However, some retail - especially of discretionary products, of which luxury is an extreme example, requires experience to make it relevant. So while there will undoubtedly be less retail space post-crisis, what remains needs to be truly special. 

Striking this balance is a real challenge for management teams across the industry. Solutions will need to be carefully tailored for each company and brand. This leads us to another accelerating trend inside retailers - capability vs. capacity. Never before have management teams needed to be more agile and intelligent in their decision making. Equally with furloughed staff and cost cutting, capacity has never been more constrained. Retailers that overcome this dichotomy are likely to be most successful in the long run.