Veteran retail expert George Minakakis, a global retail executive with over 25 years of experience, says the big question the industry will have to deal with once the COVID-19 (coronavirus) crisis is over is how does it break consumer habits that are being ingrained right now as people cocoon and shop less.
“That’s the big question. The old school will tell you that after 30 days of creating new habits they’re almost permanent. I think we all know we’re going for a longer run. Fear of catching this virus has settled in, and it’s changing our priorities, I’m calling it taking care of your “ship” if you will,” said Minakakis.
“The “s” stands for shelter taking safety in your home, the “h” stands for looking after our health, the “i” stands for being informed and the “p” stands for play, looking for ways to pass time and deal with this. This is pre-shaping everybody’s minds in their homes. There’s no wants in this. It’s needs.”
Everybody is asking him how do they rebound out of this? It depends on how entrepreneurial and optimistic you are, is your cup half full or it is half empty or is your cup “Trump full.”
“Donald Trump thought that this would have been over by Easter but the reality is that it’s ongoing. The longer this goes there will be fallout with the consumer because they are moving to ecommerce far more than ever before,” said Minakakis.
Reality will come to bear when authorities tell the public they can go on with their normal daily activities and go out. But what is on the consumer’s mind? How has this changed them? Does the risk of a second wave of the virus hitting curb their appetite for shopping freely? Will people take that chance and go to a mall? Probably not. It’s not going to happen, said Minakakis, who is CEO of the Inception Retail Group.
“Everything that is being reshaped right now is about necessity,” he said.
“At the end of the day whatever we’re seeing by way of consumer behaviour in Asia is what’s going to happen here. They’re not in a hurry to go back in the stores. You’re hearing stuff in China. I lived in China. I wouldn’t count on what you hear that the consumer is back. Maybe some but not everybody. At the end of the day you’re going to find people going back out to shop but for necessities not for any wants or apparel or for any experiences, nor going into a restaurant or a bar.
“I know that all of that is going to be pared back a great deal because the risk is still on everybody’s mind. Consumer behaviour is being reshaped by fear, you’ve been told to isolate, practice social distancing, you’ve been told to wash your hands frequently. Are consumers going to return to malls or stores where it’s shoulder to shoulder? Not likely. Not right now.”
Minakakis said if there is not a next wave of the coronavirus in the fall then things will start returning to normal and we will have dodged a bullet.
“But if we have another wave, whatever has been imprinted in our minds in terms of behaviours we will carry that on forward because now we’re scared twice not once,” he said.
This new environment will force retailers to change to adjust and accommodate the nervous consumer.
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“They’re going to have to do something to give trust to the consumer that the retail environment that they’re walking into and the workplace that the employees are in is safe. How do you do that without significant redesigns of stores and operations?,” said Minakakis. “Those are some very complex challenges that retailers are going to be faced with coming out of this.”
“Experience says and history shows that we don’t prepare very well for change. People don’t and business doesn’t. Because of that, how are you going to prepare for this next retail environment?”
Minakakis said he believes that malls are in real trouble and they need to be rethinking shopping. Consumers will be looking for health and safety aspects in their shopping choices. I believe they will choose open air centres versus a closed shopping environment. Store choices will also be tricky if it’s too small and crowded.
“How do you define customer experience when the experience now is contactless. ‘I don’t want to have an interaction with somebody face to face’. That’s part of the whole re-shaping of the marketplace. E-commerce will take care of some of those concerns, but not all. It’s going to have a lot of retailers in a quandary,” he added.