As remote work increases in popularity, you might wonder how this new trend is affecting retailers – especially downtown cores in Canada. Retail experts Rocco Mateo, Tim Kocur, and Lisa Hutcheson discuss the impact remote work has on retailers and what can be done to minimize the hit.
“In the long-term I think a lot of retailers are going to suffer as more people work remotely, especially in the downtown cores and landlords will also find it very difficult to fill up their spaces. From a work-family balance, I think working at home has done a lot of good; however, there will be a retail impact coming out of this for sure and retailers need to reinvent themselves,” says Rocco Mateo, a Retail Executive in Montreal.
As working remotely has become the new normal, companies have been trying to find a new work balance and it has become a difficult debate throughout the country. Although working remotely has its benefits, it could also impact retailers in cities. Recently in Halifax, Nova Scotia, the Halifax Chamber of Commerce announced it wants municipal employees to return to the office for at least four days a week to bring back traffic to the downtown core. The Chamber is hoping this will bring back vibrancy and increase spending downtown, but is this the right direction?
“I think Halifax is at the forefront of what a lot of organizations will do right now, but it is not viable for the long-term. I think a lot of retailers will suffer, especially in the downtown core and office spaces. So I would suspect that some announcements will be made from major employers to get people back into the office. Maybe not on a full-time basis, but definitely at a minimum of three days a week at the office for sure and I think it is very important for the viability of our economic situation,” says Mateo.
Mateo says in Montreal, more than half of people are working from home at least three to four days a week and has seen it impacting downtown. Before Covid, Mateo says most people worked five days a week in the office and went out for lunch but now, those lunch spots for example are suffering because they are not having the same amount of traffic and same goes for retail shops.
To help with this transformation, Mateo suggests retailers need to be placing more effort into their e-commerce platforms as until people return back to office, more people are purchasing online.
“We definitely have been seeing more retailers work a lot harder on their e-commerce platforms because their customers were no longer going into the store since they were working remotely. And retailers also need to create a wow factor and go above and beyond with customers and step up in the game and work hard to keep their customers loyal,” says Mateo.
No Time for Shopping
People who do spend two to three days in the office already do not have the same amount of time they used to compared to full-time in office, shared Lisa Hutcheson, the Managing Partner of J.C. Williams Group. Hutcheson says the Toronto downtown core has “really seen the brunt of remote work on retail” and also has noticed employers are not socializing or shopping as much as before Covid as much as they used to.Â
“When employees come into the office today, they are staying focused because if they are commuting – they are not doing it for shopping, they are doing it to put their time in the office,” says Hutcheson. “Before, there would be some spillover and more socialization, but people have gotten out of the habit of that social element at work because they are only there for a shorter period of time. Now, employees want to make sure they are being productive and they are not going out shopping like they used to.”
To survive the new work lifestyle, Hutcheson suggests retailers need to start understanding what their customers want from a shopping experience while they are in the office and start looking at new ways they can pivot their business to meet what the new working consumer wants.
“Although companies keep wanting to mandate people to come back full-time, I think we have created a workforce that has identified that people can work hybridly. And the retailers that are winning and the properties that are winning, are really working hard adjusting on how they serve the customers,” says Hutcheson.
Adjusting to the new consumer base could be looking at extending or shortening retail hours, accessing consumers more through emails and social media platforms, having special events, or promotions. Understanding when people are working in the city is also important as Hutcheson says some people are not even in the office for the full day, but leave at around two “as they don’t stick around anymore after a meeting – they are gone, so how will retailers address this?”
Tim Kocur, the Executive Director of the Waterfront BIA, also says understanding the new work environment is crucial for retailers. Currently, Kocur says the city looks different depending on the day as mid-week has significantly more traffic compared to Mondays and Fridays. He has found that mid week is almost back to normal with sixty percent of people working in office; however, on Fridays the number goes down to twenty-seven percent.
“If people are coming in fewer days they are more likely to miss Monday and Friday especially, so retailers need to adjust to that and in some cases, food courts in the office buildings on Tuesdays, Wednesdays, and Thursdays have been busier than ever before because people are excited to go to the nice coffee shop now that they are in the office two to three days a week, but Mondays and Fridays are where it is nowhere close to the percentage of pre pandemic average,” says Kocur.
Due to the changes on different days, to adjust to the new remote culture, retailers should make changes to their hours of operation. For example, Hutcheson suggested on busier days to be open longer and maybe on Mondays and Fridays, to shorten them. Each city has different working vibes and retailers need to be aligned with what works best for their city.
Kocur says the problem goes beyond retail experience, as even if people worked remotely full-time, the city and retailers should create experiences to attract consumers back to shopping downtown. Mateo in Montreal says that the city is creating more experiences to draw people downtown including a lot of festivals lined up for the summer, “which will push people to downtown Montreal,” says Mateo – and other cities should do the same.
“A key concern over the next few years was to make sure that retail fills in with a vibrant and inviting retail experience. For example, coming down to see the new amenities, new restaurants along the waterfront, new patios for the summer, and creating events that encourage people to come downtown outside of work,” said Kocur.Â
As the debate of remote work versus in office continues, Kocur, Hutcheson, and Mateo agree that there needs to be a balance between the two. However, either way retailers need to make changes because as employees get used to working at home, it is unlikely people will want to return to the office on a full-time basis and retailers are going to have to find new alternatives to reach consumers throughout Canada.
It’s a great insight that even as more companies ask employees to return to work (at least some of the time), those who do aren’t spending their time shopping in the same ways as they did pre-pandemic. This is a fundamental shift in buyer behaviour that retailers face. We need more ideas in addition to “improve your online experience” and “change your hours”. Downtown cores need more vitality, excitement and innovation to give people more reasons to want to come downtown, spend their precious time and money here.
The big commercial and office landlords are unlikely to move first – at least not until their lease renewals get so hurt that they need to do something. That time is coming, but the damage to entrepreneurs will have already taken its toll. Municipal governments are slow, bureaucratic and broke. The BIA’s simply don’t have the resources. The movement has to start with the ma and pa entrepreneurs, restaurants and retailers whose livelihood relies on foot traffic.
For that to happen, we need to organize first, and then we need the support of the other stakeholders mentioned to help fund the plan.
There are ways to turn the impacts of a global pandemic into great opportunities for the brave, innovative, and creative entrepreneurs who make downtown areas so good. But, it can’t be done alone.