Post-Pandemic Retail Effects Will Be Long Lasting

As has been widely reported already, Black Friday and Cyber Monday broke all records for ecommerce shopping. It was no surprise, given the pandemic’s seemingly out-of-control spread, and the CDC’s pleading with folks to not congregate in public places.

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Interestingly, as reported by my Forbes.com colleague Joan Verdon, besides the masters of the digital universe Amazon
AMZN
, Target
TGT
and Walmart
WMT
the other digital winners were the army of small businesses, many of whom have thrown in with Shopify. Their merchants tallied over $5 billion in sales from Black Friday through Cyber Monday, representing a 76% increase over last year. Etsy saw a 108% increase in sales in November, over comparable 2019 sales.

Little in the Middle

Another bright spot amid a very dismal period in our collective lives came with reporting from Adobe Analytics that small retailers, some of whom were only barely selling online at the end of 2019, read the signs and joined the world of unified commerce, when they had little other choice. So far this holiday season small retailers have seen a 110 percent increase in online sales, and many point to curbside pick-up as a savior.

It is fair to say that there are several points of convergence going on here. There is no doubt that there is increased interest in shopping small, keeping local and regional merchants from going out of business, and keeping dollars in the community. Our nine months of sheltering, working, and recreating in place, have given us a renewed appreciation for community, as well as awareness of the frailty of many things that we may have taken for granted. Los Angeles based Union Bank
UBSI
did a survey that suggested that seven out of ten customers feel it’s more important to shop small, than getting the best deal, and four out of ten are willing to spend $20 more on a purchase to support them.

However, there is also the undeniable fact that many of the “shop small” businesses are providing both specialized goods and personalized services that can no longer be experiences in other larger retail formats. They are also becoming the recipients of technology services that have leveled the playing field between the large corporations and the smaller chains.

Democratization of Retail Technology

Companies like Vend, makers of the first digital, cloud-based point-of-sale system, are a case in point. Vend provided many small and multistore store retailers with a gateway to unified commerce during the COVID course correction that many retailers had to respond to in real time.

In speaking with Vend’s founder Vaughan Fergusson recently, he noted “We have been talking about omnichannel for a decade, COVID has been an accelerant for all things omnichannel. Changes that might have happened in five years happened in nine months, and we had to respond by being there.” He went on to say “curbside pickup suddenly required that the retailer know exactly where their inventory was, in the moment.” Vend enabled pick and pack using smartphones as pocket computers to deal with the transactions.

The Pandemic’s Aftermath

Just as the effects of the post 2008 recession are still with us, the post-COVID shockwave will likely alter consumer behavior in unimaginable and lasting ways. As the economic bifurcation continues to reap havoc, the greatest risks are to retailers that are “muddled in the middle.” This includes what is left of the troubled department stores, undifferentiated legacy specialty retailers and countless malls and centers in which they both occupy.

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What will likely survive will be the masterful mega-retailers who anticipated the changing retail tides, and the swift-footed specialty retailers who are adept at constant course correction and maintain a laser-like focus on exceeding customer expectations at every retail touchpoint.