Holiday retail looks a lot different in the year of COVID-19.
Recently, a group of veteran retailers discussed the current retail landscape and how holiday sales are being affected by the pandemic. On the panel for a segment of Ask the Experts – Retail Edition were Samir Kulkarni, CEO of Showcase; Jerry Kohl, Founder and President of Brighton Collectibles; and Sacha Zackariya, Co-founder and CEO of ChangeGroup International. It was moderated by Peter Lynch, YPO member and Chair of the YPO Global Retail Network and a Principal of B. Riley Real Estate.
Typically, the fourth quarter is the strongest for most retailers.
Kulkarni, with Showcase, an international retailer with 117 stores across Canada and the U.S., says holiday sales are ramping in a very similar fashion to past years, with shoppers waiting for the best deals. Showcase is a national mall retailer that offers emerging trends, beauty, home, and health products.
“People have less time or comfort with simply browsing,” Kulkarni says. “They want to get in and get out.”
Other consumer trends the panelists have seen include a marked increase in e-commerce sales, shopping by appointment to limit the number of people in-store, shopping during special hours (examples: senior hours or special hours for first responders and frontline health care workers), and stronger weekdays versus weekends because people are trying to avoid crowds.
Pivoting for survival
Brighton Collectibles’ Kohl has been in retail for more than 50 years.
Brighton features an extensive line of women’s accessories, including jewelry, handbags and footwear. Brighton products are carried in more than 4,000 fine specialty boutiques and online.
Since the start of the pandemic, Brighton has had to reinvent itself every day, Kohl says.
“We started making face masks because they were impossible to get locally,” Kohl says. “They were wildly successful, and the only business we had for three months was online. Our online business had always been a small part of the business, and it grew substantially.”
People have less time or comfort with simply browsing. They want to get in and get out. ”
— Samir Kulkarni, CEO Showcase share
Brighton also started to do new things to personally engage customers. This includes hosting video conferences that offered consumers access to Brighton’s designers to talk about their new collections or a chance to see how things are made — like sewing handbags, beading or live design of new products.
Showcase pivoted into becoming a leading retailer of PPE in Canada. Because of this, the majority of the Showcase chain was able to stay open as an essential service.
“That was the biggest pivot in our lifetime,” Kulkarni says. “We also started a wholesale division and supplied governments and hospitals with PPE. So, PPE actually became 75% of our company sales. It’s still a very strong category today.”
Another key pivot: advertising and communicating directly with consumers. Databases of loyalty club members’ emails have been invaluable for retailers. Social media advertising through platforms like Facebook and Instagram also has been huge, especially now that everyone’s on their phones more.
Moving toward domestic services
For ChangeGroup International, a world leader in currency exchange, ATMs, and tax-free shopping refunds for international tourists and international payments, pivoting during strict lockdowns has been near impossible.
ChangeGroup serves tens of thousands of retailers and hospitality businesses worldwide.
“Essential services of providing ATMs into retail malls, into places like Harrods and to airports has continued to be a priority for us,” says ChangeGroup’s Zackariya. “We’ve tried to keep open services where we’ve been permitted to do so to support the retailers. It’s been really hard though to maintain contact with international customers.”
Until international customers start flying again, ChangeGroup has been focusing on domestic services.
Shoppers still are using cash for about 50% of all point-of-sale transactions. So, ATM infrastructure and providing payment services to people has remained important.
Another trend Zackariya notes, particularly in London, was how shoppers felt the disconnect between retail and hospitality venues, like restaurants. When shops opened but restaurants remained closed, consumers didn’t budge.
“It was very clear to see that shoppers actually did not want to engage in shopping in the center of town,” he says. “There was nothing else that you were permitted to do. You weren’t allowed to go and sit down at a cafe. You weren’t allowed to rest with your shopping bags. People were like, ‘What’s the point? It’s no fun. I might as well sit at home.’”
Zackariya believes city planners and retailers may have cause to work together to create environments that keep people engaged beyond simply shopping.
Future of Retail: What will it look like?
If operating during a pandemic has taught retail anything, it’s that every day is a learning curve.
For businesses considering an entry into retail, the panelists advise the following:
- Pure play e-commerce isn’t a sustainable long-term model. While e-commerce is here to stay, there will always be a role for brick-and-mortar stores. Retailers should focus on private labels and exclusive products. Competing against a hundred other websites selling the same item is not a path to riches.
- Landlords and retail tenants really are in this together. Landlords have been understanding and more creative and flexible than ever to help out retailers. But when it comes to advertising, tenants are going to have to dig in, if they want the traffic. They no longer can rely on anchor stores, great retail neighbors, or the caliber of the shopping center.
- Don’t be afraid to remerchandise items. Make sure you present something fresh on a regular basis. In other words, promotions should be different week to week. Says Kohl, “We learned that the word is not ‘retailer.’ The word is ‘merchants.’ So, we figured out how to become better merchants.”
- Think about how you engage shoppers with the time to browse and disposable income. This is a separate market from domestic shoppers. International tourism is huge. Retailers and capital cities must focus on receiving and attracting international tourists. Traditional marketing doesn’t work with this crowd, and global leaders will need to figure out how to engage these consumers.
Hear more from retailers featured in the December YPO Presents Ask the Experts.