A culture shift: How COVID -19 changed the ways we shop
Buyers went online as bricks-andmortar took a hit
Christmas was just days away, but the Macy's department store at Colonie Center was pleasantly uncrowded. The busiest area seemed to be at the counter where customers could retrieve their online orders.
So it was no surprise last week when Macy's reported its fourth quarter results. While overall retail sales had tumbled by 19 percent in the three months ending Jan. 30 from year-earlier levels, digital sales were up 21 percent.
"We anticipate annual digital sales to reach $10 billion within the next three years, and that digital will become an even more profitable contributor to our business," said Jeff Gennette, chairman and CEO.
When retailers and shopping malls temporarily closed their doors in the early days of the pandemic, consumers flooded online, and merchants became even more dependent on their online sales. Those not yet online quickly established websites or took orders by phone. Customers could choose whether to have their orders shipped or pick them up curbside.
The Retail Council of New York State helped its members adjust, introducing its online portal, Retailnewyork.com, in early April of last year, as the Covid-19 pandemic was intensifying. Retailnewyork.com now has 563 stores on the site, said Melissa O'connor, president and CEO of the Retail Council.
Meanwhile, major retailers such as Walmart and Target have been growing their own online business, offering a variety of ways to shop.
In an effort to differentiate themselves and encourage repeat shoppers, retailers have been expanding their loyalty programs, taking their cue from airlines, hotels and grocers.
One difference: Programs such as Amazon Prime, which offers a range of benefits from free shipping to video programming, music and discounts at Whole Foods Markets, charge a yearly membership fee. The freebies, from shipping to video entertainment, encourage members to return to Amazon.com time and again.
Now Walmart has launched Walmart+, also a paid loyalty program. Prime costs $119 a year, while Walmart+ costs $98. Walmart+ offers free deliveries, fuel discounts and other benefits.
Amazon, which opened its first upstate 4-star store at Crossgates Mall several weeks ago, until recently has eschewed the bricks and mortar approach. But it has a number of different retail concepts it's pursuing, from 4-star to Amazon Books, Amazon Fresh,
We anticipate annual digital sales to reach $10 billion within the next three years, and that digital will become an even more profitable contributor to our business." — Jeff Gennette, Macy’s chairman and CEO.
Amazon Pop Up, Amazon Go and Amazon Go Grocery. Amazon also owns Whole Foods, which it acquired in 2017 for more than $13 billion.
During an interview on the eve of the Crossgates 4-star opening, an Amazon official explained its move to bricks and mortar.
"People love the opportunity to feel and touch" products,
Drew Sheriff, Amazon's director of physical stores, told the Times Union. "One of the benefits of having a physical store is that we can bring these things to life for customers."
But consumers could be excused for thinking it's also one more way for Amazon to recruit members to Prime. Items on display at 4-star are the most popular at Amazon, receiving a four-star or greater approval rating. Each item displays two prices, the full retail price and the Prime members' price,
which can be significantly less.
To seal the deal, Amazon offers a free trial membership.
And in this era of porch theft, the store also serves as a secure pickup location for packages that online customers might not want to have shipped to their home, as well as a convenient place for them to return packages they don't want.
Bricks and mortar retail can still do many things better than online, whether it's getting the proper fit of clothing or being able to actually touch the fabric,
to tasting a sample of a food item or even getting a customized portion (three slices of prosciutto, please).
And O'connor sees a continuing role for bricks and mortar.
"If you look at the top ecommerce websites, those companies also invest heavily in their brick and mortar stores," she said.
Consumers will obtain the goods in the way that works best, whether it's a bricks-andmortar Best Buy shipping a product from a store to a customer hundreds of miles away who purchased it online, or someone who used The Fresh Market app to purchase groceries to be picked up in the store's parking lot on his way home from the office.
Retailers already had been adopting multiple ways to cater to consumers, said O'connor. The pandemic just accelerated the pace of change.
"Retailers large and small have to operate in a hypercompetitive economy," she said. "That has not changed."