SHOPPING’S EVIDENT TURN

BY WENDY LONG

Online spending has gone up during the circuit breaker — not just on groceries or essentials like food, but on other items as well, like beauty products. Most people are stuck at home and have no access to their usual beauty routines. Many people have also bought fitness equipment as they feel like they need to maintain some form of physical activity while they’re stuck at home. Ironically, they have never felt the need to ‘maintain activity levels’ before lock-down and have never so much as cycled a mile in the previous year.

Retailers had reported an increase in online sales when they slashed prices to move inventories. It merely goes to show that people will continue to spend, even when held in virtual captivity, or rather, shopping is perhaps all that they can do while being held captive between four walls and a screen. It also shows that when the price is right, there will be a market. The question is, will this lead to fewer impulse purchases and create more bargain hunters? Does this mean retailers will have smaller margins, with offering discounts becoming a necessary evil to at least maintain some revenue inflow?

Will we see more of the ‘direct to consumers’ model, which will eliminate the middleman? After all, the benefit of online retail is accessibility. So, if we are shifting towards more online vs brick-andmortar shopping, will early adopters of building a stronger online presence have an advantage in a post-pandemic economy?

Will big-name luxury houses like Chanel and Dior, which are currently not selling direct to consumers online, or even to wholesalers like online retailers, be forced to change their model, in light of the shift in consumer purchasing patterns? They have long cited the loss of a ‘consumer experience’ as the reason that holds them back from venturing online.

I should know better as I have always supported the reason behind brick-and-mortar for top-end luxury — it’s all about building the relationship, that client experience is the premium that you are paying for, as that’s what luxury is all about. It’s not about price per se. But now, even I’m starting to shift my view. I still enjoy walking into the shop and taking my time to browse, but in light of being confined at home, I do desire to buy items that are unfortunately not available online. Of course, this could all be temporary, and once we have regained our freedom, it’ll all be back to ‘normal’.

I’m not too sure about that.

As we get used and more comfortable with the idea of staying home and shopping, working, studying, etc. from home, we may reexamine the need to be out and about regularly. In any case, retailers may want to reduce physical stores as a cost-cutting measure – so why not take this time to rethink the brand experience?

And marketing efforts? In preparation for the new order? After all, it’s always wise to stay ahead of the curve and be prepared. So how does a brand — especially luxury brands – maintain or build client relationships in the new order of doing things which are leaning more towards digital?

Will this be the final straw for the already floundering brick-andmortar retail? For years, online retail has been tailing behind brick-and-mortar. Although more people have increased their online spending, as a whole, online consumption is still only a fraction of brick-and-mortar. But will this episode be the game-changer for online retail?

If the answer is yes, what should departmental stores do to stay relevant? This is also a matter for real estate. Retailers take up a chunk of real estate, so if stores (and offices) are increasingly made redundant, which is the case now, then what does this mean for all that empty space? What can we do to maximize the efficiency of commercial and retail space? What does this mean for landlords, developers, and REITs?