Is the retail market ready for a second wave of the pandemic? What changes should retailers and shopping centers make now? These are questions we have explored with retail and real estate professionals at a REBEC webinar.
On the 1st of July, Nevena Kostić, Founder of Retail SEE Group, moderated a webinar panel discussion named “Transformation of Retail Post COVID 19“. The webinar was organized by REBEC and speakers included Drini Dushku, Marketing Director at Neptun, Nikola Djokatović, Independent Real Estate Consultant, and Biljana Ždrale, Consultant at Mercuri International.
At the webinar, all participants agreed that we are heading towards a new retail era, that will change consumer behavior and the way shopping centers and retailers operate.
These changes are inevitable considering that many worldwide professionals are predicting that a second wave of the pandemic will hit us in the fall. But it might even come sooner in some countries, as the numbers of infected people are already on the rise. In Serbia in the past few days, numbers of infected patients have increased, and some social isolation restrictions have been re-introduced by the government.
So how can retailers and shopping centers prepare for another possible crisis? Here are some ideas mentioned at the Rebec webinar.
RETAILERS MUST INVEST IN E-COMMERCE
When the first wave of the pandemic hit us, traditional retail stores suffered but e-commerce flourished on a global scale. While many retailers were experiencing huge losses, Amazon was busy doing business.
Therefore, it comes to no surprise why some retail giants such as Inditex (owners of ZARA) decided at this time to close down a vast number of stores and re-focus on strengthening their e-commerce business across the globe.
With more retailers investing in e-commerce, competition will rise online. This will result in the transformation of e-commerce platforms, that we believe will become more creative and interactive. We are even seeing now that retailers are changing their webshops to include more video presentations and new online shopping innovations are on their way…think towards Virtual Reality.
WILL E-COMMERCE WORK IN SOUTHEAST EUROPE?
Compared to the West, e-commerce in the Balkan region is still in its infancy. Many local retailers didn’t find it necessary to develop strong e-commerce websites in this region as the consumers preferred shopping in a traditional way.
But if social isolation restrictions tighten up in the future, consumer behavior will rapidly change in this region. Even now there are restrictions on how many people can enter a store, and instead of waiting in line, shopping online will become preferred due to its convenience.
But in order for e-commerce to rise in this region, logistics, delivery, return policy, and payment systems need to be improved, according to Biljana Ždrale, Consultant at Mercuri International.
She also highlighted that merchandise stock for online shops needs to be located in one place rather than scattered around physical stores, in order to save time and money on delivery. Return policies need to be clear to consumers and online payment systems need to be improved.
SHOULD SHOPPING CENTERS EMBRACE E-COMMERCE?
Shopping centers will be affected the most if another pandemic crisis emerges. If visitor numbers decrease, sales will decline and a huge problem will arise when the time comes to collect the rent.
So how can shopping centers assist their tenants to increase sales? The answer is to go online!
So far shopping centers have websites presenting the brands they house, but now its time to integrate e-commerce. Its something that hasn’t been done before in the region but its an idea to be considered. Creating fun interactive shopping center websites that offer e-commerce can hugely benefit tenants and assist with sales.
AN ALTERNATIVE TO E-COMMERCE
For retailers and shopping centers that are not ready to invest in e-commerce due to logistics, delivery, or payment complications, an alternative is to develop an order and pick up service. This kind of service is implemented by many retailers across the region, most notably IKEA.
The retailer still needs to have a website to allow consumers to order their goods online and pick them up at stores.
The order and pick up service should be considered by shopping centers as well. If tenants of shopping centers provide this service, the time spent in stores will be reduced. Faster shopping will be necessary because if restrictions are placed on how many people can enter a store, this way of shopping will reduce the waiting lines and health and safety issues.
Another advantage is that this service can also give a chance for consumers to see the products before purchasing and also give them an opportunity to “try before they buy” if requested.
PRODUCT ASSORTMENT NEEDS TO CHANGE
Although shopping will continue online, it is necessary to consider the lifestyle changes that consumers will go through at this time. As people will spend more time at home, due to social gatherings being restricted, it is important for retailers to adjust their product assortment.
Drini Dushku, Marketing Director at Neptun, stated that they are already seeing changes in consumer preferences within their Neptun online and traditional stores due to the pandemic.
According to Nikola Djokatović, affordable and basic products are now being preferred. This may explain why famous retailers in the region, such as Fashion Company, have recently introduced outlet products to their e-commerce websites.
Nikola also added that some retailers in Serbia are creating packages of products for their customers. These packages can be more convenient to shoppers, reduce shopping time, and provide a bundle discount.
ONLINE MARKETING IS NOW A MUST
As online shopping is on the rise, the way retailers promote their products needs to adapt in the region.
Social media platforms, such as Instagram and Facebook, have already implemented e-commerce services within their apps.
Bloggers, YouTubers, and other social media influencers will be needed more than ever. Amazon knows this best and has implemented a system to provide these influencers commissions for referring their products to their viewers. This system could be implemented by shopping centers and retailers in the region, to provide a code for each sale to reward referrals. This hasn’t been done yet in the region but is an idea to consider.
WILL THINGS EVER GO BACK AS BEFORE?
Some may think that these changes will be temporary and that once the pandemic crises ends everything will go back to as it was. But some may argue it won’t.
As consumers become more used to online shopping, consumer behavior will be re-programmed. Yes, traditional stores will also be needed, but they might reduce the size of their stores to act more as showrooms. Shopping centers will still attract visitors, but their purpose will be more than ever to provide a social, leisure, and entertainment experience to its visitors.
The new way of doing business online will bring many advantages to consumers and retailers. Those who do not follow the trends and make moves now towards e-commerce will experience a huge loss.
Considering all we have mentioned above, we can conclude that there is no looking back, only moving forward, being creative, taking risks, and adapting to a new era of a digital revolution.