Over the past month, our CEO – Stephen Hart has been speaking with many of our clients, representing a cross section of industries who operate bricks and mortar locations across Canada and the United States.
With these conversations we wanted to understand our client’s and their brand’s view of 2020. Some of the questions Stephen asked included;
Is it business as usual with COVID-19 tweaks or is it full stop to wait & see?
Are your temporary in-store safety measures viewed as temporary or here for a couple of years or beyond?
Have long term aspirations been accelerated due to changes in Customer behaviour during the pandemic?
Has the recent spike in on-line activity changed your view of the role of your bricks and mortar locations?
What milestones are you watching before you initiate the bricks and mortar updates you are planning?
These questions spurred other questions which led to ideas and conversations about the ‘new normal’. We have shared Stephen’s findings in sections dedicated to the main trends that ran throughout the various conversations.
Long term aspirations become short term opportunities
One of the most obvious trends throughout our customer base involved the idea of long term aspirations becoming short term opportunities. Most conversations included the sentiment that our Customer’s were planning to move in a specific direction over the next five years, but Covid-19 changed customer behaviour and enabled a more aggressive timeline. This shift in consumer behaviour along with the brands will to go this direction anyway, has created the opportunity to move forward on planning and construction undertakings even during the pandemic. In almost all the conversations with customers experiencing this opportunity, they were aware some further learning would occur, but they felt largely confident that this consumer behaviour would stick after the pandemic is over or at least controlled.
Not surprising, our customers found that their customers adopted technology faster within the pandemic environment than previously planned outside of it.
How will on-line sales change your Bricks & Mortar
Which Covid 19 behaviours will stick around after it’s over?
First of all, all conversations I had believed that we should be talking about ‘when Covid-19 is under control’ not when it’s ‘over’. It seems most believe we will need to get back to ‘real life’ before there are zero cases of Covid 19 on the planet. That being said, everyone believed that some of the habits created by a life of pandemic induced seclusion and separation will have some lingering effects.
The question then becomes, which behaviours will disappear and which are now ingrained in our society? As predicting this may be the key to unlocking next steps for our bricks and mortar environments, the answer to that question seems to be more of a social comfort issue rather than a pure medical risk issue. In my conversation with Customers, there was a lot of uncertainty in this area and this concern was cited as the main reason design, planning and construction was slowed or stopped all together. Why invest in new spaces when our new design may turn out to be uncomfortable to our customers in the ‘new normal’.
So, how do we predict which Covid-19 behaviours will stick and which will drop off? We had some great conversations about this topic. Thank you again to those who shared their thoughts on this topic. Here’s the thinking that was shared with me.
Social Distancing: The idea that we will stay 2 meters apart forever was not shared by many. But how long will social distancing intrude on our lives, most think for a couple of years. Many customers I spoke to think that social distancing is something that they need to consider in their next layouts. They feel that many people being crammed together in a small space will be uncomfortable for many people. This will influence their decisions on where to shop and what places to frequent. As designers and planners the overwhelming concern is what to do with the layouts that currently don’t support social distancing? Most think that our layouts will have to support social distancing, as almost all believe this will be something our customers will need to feel safe in public for the next couple of years. In five years, perhaps not, especially if the health risk is gone or very low. But it was a consensus that Social Distancing will take quite a while to come back to a place that would resemble pre-Covid behaviour and that it must factor into our current and near future bricks and mortar spaces.
PPE and Protection Screens: Everyone who serves the public has installed some kind of shield between employees who serve customers (mostly at cash desks) and the customers they serve. In March and April these were temporary contraptions, sometimes homemade and installed on wire hanging from the t-bar ceiling. I even experienced plastic food wrap stretched between two hockey sticks that were screwed into the front of the cash desk. I hope that was temporary. The months of May & June have seen most locations, who had very temporary solutions in place, upgrade their PPE and Protection screens as they saw this a longer term necessity and in many areas a government requirement to re-open. My conversations about PPE & Protection screens had mixed feelings. Most thought their customers would only feel safe in-store seeing staff wearing PPE and protected behind screens. Overall almost all our customers believe that PPE and protection screens may evolve but some version will exist for the next couple of years. On the other side of the conversation, some thought that they could remove the need for protective screens by redesigning the cash out area and relying more on technology, but this thinking was in the minority.
What milestones would trigger new investment in your locations?
The answers to this question did not surprise me but I think it’s valuable to let all of you know that you’re not alone. In the end, on this question, almost everyone is moving forward one day at a time. Some customers are talking about options but not yet ready to action change initiatives. Nobody had calendar milestones set to trigger their next steps, but instead are waiting on society as a whole to make intentions known.
The overwhelming thought is that ‘wait and see’ is the only prudent path right now. We all seem to be waiting on society to decide how they will interact with public and retail spaces. As the weeks move forward, slowly some consumer behaviour is returning to pre pandemic patterns while other newly formed behaviours (like social distancing) remain. The consensus in my conversations is that it’s too soon to know the right next step, in regards to changes to their in-store environments. Customers who are moving forward with changes to their locations were already planning to do so prior to Covid or Covid provided the opportunity as we discussed earlier. Nobody I spoke to is yet planning to move forward with in-store changes because of Covid-19, with the expectation of the protection screens or other changes required by law to open for business.
The customers who remain most concerned are the ones who struggle to see how to maintain social distancing within their locations. Whether it’s seating layouts, queue lines or simply the volume of customers in the store, social distancing in-store seems to be the area most talked about.
Design thinking change?
The vast majority of customers I spoke to believed that their bricks and mortar locations would need to adapt in some way to accommodate the ‘new normal’. About half of those have already begun to at least sketch out ideas to keep their teams busy and proactively be ready when their brand decides to move forward. As we discussed changes to their design a couple of trends emerged.
Technology: The use of technology heavily factors into their design changes, but in interesting ways that I had not thought of myself prior to these conversations. The First, and most obvious, is empowering Customers to purchase on-line and pick up in store. This seems to be the most popular plan that is being considered for next step design. Whether it’s shop on-line and pick-up in store, or its making it more attractive for Customers to use their own devices to pay for in-store purchases, technology shifts seem to lead the discussion. Most of these ideas fall into the category of ‘Long term aspirations become short term opportunities’, so most of our customers are not starting from ground zero with these ideas but accelerating implementation. The second way technology is factoring into evolving bricks and mortar design is by subtracting high touch public technology. Many of our Customers had already, were about to or were planning on rolling out in-store screens that their customers could interact with. The move to have customers use in-store touch screens to locate or pay for their purchases is all of a sudden not a popular post Covid idea. Most of the conversation I had included shying away from that direction for the foreseeable future.
Clean Surfaces: Designers I spoke with are already selecting low transmission surface materials and limiting the number of surfaces that their customers & employees can touch. This includes rethinking countertops, reducing door knobs and creating surfaces with no place for germs to hide. (I’m picturing surfaces with rounded edges rather than 90 degree corners where dirt and germs can hide made of materials that can take a constant disinfectant cleaning).
Social Distancing: As you can see, this topic seems to resurface question after question. When speaking about design changes, Social Distancing quickly became the most discussed in-store design challenge. Our customers that manage smaller spaces felt strongly that they would need to manage traffic flow to make their customers feel safe. Everyone believed that the retailer has to take charge of setting the traffic flow and not leave it up to customers to figure it out on their own. Everyone believed that their long term design plans would probably evolve at least a little bit to allow for social distancing within their space.
How will your work change?
The vast majority of people I spoke with thought how they work will change permanently, specifically the need to go into the office everyday. The sentiment shared by 90% of our customers, is that they enjoy working from home, sometimes. Sometimes, meaning ideally they could have a mix of working from home and going into the office a couple of days per week. The same group feels they are more productive working from home when they have independent work to get done, as they experience fewer interruptions. They also said that they wouldn’t want to work from home all the time, as they would miss the face to face and unplanned interactions. But creating specific days for independent work and collaborative work would be an ideal mix and set clear expectations of which mode they were in. Further, this group believed that their businesses will be moving in this direction post Covid-19, both as a way to gradually assimilate back into the office and as a long term plan.
If productivity is high when employees work from home, then it can be a win / win. The company can share office space between multiple employees, reducing the area they require for their workforce while employees enjoy a higher work life balance by reducing commute time and many office distractions.
The one consistent downside of working at home stated by more than one person I spoke to, was adapting their home to allow for a more comfortable work environment. This would involve an investment in a more comfortable office chair and a dedicated office area in the home and ensuring the family supported their work at home routine. People with children at home would obviously need school and day care to back in session before working from home productivity could be realized, as this has been a monumental challenge the past couple of months. With these adjustments, almost everyone felt that working from home about 60% (3 of 5 days) would be an ideal formula for success.
Outlook for 2020?
As a reminder, I have been speaking with a cross section of people that work across many brands in many sectors. This would include; retail (niche, big box and in between), restaurants, entertainment, hospitality, auto, banking and general property management. Across all areas, not many people are optimistic about 2020 being a growth year. Almost all would consider 2020 a wild success if they were able to match 2019 or at worst minimize losses so that they can recover in 2021.
Summer 2020 (July, August, September): Most are not too optimistic, but see a slow but steady increase in their business over the summer months. For some this slow increase allows them to reopen and put safety measures in place so they are ready for Q4 and 2021. Most see the summer of 2020 as their chance to show their customer’s it’s safe to shop, dine or generally be in their store / restaurant / theatre / office / bank, etc. Most believe if they are successful at showing their customers they are safe in the summer, then the recovery will begin in the fall.
Fall 2020 (October, November, December): Most are more optimistic that we will begin to see signs of economic recovery by the fall if they do a good job of making their spaces safe this summer. As a couple of people explained, ‘Safe’ will not only mean the overall number of Covid-19 cases drop in our community but that their brand avoids being linked to Covid spread. This would be a serious setback so everyone is highly motivated to maintain strict cleaning and safety protocols over the long term.
Winter 2021 (January, February March): Everyone I spoke to can’t wait to welcome in the new year and with it a renewed optimism that the worst of Covid 19 is behind us. At this time, that’s the soonest anyone mentioned as being optimistic about growth and getting back to business as usual. They admit there is risk of a flare up of cases or unanticipated customer behaviour change that could derail their optimism, but for now Winter 2021 seems to be the next window of prosperity.
Conclusion
Again, we want to thank the participation of our clients who welcomed the conversation and shared their insights with Stephen. We are sharing this with everyone in hopes that you can see your thoughts and concerns reflected across the industry and that gives you some small comfort that you’re not alone.
We are all thinking the same thoughts, we have the same concerns and we seem to be pretty aligned on our levels of optimism about the near future. In the end, we are in this together.
Here at DedON we are preparing for the next challenges that we will face together and are excited to see the resilience we will all undoubtedly show over the next few months as we listen and act on ‘crazy ideas’ once thought too radical. Bring us your scariest challenges and together we’ll find a way to succeed in a time of pandemic and beyond.
