Retail is at an inflection point. While online sales decelerate but remain above pre-pandemic levels, consumers are increasingly seeking out in-store experiences — which is challenging retailers to be more engaging and creative.
At the same time, retailers are working to improve their supply chain and are investing in technology to forecast and better measure demand, said Jill Standish, global retail lead at Accenture. Here, Standish discusses these trends and what industry leaders need to consider.
WWD: What’s going on at retail in this post-pandemic period?
Jill Standish: Foot traffic is up, and that’s a good thing. I think retailers have done a really nice job of attracting people back into stores. They’re also being more strategic about their store base. According to Coresight Research, there have been 2,264 store openings and 1,102 store closures year-to-date. So there are more opening than closing.
Many retailers are also rationalizing their footprint. They’re also getting a little bit scientific about where their brand is within a certain catchment. They’re analyzing the brand penetration in that catchment. Remember, a store legitimizes a brand. Retailers have also learned if they close down an underperforming store, e-commerce sufferers in that geography.
WWD: What about locations?
J.S.: I think the C and D malls started to not look so great, and retailers said, “I’ve got to get off-mall.” So when they’re building stores in a catchment area, retailers are looking at strip centers and freestanding stores.
Retailers are also following a breadcrumb trail of data. They know how much e-comm business is in a catchment. And they know if people are picking that up in the store or if they’re having it shipped to their home. You can also look at store traffic. You can look at conversion rates. There’s a lot of data mapping that can be done to inform location.
Retailers are also looking at the competition in a catchment. And taking into account the makeup of the catchment — such as whether it is a city or a suburb.
WWD: How else are retailers luring shoppers in?
J.S.: Retailers are getting more creative with the in-store experience. Looking back at the holiday season, retailers sponsored “holiday strolls,” for example. And they’re doing pop-ups and trunk shows. I also think consumers do not want to order from their couches. So, foot traffic came back over the holidays like no one’s business. I also think that there’s a technology play here. Retailers are letting people know if an item they’re shopping for exists in the store before they go. Localized inventory is now a big deal.
And I think consumers expect it too. We all got trained because of supply chain disruptions. Shoppers know if they want something to get it before it goes. Retailers are also getting smarter about having less inventory. They don’t want to get stuck with inventory.
Retailers are also getting smart about what they really need and doing a better job at forecasting and replenishing, which is great. And I think the supply chain is now back to a better place as a result. Retailers are making sure that supply is matching demand. And I think there are a lot of reasons why technology is helping with that too.
WWD: Does that change the makeup of their tech stack?
J.S.: Yes. And it depends on the segment. Right now, grocery is smart about trying to forecast fresh, which was hard to do. Spoilage and waste were always high in grocery. Now I think they’re a lot better. There’s improved technology that does “matching demand.” Grocery is also doing a better job of giving the category manager product assortment models.
Additionally, across all segments, retailers are more trusting of the data and technology. Still, there are some retailers still using spreadsheets and workarounds.
WWD: Can you speak to the role of the frontline retail worker?
J.S.: I think we’re in a very human-connection time. There’s a big focus on safety, security, mental health, wellness, leading from your heart, and understanding what’s going on. You can have the best product, the best marketing, the best store location, and the best price. But if you’ve got a store employee who is disgruntled, in a bad mood, or unhappy, it could throw it all off.
So there’s a big focus on defining the role of the store associate and manager. Leaders are asking: How do I make them engaged in the brand? How can I make them love their job? How can I take things off their plate that maybe a system could do, or technology can do? Because I know that they’re such an important ingredient to the success of the brand.
There’s also a workforce shortage. And dealing with the public right now is not easy. The tension level of human beings is just high. And we’re asking these people to not only run a store and be the brand ambassador but deal with all sorts of in-store scenarios. Retailers are training employees in de-escalation tactics.
Retailers are concerned about worker safety. And they’re also making sure they’re engaged and on a career path. Retailers are also thinking about the technology store employees are equipped with and how to make sure they have connection time with customers.
While we don’t call retail a service industry, employees are doing a service and they’re representing a brand. And so that person is absolutely a reflection of the brand.