Great news: retail is back. June marks the onset of the robust, revitalized rebound of retail in America. I have worked in the retail segment through the last 35 years, survived six recessions and now a pandemic. I am pleased to write this article, but I have a habit of ranting and controversial opinions. This will be no different.
I get asked every day “When are we getting back to the old ‘norm’?” Well, it’s not going to happen. The only time I want to hear the word “Norm” used is on a Cheers rerun when George walks into the bar. There are new norms but we don’t even know what they are yet. We may not for months. Tenants, landlords and consumers are rewriting the retail playbook and creating new baselines.
If we remember, pre-COVID, retail was changing rapidly. Enclosed malls, B and C grade centers, outdated retailers were becoming functionally obsolescent. New consumer shopping patterns were emerging. Then March 2020 came and the pandemic changed everything overnight. As I often state to others, “Never let a good pandemic go to waste.” It is now time to reflect on some of what we learned:
1. The federal, state, and local governments don’t agree with each other and have way too much power over the retail industry. In Michigan, the governor forbade people to be on a boat together. You could live with your family, drive in a car, but not be on a boat you own. Really? Indiana was not big on masks and marketing to Illinois residents come to Indiana because they had relaxed the COVID state restrictions. In Florida, Miami and Ft. Lauderdale acted as if they did not know there was a pandemic. When did we give the government right to shut down almost all retail? How do we protect ourselves from this going forward?
2. Why do we now keep comparing our retail stats to 2020? We should be using 2019 and 2018 stats. The year 2020 was a throw-away for all intents and purposes.
3. Some retailers just threw in the towel and walked away from their business. Some of our best categories are permanently changed. Wedding apparel, formal wear, salons and dry cleaners all suffered. Now we need to look harder at a tenant’s staying power and their liquidity.
4. Multi-channel marketing has now been revived with the new “Multi”: Multi-delivery systems. Retailers must have multiple ways to get their product to the consumer. We are all acting like spoiled children, as we want what we want, at the price we want when we want it and delivered yesterday It is amazing to me you can order a piece of chalk delivered to anywhere by Amazon next day delivery. Next are the 2-10 hour delivery systems because we just can’t wait until noon tomorrow for something we want today.
5. The new retail focus should be about how we acquire what we want, and smaller stores with less inventory.
6. We also learned that we are not that good about seeing the end of a pandemic, increased consumer spending and having enough product. Have you tried to buy lumber, a car, bike, golf clubs, ammunition, or a kayak? Good luck. Why did we not see the retail revival and be ready with product?
7. Restaurants had a tough go. Some closed permanently, while others saw their volumes increase in the past year. Sidewalks and parking lots became seating areas, creative marketing became critically important, hard menus became a thing of the past and the key words were “delivery” and “pickup.” This is not going to change.
8. Now anyone with a car can be a delivery driver for many delivery services. Uber has exploded again, but there are not enough drivers. To-go orders are up 130% from 2019.
There is no going back. Consumers and the buying process have changed permanently. The retail industry must adapt to the new world. The good thing is retail is resilient and will continue the rebound. The next trend will be the “de-Zooming “of the nation.
“There is no going back. Consumers and the buying process have changed permanently. The retail industry must adapt to the new world. The good thing is retail is resilient and will continue the rebound. The next trend will be the “de-Zooming “of the nation.”
Keith Edward Lord is Managing Partner and owner of The Lord Companies LLC based in Chicago.
