Capital Region

Kennedy: How COVID-19 will permanently change retail

Plexiglass and masks at an Amsterdam Stewart's in April
PHOTOGRAPHER:
Plexiglass and masks at an Amsterdam Stewart's in April

Categories: Business, News

My ears perked up when I heard the question posed to two research analysts from Barclays on whether social distancing and personal protective equipment are part of the “new normal” in retail or just temporary measures to keep COVID-19 in check.

I don’t know about you, but I’m finding that donning a face mask to shop for food makes my nose itch (and can bring on a sneeze – oh no!) and that staying six feet apart is harder the more people who line up to check out.

Yet I expect to see floor arrows in the supermarket and elsewhere to denote store traffic flow, plexiglass dividers at register and workers in masks like me. Indeed, a survey this month from market researcher Ipsos indicated that nearly two-thirds of shoppers would avoid a retailer not taking steps to show it’s serious about health and safety.

GAZETTE COVID-19 COVERAGE

The Daily Gazette is committed to keeping our community safe and informed and is offering our COVID-19 coverage to you free.
Our subscribers help us bring this information to you. Please consider a subscription at DailyGazette.com/Subscribe to help support these efforts.
Thank You

So the question to the Barclays analysts, offered in a webinar last week hosted by The Food Institute, was what new virus-inspired practices in U.S. retail will be temporary, versus those that could last six months, a year, or longer.

“I’m hopeful PPE and social distancing …, wider aisles, actually are not going to be a permanent measure,” responded Hale Holden, head of U.S. high yield research and a managing director at the investment firm.

Especially if a vaccine is developed by the end of the year, “I don’t see these as a permanent go-forward,” he added.

More long-lasting, though, are changes inspired by technology.

One he cited is contactless payment – often called tap-and-go – that permits debit and credit card transactions without touching the much-used keypad on point-of-sale terminals.

And beyond just tapping a card are various digital “wallets” that allow electronic payments via smartphone apps.

Holden described these as “a sea change in terms of the way folks are purchasing.”

He also sees curb-side pickup, delivery and online ordering as “permanent changes for the [retail] landscape.” They are more expensive ways of selling, however, and could have a financial impact on “companies that are smaller and don’t have the ability to absorb” the costs, he said.

Karen Short, a managing director and senior equity research analyst at Barclays, said the pandemic may have put near-term expansion plans on hold for food retailers, but they could use the time to fine-tune “click and collect” services – assembling online orders in-store – that may not have “fully evolved.”

“You absolutely have to be looking to reconfigure your stores to do click-and-collect in a much more efficient way with dedicated space,” she said. “I would argue that a solid 20 to 30 percent of the existing store square footage could be allocated to that.”

Stores have sufficient “wiggle room” to accommodate such reconfigurations without affecting overall revenue, she said.

“And that would definitely be something you need to be doing on new units going forward.”

Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected].

GAZETTE COVID-19 COVERAGE

The Daily Gazette is committed to keeping our community safe and informed and is offering our COVID-19 coverage to you free.
Our subscribers help us bring this information to you. Please consider a subscription at DailyGazette.com/Subscribe to help support these efforts.
Thank You

Leave a Reply