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A retail revolution called “No Touch Retail” is happening from coast to coast. With increase competition from Amazon’s delivery options and the exceptional quality of Whole Food Stores that was rolled into their ‘Rundle’ (recurring revenue bundle), Walmart and Target both made deeper forays into Pickup services with huge results. Now that more people are being forced to use these options rather than going into the store to browse and find what they want, they may not go back after this period of ‘physical distance’ ends.
‘No Touch Retail’ is defined as both delivery and a store pickup experience, often called ‘Click and Collect,’ that does not involve entry. These options are super convenient and efficient, making this feature the engine of Walmart’s growth in recent quarters. (STATS). This is also attracting more affluent shoppers to the company, something they struggled with before in comparison to Target.
This is a fundamental change in behavior for shoppers. They need to plan ahead and order what they need. They need to do this on a scheduled timeline. There’s no more wandering in the store and just finding what you need. While some consumers already embraced that idea, only this crisis drove a wider interest in making this cultural change.
Studies show that the typical shopping trip that used to take an hour instead takes seven minutes. That kind of savings will be meaningful for consumers with a time poverty (e.g., people with children or intense work schedules). Furthermore, the experience of shopping in traditional stores is changing. With paid grocery workers doing the shopping and adding a pickup delivery’s items into a large basket, it’s even more crowded in the aisle for regular shoppers. When we get back into the stores after we pass the crisis, how much more time will be added to that hour shopping trip if the average consumer is tripping over another bunch of workers?
The Long-Term Industry Impact
This reliance on NTR gives these larger companies (including traditional grocers like Kroger), who were already using this tactic or who were able to pivot quickly, a huge advantage against smaller companies that simply cannot put a team in place to support this offering. Many smaller companies have tried to move to a curbside pickup model, only to be shuttered by governors under safe-at-home orders for non-essential businesses. Many single-category retailers have no choice but to close when they are deemed non-essential. This will likely have an impact on distressed retailers who were already on the ropes and now need to cope with a way to keep their business going with no foot traffic and the pressure to potentially lay off their employees. Some of these companies simply will not survive a month or two of idleness.
Keep in mind that it’s not just the governors deciding who is an ‘essential’ retailer. Purchase patterns are already changing, with consumers identifying what they view as ‘essential’ retailers and those that are clearly discretionary. This ends up being a function of whether they can get the items they are inclined to buy and, possibly, hoard. They are also finding they cannot necessarily get everything from eCommerce. Right now, searching for “toilet paper” on Amazon returns an awful lot of ‘unavailable’ options in the results.
This hardship will build the relationship with the local companies where distressed consumers found the staples they needed in a time of crisis.
As the COVID scene calms down, the industry will be questioning whether shoppers will go back to their traditional behavior. If this era of physical distancing lasts for more than a month, how much of that formal experience will stay in place? Will the fear of future outbreaks make us more likely to use Click and Collect options in the future because of the safety we assume they provide? Time will tell, but the foot traffic patterns in malls and major retailers will certainly be the subject of close scrutiny when we get past the age of COVID-19.
You don’t want your data to be siloed. Your company’s CRM, PIM and PLM solutions shouldn’t operate in a vacuum, either. Surefront is a unified product collaboration platform to power growth and ROI. Our patented PIM, CRM, and PLM solutions streamline the omni channel sales, merchandising and product development processes. By combining these essential functionalities, Surefront creates a single source of truth throughout your product lifecycle, sales and listing processes.