“The role of a physical store goes far beyond the sale per square meter. The on-site retail is the heart of the connection between brands and people,” says Camila Salek, columnist for Harper’s Bazaar Brasil.

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With the reopening of public spaces and greater circulation of people, we are witnessing a search for reconnection, in which experiences play a fundamental role. Thus, the fashion market directs its efforts to attract customers back to their physical spaces and bring them closer to the brands.

Omnichannel is here to stay. That is, the digital space that many brands conquered during the pandemic will not be lost, but even so, brands must, need, and want to provide unique moments to consumers who are looking for these experiences in their physical stores.

Discussions about the future of the post-pandemic physical store

Traditional retail determines the value of your store by the amount of products sold – “sales per square meter.” So, the new retail explores the potential of opportunities in the integrated physical and digital channels.

Some studies made by brands that integrated their channels point to the “Halo Effect:” increase in online sales in the same region as the physical store, that is, the physical space as a stage and media for the brand influences the performance of digital sales through geotargeting.

“Have you ever stopped to evaluate your store’s result as a medium? Retail futurist Doug Stephens, in his latest book called Resurrecting Retail: The Future of Business in a Post-Pandemic World, made a very interesting provocation by saying that brands pay for their ad impressions on digital channels, but do not use the same logic to measure the impression of a campaign or product displayed on physical stores,” Camila Salek.

Reimagining stores for the next retail standard: redefining the store’s role and revamping operations for the post Covid-19 future.

The pandemic changed consumer behavior and the market needs to understand what the new consumer behaviors are.

Strategic imperatives to prepare for the next normal

In order to survive and thrive in the post-coronavirus world, stores must fundamentally change the way they operate on both sides of the P&L (statement of profits and losses).

Strategic Imperatives:

1 – Radically accelerate omnichannel integration: gain a deep and up-to-date understanding of customer preferences; imagine a new function for the stores.

The pandemic has driven new omnichannel initiatives for large and small retailers. The omnichannel integration is the current bet for the new standards that are being set.

“In our survey of US apparel executives, 76 percent said they plan to improve omnichannel integration in stores”, McKinsey & Company.

To initiate this integration, retailers can consider the following actions:

– Redefine the role of the store. More than ever, stores need to deliver customer experiences; looking to deliver a superior product discovery experience and provide access to exclusive merchandise.

– Offer basic notions of omnichannel service.

– Build an omnichannel team.

– Enable personalization of touch points in the store. “If store associates have access to customer data generated both offline and online (for example, data on loyalty and purchase behavior across channels), they can tailor their customer interactions accordingly. Even customers that start and end their journeys online can then receive personalized attention in stores.”

2- Reimagine the point-of-sale operations to reflect the new reality: redefine the cost structures of the store and prepare your workforce for the next normal.

Redefine the cost structure of the store: simplify operations and rebalance cost allocation in order to support the growing volume of omnichannel activities.

– Change the complexity. The leaders of store operations must collaborate with the merchandising function to redefine the frequency of restocking and the minimum stock levels to reflect post-crisis sales and traffic.

– Quickly digitalize and automate work without added value.

– Improve the omnichannel touch points.

– Introduce contactless self-service capabilities for omnichannel transactions. “We’ve found, for example, that 60 to 70 percent of the typical retailer’s returns process can be digitized”, McKinsey & Company.

Prepare the workforce for the next “normal”

A McKinsey & Company survey with specialized apparel and retail executives showed results: 75% indicated that their companies laid off or fired store employees since the beginning of the crisis. During the recovery period, retailers must shape their future workforce to support the store’s new role and improve flexibility of their employees, preparing for potential recurrent and virus-related stoppages.

– Retain pre Covid-19 talents.

– Improve training and integration.

– When rebuilding the store teams, rethink the composition of the workforce.

– Improve employee flexibility.

3- Optimize the store network through omnichannel performance.

“In our survey, 53 percent of respondents said they expect to close underperforming stores in the aftermath of COVID-19”, McKinsey & Company.

Retailers must incorporate their future perspectives (or projections) into their reopening plans – make decisions through an omnichannel perspective of long-term store performance; to better understand the true economic value of a sales point, a retailer should modify the store’s P&L to include its e-commerce arm.

“A forward-looking omnichannel view of each store’s performance should incorporate postcrisis traffic projections and the retailer’s envisioned role for the store”, McKinsey & Company.

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