How Will Coronavirus Impact the Future of Supermarket and Brick-and-Mortar Retail?

A lot of things have changed since Coronavirus hit the world, and grocery retail makes no exception. Retail was told that experiential marketing will bring brick and mortar sales to new heights, but now Covid-19 just put everything on hold. You can’t create social gatherings, you can’t do sampling campaigns in stores, you shouldn’t encourage crowds, people don’t wanna touch things. So what can you do?

It might look like a dead end for brick and mortar stores, but it isn’t. Retailtainment is the key to bringing back consumers close to the products and creating memorable experiences, while keeping them feeling safe and happy. Consumer behaviour has shifted and it will shift again nevertheless. The question is how?

How will supermarkets be affected by COVID-19?


Paco Underhill has studied shopper behaviour for decades and recently published a book called Why we buy: the science of shopping. He says that consumer behaviour has changed tremendously during the last months. However, he continues, “the question now is what happens on the other side of it, when we’re not longer being warned every 90 seconds that our lives are in danger and that we risk infection by getting within coughing distance of a stranger or a friend.

We have similar experiences from the past, when experts predicted that brick and mortar shopping will never be the same, such as when the 9/11 attacks happened. But malls and retailers have recovered and some of them really quickly. And the consumer and shopper behaviour shifted back as well.

While we don’t know what is going to happen, here are some predictions of how grocery retailers will be affected by Covid-19:

Retailer revenue growth will coincide with a profit fall in Covid times


In a new research paper published by Barclays, analyst Karen Short predicts a 32% to 62% sales increase for grocery retailers in the second quarter resulting in a 8% to 15% lift for the fiscal year.

Grocery retailers will be seeing a significant revenue growth due to restaurants closed during the Covid pandemic, but Karen warns that grocery retail will experience a basket shift from the center store aisles and an increase in low-profit e-commerce sales.

Consumers focus will shift on shopping local


Coronavirus has changed the consumer behaviour in so many ways. One of them is the moral drive to shop local. Millions of people have been laid off, many of them who have been working for local retailers. Supporting small businesses and the local communities is something that’s becoming more important than ever before. People have a way of helping each other rise again after a big fall, just like they did in New Orleans after Hurricane Katrina.

Retailers will need to improve in-store shoppers’ experience


We already saw how brick and mortar retailers hurried to invest in e-commerce during Coronavirus and that was a smart move, since a lot of the stores have been closed. But for the future, they will have to rethink their strategies even for the physical stores.

While the footprints of some might shrink, other retailers will be thinking of ways to bring consumers back to traditional shopping. And that will probably be done through experiential marketing like VR, AR, in-store activation display robots like Tokinomo or entirely new concepts that are about to be born.

Brands need to find new in-store marketing tools


At the beginning of the Pandemic, brick and mortar retail marketers have adjusted their marketing campaigns and strategies. But what next? The aftereffects of coronavirus will certainly be felt long after it’s gone. It will change the way consumers shop, the way they interact with your products and with other people. Brands need to focus more on automated solutions that make their consumers feel safe, but keep the shopping engagement high.

People will be prudent. But they will go back to shopping


One thing's for sure. People will go out again after the Coronavirus is over and they will return to brick and mortar shopping and the unique experience it offers them. Joshua Bamfield, director of the Centre for Retail Research, says consumers will return to physical retail because they already miss it, however they will be cautious about it. They will certainly not rush in, as they will be concerned about contact with other people.

One of the most important changes after this pandemic is that people will recognise that physical retail stores actually have a useful role to play and that a variety of shops are more valuable than a single type (think offline vs online). Brick and mortar plays an important social role in our lives and COVID-19 made us reconsider the ways and reasons why we go out shopping.

The future of retail and retail technology are changing. Hopefully in a good way.




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