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What Types of Retail We’ll Want Post-Covid

Share the knowledge

 

Wait, who’s this guy with an attitude?  Read on, we’ll tell – promise.

There are so many trying to predict the future of retail post Covid.  We all want to know what the future will look like and we’re trying to think it through.

How much will have changed.  What types of retail, retail real estate, restaurants and hospitality will have disappeared?  And which sectors will bounce back?

Sobering Facts

Brick and mortar retail sales plunged 20% from Feb to April.

Largest declines were in clothing and accessories – down 89%.

Department stores – down 45%.

Personal savings rate jumped 33% in March from 8% in February.

Acceleration of Trends

Overall e-commerce this year (Jan to June) to date was up 30.1% from the same period last year.

That was more than double the growth trend.

Ecommerce growth for the same period in 2019 from the prior year was just 12.7%.

Of this, online grocery retail is projected to be up 40% from 2019.

This also almost doubled the growth trend.

Online grocery sales grew 22% in 2019 (whole year) over 2018.

So, a large acceleration of trends already in motion.

See retail sales by sector, the past few months, in chart below:

Chart showing 2020 retail sales trends by sector, due to Covid

 

Malls are Buying their Tenants

In 2020 so far, 21 retail chains have filed for bankruptcy, including household names like Brooks Brothers, Pier 1 Imports, J. Crew, Lord and Taylor, J.C. Penney, Men’s Warehouse (Tailored Brands), GNC

These are the names that defined and were the lifeblood of retail real estate; regional mall and power and strip shopping centers nationwide.

And mall operators are literally buying their tenants.

Simon Property and Brookfield Property just announced they are jointly buying J.C. Penney out of bankruptcy.

This year, Simon also teamed up with Licensing company Authentic Brands Group (ABG), and bought blue jeans company Lucky Brand, as well as the bankrupt Brooks Brothers and Forever 21 retail chains.

Are shopping mall operators the right businesses to own retailers?  Do they have the vision to create the fresh retail concepts needed to compete with ecommerce?  Hope so.

Post-Covid Thoughts

What types of retail will bounce back and flourish after Covid? Certainly not tired, finance-only driven, corporately-managed retail.  It must be retail concepts that people care about, and pay attention to.  That enriches their lives.  Engaging, not numbing retail.

Picture to show British home furnishings store, Habitat
Terence Conran’s Habitat store

Like Terence Conran

Terence Conran, the British furniture designer, retailer and restaurateur, who passed away last month, is an example of someone who understood the value of creating experiences people want.

He founded the Habitat chain of home-design shops in the UK, that revolutionized how British people decorated their homes and lived from the ‘60’s onwards.  He added great design, color and invigorating freshness to everything from lamps, to cook-ware, to bathrooms and sofas.  An intuitive into how people want to live, he also started many successful restaurants and even hotels.

Conran was an artist in the world of culture; a culture-creator.  He created products and experiences, that people wanted.

Those are the types of retail, dining and shopping centers that people will flock to, post-Covid.   And these are types of entrepreneurs that we’ll need to make that happen.

And, no doubt, people will be there, because…hey, we’re just a LITTLE TIRED of Netflix and Doordash!?

 

 

 

Filed Under: News/Blog, RetailPrevious: Selling Products and Services to Colleges and Universities

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Lionel Binnie, Founder, M Source Ideas

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