Photo: @TonyTheTigersSon via Twenty20
Will the new normal look a lot like the old normal?
A new study finds the “new normal” coming out of COVID-19 will likely reflect an acceleration of trends that “would probably have happened anyway.” Other major changes will likely happen as “something positive” is learned from the experience.
Many fear-driven assumptions, according to the report by Avison Young, a real estate advisory firm, were deemed “pure speculation.” The study notes that the 9/11 attacks brought heightened security at airports and office buildings that were “prudent measures to prevent repeat attacks” given the risks. Predictions of people being reluctant to occupy upper floors of office buildings or travel by plane, however, proved far fetched.
The study stated, “The world has never been the same since 9/11 — but the ‘new’ normal is not radically different from the old.”
Similarly, some predictions for solutions to the COVID-19 crisis have not been fully vetted yet for the affordability, viability and practicality. Many assume current virus avoidance measures will remain necessary.
Some predictions are seen as “simply too early to judge”:
- De-densification of office occupation: Once an effective vaccine is developed, lower density occupation won’t be necessary.
- The widespread creation of “disease-resistant buildings”: Calls for enhanced air filtering, bacteria-resistant surfaces and pre-entry temperature checks may be “quite plausible and practical responses” that support healthier working environments, but also “ultimately be affordable or necessary.”
- The suburbanization of economic activity: If people reject crowded urban centers to work, they would presumably also stop visiting shopping centers, drinking in bars or attending theaters or sporting events. Wrote Avison Young, “Once a vaccine is developed and widely available, it seems unlikely that such behavior would persist.”
- A significant long-term reduction in public transport usage: Effective personal protection equipment for using public transport would likely be a “more feasible” response versus the logistical challenges of having urban workers shift to cars and bicycles.
An underlying message was that longer-term solutions to potential COVID-19 challenges should be considered, but pre-COVID-19 priorities shouldn’t be overlooked.
Avison Young concluded, “Claims of a ‘new normal’ that is radically different from the old appear at the very least premature and in many cases misplaced; for now, they should be treated with caution.”
Discussion Questions
DISCUSSION QUESTIONS: What predictions for transformative post-COVID-19 measures involving retail are more speculative in your mind versus those more likely to occur? What insights can you draw from Avison Young’s findings to help with post-COVID-19 business planning?
Poll
BrainTrust
Neil Saunders
Managing Director, GlobalData
Jasmine Glasheen
Content Marketing Manager, Surefront
I would sure appreciate more realistic conversations like this in the light of the “pure speculation” doom-and-gloom pundits. Yes in the short-term there will be a lot of precautions but many shoppers still want to get back to their routines and I believe will.
While it’s interesting to speculate on the possible outcomes post-pandemic, it’s simply too early to make anything but guesses. The landscape will continue to change once restrictions have lifted. “Normal” is months or more away. The challenge will be to stay close to consumers through active social listening and an agile mindset to meet them where they want to go.
I agree 100 percent, Jeff, that flexibility and agility will be the most important organizational mantras coming out of COVID-19. And it is this ability to change and adapt that will prepare retailers and others across the supply chain to react in real time to the next pandemic or global market disruption.
While some things will stay in place for a while, like social distancing, there are some things that should have already been happening already – washing hands, sanitizing and cleaning surfaces, etc. As far as reducing public transport usage, and permanently reducing open office clusters, etc., I think that it is too early to say that it will be the norm. I don’t know if it will be normal – it wasn’t normal after 9/11, there were just different conditions that everyone had to adhere to.
We are all creatures of habit and research suggests that, on average, it takes more than two months before a new behavior becomes automatic — 66 days to be exact. So surely the changes consumers (and associates) will encounter at retail (e.g., protective guards, wider – and perhaps one-way – aisles, screenings before entering, cashier-less checkout, new sanitation rule sets and protective clothing, to name a few) will take time to adjust to. However, new habits will be formed and soon the “new” normal will simply feel normal.
Absolutely, it is all about habits. Breaking old ones and creating new ones. We don’t consciously think about why we do things, our brains would explode if we had to think about every step of every action we took. It just skips from need to solution. “Need milk? Go to store.” Once we change that connection, it opens us up to new solutions and new habits and a new normal.
As far as brick-and-mortar is concerned, companies will continue to add seamless delivery and order applications to their operations. Though much will return to normal, competitors are seeing the value that a company like Domino’s has created with its online applications. On another note, as companies have invested both financially and culturally in telecommuting, we will see more remote workers even after restrictions are lifted. The truth is, remote working can be very effective.
It is too early to tell if handshakes will forever disappear from human habits worldwide, along with other predictions. Safety and sanitation practices with HAACP and other guidelines have existed in our industries for decades. Will we step up the efforts around that? Yes. Are people afraid to take public transportation, regardless of how much the media tries to scare us? Nope. Just look everywhere from the Central Park crowds to the beaches of California. Right now, people en masse have no fear of congregating. Right or wrong, reality prevails.
Hmmm. Handshakes and habits. We were talking about this on a family gathering (virtual of course). Will handshakes come back?
In the last three years a have spent about one-third of my time in China. My daughter asked, “Do they shake hands in China?” My first answer was going to be yes. But then I realized that, out of habit, I always put my hand out and they respond. I could not tell you if they ever initiate or if they are just responding to me.
Great point, Gene. I have already said to whomever will listen that the world should adopt the mostly Eastern Hemisphere’s tradition of bowing rather than handshaking. It’s respectful, sanitary and non-threatening.
I tend to agree. I don’t see anything much changing structurally – permanent/sustained contraction in travel, altering health codes or building codes for work places, etc. There will be headwinds for the next 12 to 18 months as the vaccine is still in works and memories are fresh. After that period though, we should see a slow pull back to pre-COVID-19 habits in terms of travel, hospitality, conventions and restaurants.
Some behaviors and trends got accelerated and will likely stay – physical retail will continue to struggle, grocery shopping online will remain, as will extended working from home and digital media consumption.
The “old normal” won’t return until there is a vaccine in place — which hopefully will be administered as widely as possible. I’m old enough to remember mass administration of polio vaccines and oral preventives, and there was no resistance to the idea of lining up for your polio shot. It was a triumph of government coordination to address an urgent public health problem.
Until that day comes (soon, we all hope), there will still be restrictions on matters of “social distancing.” Restaurants will be half-full, people will become accustomed to wearing masks (as they routinely do in Asia), stores will need to control capacity and spacing between fixtures.
Even the “old normal” may look different, if retailers and restaurants discover that they can generate incremental demand from delivery, takeout and curbside pickup services.
I don’t think it will be business as usual. Some things will change like grocery shopping. People are now more comfortable with grocery BOPIS and delivery and that trend was coming before COVID-19, so it has just adjusted the timeline forward by three to five years. The “dark store” concept is a reality. Just like Bed Bath & Beyond announced last week, this trend will continue with micro-distribution and automation coming to a location near you. I believe both these trends, which began pre-pandemic, will expand rapidly in the coming months because they make financial and health sense.
There is no doubt that some things will change. And there is no doubt that other things will remain the same. The balance between the two very much depends on what happens over the next few months.
However, my view is that over the longer-term many of the very radical ideas which increase friction for retailers and consumers simply won’t fly. Many of the postulations which go against human nature – such as the mass abandonment of physical shopping – are also extremely wide of the mark.
We mustn’t forget that we are in the midst of something exceptional and while it may drag on for a while longer it will, at some point, come to an end.
This all feels like it will produce some kind of classic bell curve of behavior change. Some people will not want to make any substantive changes in their lifestyle. Others in higher risk categories may make subtle or drastic changes in their behavior. Something as simple as the daily wearing of face masks while in public may become a common practice in the U.S. A couple months ago the sighting of a face mask in public would have been highly unusual. Going forward it may very well be commonplace. Will the handshake live on, or will Spock have given us our new salutation? If open serve food bars stay closed, how do we handle open serve apparel — meaning the whole mall? Do malls become giant showrooms so we can order packaged product from the DC? It feels like the logistics of the last mile and even the last three feet are in for some big changes.
At this stage any projections about the new normal, post-COVID-19 are pure speculation. We are certainly creatures of habit, and until consumers and businesses have had time to process what the necessary changes mean to prevent the spread and keep everyone safe, it’s too premature to re-imagine what the future shopping and dining out experiences will be.
While the change won’t be as radical as everyone believes, there will be necessary changes. What we do know is that COVID-19 has hit the accelerator on the digital transformation trends as well as leveraging the physical stores as micro-fulfillment centers, contactless same-day delivery, and deeper partnerships between third-party logistics companies. The stores will continue to remain relevant, and a place to experience new products and services.
We are not clear on what the end game entails. Until we reach that point, COVID-19 has raised the need for all companies to re-examine their operating models.
Time, more knowledge about the virus, and meds will ultimately mitigate much of the fear that many currently have about interacting with crowded stores and crowds in general. However, it is fair to assume that a significant number of shoppers will be much more cognizant of close social contact and sanitation practices in the store going forward. To that end, I think it’s reasonable to expect that large store formats (which must attract big throngs of shoppers to be profitable), will have to work much harder to allay the fears of their shoppers than smaller, less crowded bricks stores. In these large stores, more attention may be needed to automate the process of social distancing remainders, balancing aisle traffic, even traffic count limitations in extreme situations. Further, technologies that help the shopper more quickly locate the items they seek so that they minimize their time in store should be increasingly popular. In all bricks stores, offering a touchless payment system option is likely to be well received in addition to expanding the efforts in delivery and contactless pick-up at curbside. To the point that others have made, this pandemic looks to accelerate many of the initiatives that have already established beach heads in the industry. Now it is a matter of best understanding both short term and long, which ones resonate the most with shoppers who are in the midst of changing their behaviors and attitudes with each new CDC update.
It is a curious question indeed. Briefly, retailers basically paid zero attention to all my research over the years. Not that they never listened. But I remember one of my long-time “friendly” retailers, in an internal presentation to their senior team, the challenge from one of the team, “But our target demographic is the STOCK-UP SHOPPER!” A tiny slice of their actual business. This confirms my accurate depiction of retailers as “merchant-warehousemen,” making their profits from supervising “brand-on-brand” mayhem (competition) in the aisles.
Unfortunately, brands hardly are able to focus on the shopper, given the roaring cacophony of competitive “communication” they are immersed in. None of this detracts from the absolute genius, and societal benefit of self-service retail. Amazon’s Whole Foods is no significant advance, but Amazon GO represents the cutting edge of a vast change that will sweep bricks-and-mortar retailing. But it is still short of getting to “the mind of the shopper.”
First, online sales will break the classic tipping point because of this catastrophic event. Once consumers who have never really relied on e-commerce do rely on it and see how easy it is, there’s no FULL return to majority-physical shopping.
The above is just the first domino. Many more stores will close for good and many developers will be left holding the bill. Reduction of work force, closed mall eye sores and super advanced e-commerce will allow some to stay relevant but on a much smaller scale. These are all trends (as stated) that started years ago, but due to current events, just got put into hyper speed. Thankfully. The slow death spiral of many retailers was hard to watch.
The other gorilla in the room is Amazon. I’d look for some scrutiny there from on high at long last. And finally, on the good side, look for “third wave” (i.e. local) retail to really take hold. Buy online or from a discounter, and enjoy that excellent local coffee shop; the future is here.
All of these “new normal” predictions I believe are way overstated. Since people are social animals, when the fear of the virus is gone, people will go back to working, shopping and entertainment just as before. I agree with Young’s comment that a radical new normal is highly unlikely. Some of the experiences like remote teleconferencing will likely stick to some extent, but a slightly modified old normal will return in the future.
When we arrive at the new normal, it will be just that — normal. How different will it be? Retail was designed and implemented the way it “was” as it met and catered to behavioral patterns and desires. I don’t think those will be massively changed — they will be adapted for safety reasons, but not fundamentally changed. When everyone feels safe again (post-vaccine) and our short term memories take effect the new normal will be a few degrees off of those soon-to-be fuzzy memories of today.
I am closely following what’s happening in Las Vegas right now, and what the various companies are doing to reopen the hotels and casinos. No one has mentioned “disease-resistant buildings.”
Of course, some things will change, just like they did after the 9/11 attacks. Some of these changes will be temporary, and some will improve the shopping experience, but when this is all over and a vaccination is available, I believe shopping will go back to a version of what it once was. We are social animals and we like to shop; we will find a way to make shopping a fun and safe experience again.
It’s best to look at this from multiple angles. First, there is the “new normal” as lockdown scenarios start to be lifted by states across the country and by other countries around the world, but before a vaccine is available. In this timeframe, yes, there are likely to change, but just how drastic they are will vary. Offices don’t need to be drastically modified if workers are still allowed to work remotely to reduce density in the buildings. That said, will building owners look at ways to improve air filtering? Yes, I expect they will since such changes have long-term benefits regardless of the current environment. I have not heard anyone talking about disease-resistant buildings, and perhaps we will see that long-term in new construction but that doesn’t seem realistic to have an impact near-term. Where the greatest impact may be visible is whether or not consumers feel confident enough to return to malls to shop. While consumers have a choice between quick in and out of stores in a strip mall vs an enclosed shopping center, I expect many will avoid those larger malls until a vaccine is available.
Once we do have a vaccine, the long-term changes discussed seem less likely to be needed and frankly, tolerated by the majority of consumers who will have gone through a very long time of confinement, social distancing, etc. and will likely want to return the “old ways.” I don’t see vast amounts of urban populations suddenly deciding to leave their cities and move to the suburbs.
Some great commentary here, which is a breath of fresh air given the non-stop negative views pushed by the media. There’s a lot we all know, and lot more we don’t.
Fact-based decision making is essential at times like this. The fact we know best, and that’s been researched for years, is that humans are hard-wired for connection and social interaction. That doesn’t exist with much depth online. Will there be changes? Yes, but what they will be are mostly guesses now. What’s most likely is that retailers of all types are going to have to raise their games substantially in all areas of operation. The consumer will win again.
The “new normal” is all about acceleration. Activities from shopping to entertainment, to healthcare, to exercise, to dining will experience changes that would have normally taken five years in a matter of months.
How many doctors and patients are finding that virtual visits are as effective as in-office visits for a large segment of their needs? How many of us are finding we can get along just fine without our regular sports fix? Are we happy with seeing first run movies on our big screen at home and making our own popcorn? And, as most of my colleagues noted, shopping. More online, less need to go to the store. Maybe we are forced to try new brands and find that the new, cheaper ones are just as good as our tried and true favorites? Noting my picture in the corner, will I morph to having a ponytail permanently?
Will we appreciate our relationships more? Our around-the-world family has been getting together about every two weeks for a virtual visit. In the last 30 years, the entire family has been together only twice. And dear friends that we normally connect with once a year or less, we are now connecting with them every couple of weeks. Will this be the new normal?
I am looking forward to the new normal, technologically, behaviorally and personally.
Preventative measures like air filtering services and bacteria-resistant surfaces are relatively easy to implement, particularly for larger businesses and shopping malls. But perhaps we should not expect to see drastic changes in small businesses, who have bigger concerns coming out of the financial crisis.
Temperature checks before entering an establishment seem difficult to implement on a large scale, and also somewhat invasive and inconvenient for shoppers. More efficacious might be to make home thermometers or temperature check kits readily available so that citizens can do this before going out.
In this instance, retailers and employers alike must keep in mind the importance of positively reinforcing the choice to stay home in a culture where many Americans don’t take sick days (if they are fortunate enough to have sick leave) or who still feel pressure to go to work or run errands despite being ill. To make this work, there needs to be a cultural shift that so that people aren’t “punished” for practicing health safety and consciousness.
As grim as COVID-19 has been to people and the economy, there is some positives to be taken away. Specifically as it pertains to this article, the crisis has pushed many of us to accelerate our use of technology. It’s not new technology, it’s the adoption of existing technology. I believe we’ve jumped about three years into the future. What you see today is what would have happened if we had not been forced to change the way we do business due to the crisis.
A lot of retailers will be looking very hard at their retail stores and will reduce space where it is not productive. With the pandemic, more people have started shopping online. It has just increased the speed of change and this will put pressure on brick and mortar stores. Any retailer that is over spaced is likely to look at closing stores that are not productive and profitable. They may also look to using those stores for local online fulfillment centers rather than retail stores.
It will take people time to have the trust to go back out shopping in densely populated shopping malls, so the impact will last longer than the lockdown and hence reduce the profitability of some stores longer than retailers would like. If the online channel holds up after lockdown ends, there will be a greater need for local fulfillment centers to meet the demand, this may lead to retail locations changing their use. The losers will be the companies that are not adaptable and believe that we will go back to the old norm. At times like this, it is the innovative flexible and adaptable companies that will win.
I expect that the biggest difference will be that air filtration and sanitization will become a selling point for brick and mortar sellers. As has been the trend with next-gens, how retailers treat and provide for employees will continue to take on increased significance after the crisis—especially since during the pandemic healthcare and sick leave has become a life or death issue for so many young workers.
The most likely changes will be those that amplify exists trends: department stores and public transit riding have been declining for years — many dollars spent and the claims of enthusiasts for the latter notwithstanding — and that may accelerate. “Disease resistant” buildings (or any other high-cost/low value propositions)? No.
The comment about “once a vaccine is developed” is telling: if people were very insightful or maybe just pessimistic, that wouldn’t matter much, for they would realize some other contagion might be lurking just around the corner. Of course people generally aren’t either of these things, which is probably just as well for retailers.
Specific predictions are risky. But some characteristics of the new normal are coming into focus with increasing clarity:
The “new normal” is going to look a lot like the current normal, with known social distancing practices continuing and new ones developed based on science and experience. I think there will be a move to develop and implement disease-resistant surfaces in stores and malls, and to find more ways to efficiently clean and disinfect. There will certainly be new iterations of buy-online-pick-up-curbside and we will also see new and improved versions of contactless home delivery. As others have noted, we need to stay grounded in what’s practical to achieve and what works.