Photo: RetailWire
The new normal will look a lot like the old normal
Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Refrigerated Buyer magazine.
I’m older than dirt, so I’ve been through a long list of “new normals” and “paradigm shifts” in my lifetime: the widespread use of DDT, Elvis, ISIS, heart transplants, walking on the moon, efficient consumer response, category management, Big Data … You get the idea.
I’m not saying that nothing has changed or will change because of our pandemic experience. But assuming scientists (and not politicians) are allowed to develop inoculations and we don’t all die in the meantime, I expect things to return mostly to “the old normal.” For better or worse, it pretty much always has.
The “new normal,” for those who insist on calling it that, will see some moderate changes. I don’t expect they’ll be permanent. As George Harrison famously cribbed from the Tao Te Ching, “All things pass, A sunrise does not last all morning … A cloudburst does not last all day.”
Here are three changes triggered by our pandemic:
- We’re getting to know our trading partners better, on a personal level. When I surveyed our readership last month, this was a recurring theme. People are less likely to argue, and more likely to work together toward a common solution. And they’re more likely to learn about each other’s families, hopes and dreams.
- We’re seeing the upside and the downside of home delivery and click & collect. Before the pandemic, it was full speed ahead on home delivery and grabbing market share at all costs. Those crunching the numbers and working through complex issues know that “all costs” need limits.
- We’re valuing our “essential workers” more, whether in-store, in processing plants or within the logistics sector. Without these folks, we’re screwed. For the first time, we are recognizing this, although it’s taken strikes and job actions to get our attention. These folks need more than pats on the back (from a safe distance) and “thoughts and prayers.” They need respect and better wages and benefits. In my book, they’re a helluva lot more vital than your average investment banker.
The first two of these things will have a somewhat significant and lasting impact. I have my doubts about the third.
Discussion Questions
DISCUSSION QUESTIONS: What changes do you expect under the “new normal” of retail operations at food retailers? What change do you hope COVID-19 brings operationally to food grocery?
Poll
BrainTrust
Kathleen Fischer
Director of Marketing, Körber
Phil Rubin
Founder, Grey Space Matters
An extremely pragmatic and sound take on this experience. One of the changes I believe will stick around are in-store shields. The supplies were acquired, they’re cost effective, and they are an easy defensive measure – they’ll stick around. What I hope also sticks around: in-store efficiencies and a hurried-ness while shopping. I’ve never been one to meander in the store, so I appreciate the current “get in, get what you need, and get out” shopper mindset.
One change that I hope sticks around is that the situation has all of us showing gratitude and respect to essential workers in-store and throughout the supply chain. As Warren says, “Without them we are screwed.”
In many other countries, clerks and merchants seem to be given a higher level of respect than they are afforded here in the U.S. That needs to change, with how we treat them and how much we pay them. They deserve more of both.
I don’t agree with Warren and neither do 83 percent of C-level retail executives recently surveyed by Cambridge Retail Advisors. Things won’t be snapping back to what they were. We have seen a shift to e-commerce that is massive and has probably taken three to five years out of what would have been its normal progression from brick-and-mortar. We have gone from 10%-15% adoption to 35%-45% adoption overnight. I don’t see it retreating much when things return to “normal,” whatever that will be.
When grocery shopping was a mess, of course people went online to try to solve the problem. Unfortunately, online was not a better experience. I don’t believe the adoption rates will stick. People still want to go to a grocery store and touch, or not touch, things themselves.
I’m Bob on this one, Ken. The surge in online grocery ordering has exposed its inadequacies. For many new e-commerce shoppers it has been a bad first impression.There may be some tailwind, but I’d caution strategic planners not to assume too much.
I was surprised and delighted by the grounded clarity of this discussion when I saw the title and description in my inbox this morning. I should have known it would come from a level-headed veteran — and Warren has always been that. As for the premise, I heartily agree with Mr. Thayer’s position. The changes we can expect will be significant, but not a sea-change. The WSJ reported a study today citing 20% of shoppers shifting from their regular grocery store during the pandemic. This will likely shake out in the 3%-5% range of shoppers actually shifting (more likely adding an additional retailer to their normal routine of shopping three or four stores.) The permanent shift to online will be greater, but much of that may still be with the same banner — if they are prepared for e-commerce. One last observation — cell phone tracking is showing that most of the country only reduced normal activities slightly, most of that presumed to be going back and forth to work. For the great bulk of America the biggest changes from COVID-19 were no dining out, no TV sports and a concern for toilet paper.
In terms of what the future may hold, there are some very silly suggestions floating around – many of them designed to grab headlines. I entirely agree that, in the longer-term, retail will mostly revert to how it was before this crisis hit. Sure, online will capture a higher percentage of sales than it otherwise would have, contactless payments will increase, and precautions like plexiglass screens will remain. But other than that there won’t be many radical shifts in grocery. That said, the sector will continue to face disruption on a number of fronts: the rise of value players, the shift to online, the need to use micro-fulfillment from stores far more, and so forth. These, and not the virus, are the real drivers of change.
The most significant change is the acceleration toward omnichannel grocery – which will be much faster because of COVID-19. Walking through a grocery store where you have to line up, be socially distant and respect things like one-way systems is not appealing. Curbside pick-up, home delivery and other approaches will be retained by customers – adding capacity now in these areas will reap rewards because even with a cure or inoculation there will be so many people who choose to stay with their newfound way of buying.
The “new normal” should be labeled the “new short-term normal.” It is just a matter of time before we get back to a sense of normality. There will be just as many shoppers buying as they have always been. In the short-term there will be social distancing, limited number of people in stores and more to keep everyone safe (customers and employees). Once a vaccine is found to be effective, we’ll go back to our old ways with some slight behavioral modifications. That said, it would look more like pre-COVID-19 than what it looks like today.
The pandemic has forced late adopters through the technology learning curve. From click-to-brick, to GrubHub, to grocery delivery, more people have adopted or at least tried online platforms for food retailers. Though some will not adopt these behavior long term, some will, and most will keep the apps on their phones, eliminating one of the most difficult barriers to bringing new consumers to an omnichannel experience.
Now that my in-laws are getting the hang of online ordering, and as the performance has steadily improved, they won’t be going back. Dad has a hard enough time getting in and out of the car, and Mom doesn’t want to do the shopping alone. Frankly, Shipt will help them stay living at home independently for several years longer than they would’ve otherwise — and cumulatively that’s a big positive impact on healthcare and senior living facility demand.
Some valid points. For #2, we’ve gained years of experience and growth in a couple of months – let’s keep pushing it to make it a better experience. I hope you’re wrong about #3, but time will tell. The next time a contract discussion comes up we will see how much companies really value those workers.
I wish I could agree. Between Americans’ insistence on heading out in droves and the government’s passing of the buck to states, there’s not a lot to be positive about. We’re looking at dramatic changes to our economy and to retail specifically. Grocers have led the way in protecting associates, and other segments should follow their lead.
If there was even a hint of a vaccine on the horizon, I would understand the approach of this article. But there isn’t. We have no clue how we will respond to the probable second wave or the coming fall season. And we have a federal government that seems to be impervious to allowing science to do its job. Given that, this article feels a little casual and premature. And how old is the “old normal?” A month, a season, a year? We are experiencing what for some businesses will be an Extinction Level Event. With the level of change the retail business was experiencing pre-COVID-19, and now the level of change accelerating the way that it is, I guess I find the use of the word “normal” to be a little odd. I don’t think we’ve yet scratched the surface of all the lessons to be learned out of this whole episode.
The “new normal” going forward will be different. Consumer acceptance and usage of online grocery shopping and delivery has increased significantly and will stay at higher levels. This will require grocers to continue to make changes and update their systems and processes to offer this option more effectively. I do hope that the recognition of workers who have been on the front lines putting their safety – and that of their families – at risk, continues forward as we have found over the last few months that they truly are essential.
I visited a busy Von Maur department store in Wisconsin on Saturday. Other than masks and signage advising shoppers to social distance, etc. you would have never guessed we are in the midst of a pandemic. People were happy to be shopping again.
The COVID-19 shutdown reminds me of the old “dip your finger in a bowl of water” exercise. When you remove your finger there are only ripples left behind. We too are resilient like that.
Of course there will be caution and changes, slow starts and mis-starts, but retail will bounce back. Will shopping online and curbside continue to be important? Absolutely, but so will brick-and-mortar stores.
Georganne, I’m curious (as a Wisconsin resident): Was everyone wearing a mask? I saw a newspaper photo of another store at that mall where someone was shopping without a mask. Very disrespectful (in my view) of the hourly associates taking a risk by coming back to work, and a sign of our overly politicized times.
I was at an outdoor town center. All of Von Maur’s associates were wearing masks, as were the mall security guards and the associates in the other stores that were open. Most of the customers were not.
The store looked good, the sales floor was set with workhorse fixturing to get the product on the floor. If you appreciate irreverent comments you might enjoy the live segment I did from the store. You can view it on our Instagram TV: @kizerandbender. 🙂
It’s easy to brush off what seems like dramatic changes in grocery retail during the pandemic as being “temporary.” The gigantic leap in online grocery, for example. Sure, we’ve seen an acceleration of a good five years of adoption, but much like e-commerce in non-essential retail segments, this is out of necessity more so than desire by consumers. Once there is a vaccine and the world returns to pre-pandemic norms, how much of that online buying will remain? Sure consumers are creatures of habit and many will continue leveraging the convenience of grocery delivery and curbside pickup – but many will go back to their “old routine” of grocery shopping. I expect we’ll still see a double-digit online portion of grocery, but not the 25%-35% that may be happening now.
Things like shields at checkout are likely to remain as they will continue to provide a sense of safety even in a post-pandemic world. What I do hope will change are store layouts. This pandemic should be teaching us that store layouts that haven’t changed in nearly 100 years need to adapt. If customers move to a combination of pickup/delivery and in-store visits for different categories, then why not make those in-store visits easier? Current store layouts aren’t designed to be good for the customer, they’re designed to be good for the store – that needs to change. Then there’s micro-fulfillment and the concept of dark stores for fulfilling online orders. There will be a rise in these facilities and that’s a good thing for the industry.
Lastly, I hope that frontline workers come out of this pandemic with the tools and recognition they deserve, not just by the public, but by their employers. Retailers have long since needed to recognize that those frontline workers ARE their brand. Without them, their brand loses relevance. Sure customers can go online but until consumers buy more online than they do in-store those frontline workers mean everything to the brand and it’s about time they were treated like that.
Showing respect for supermarket employees and keeping them safe is a given. When this settles down, things will get back to the competitive beat downs in how we advertise with more loss leaders, and profits will shrink back to the old terrible bottom lines as we refuse to give up market share. That is part of our problem, with many discount low labor retailers who make it difficult to turn a good profit.
I pay my employees pretty well, and cook meals for them, and try to make it a good place to work — but to promise them wages that are beyond a business owner’s capacity, because it the the right thing to do, simply won’t work. The bills would pile up quickly. Add in the cost of health care (and by the way, this isn’t just for supermarket employees, as other small businesses are facing the same thing). I’m re-evaluating everything now. If we come out of this with an upswing in our sales, then yes I’ll continue to provide more for my employees, as I already handed out bonuses the last few months. The crystal ball isn’t so clear right now. Hopefully we can move ahead and provide our customers with great values and service, and still turn a small profit.
Beyond the enhanced focus on safety and sanitation (compared to where I began in the grocery business in the ’70s), which is a great thing regardless of going through a pandemic or not, I believe a nice thing to come out of this mess is the heightened awareness of food industry workers. If the positive sentiment toward food workers lasts in the long-term, this will be great for recruitment in our perennially-challenged, high-turnover industry.
I believe most will snap back. I have personally learned why pizza and Chinese food drove the take-out market prior, most foods just don’t deliver well. I hadn’t given delivery much of a try before, but I won’t use it moving forward. In terms of grocery, I agree with Forrester’s research and while it will be a bigger percentage it isn’t going to be majority, the stores definitely don’t want it, the average per cart is way down when ordering what you need online versus walking through a store. Wandering fills the basket, especially if you bring your kids.
I wish I could be as idealistic as Warren, especially on the issue of respect for “essential workers.” There is plenty of evidence that face masks have turned into a political issue, rather than being used universally as a sign of respect toward others’ physical well-being. Right now, the new normal doesn’t feel all that new, as our two-month “Era of Good Feelings” is coming to a predictable close.
Dick, there’s no question that much of the legislation, posturing, press and personal reactions to the shifting sands of all things COVID-19 have become political and social statements. But it seems the general population’s varied responses are at least somewhat justified by the conflicting messages and behaviors of various scientists, leaders and press. Those smart enough to recognize the sensationalized junk science (such as quoting frightening morbidity rates that inaccurately compared deaths per confirmed cases via testing for COVID-19 with deaths per infections for common flu strains) have a legitimate reason to suspect all the other directives (“a mask won’t help” vs.”a mask might make you sicker” to “masks save lives.”)
I sure don’t see the part about valuing frontline workers happening. The majority of businesses seem to be opening as fast as local and state governments will allow, putting frontline, low paid workers at risk. And, customers in many areas are ignoring social distancing and not wearing masks while they shop. The new normal is indeed looking like the old normal. Frontline workers are undervalued and underpaid.
While I prefer “next normal” rather than “new normal,” I do think that some of the shifts we are seeing will stick. Given that 89% of consumers are “concerned about shopping in physical stores” according to Harris research (field 4/28-30), the next or new normal will or at least should acknowledge and show commitment to customers’ and employees’ safety and security. While that doesn’t mean that the seismic shift we are seeing will stick — it won’t — there are segments that will and also new entrants that will continue to thrive, one example being a local restaurant purveyor that added direct-to-home delivery of meats, poultry, seafood, etc.
Regardless, we unfortunately have a while to go before there is a vaccine and the longer some of these new habits continue, the more likely they will stick for some. Inertia is a powerful loyalty strategy.
Nothing feels quite “normal” in retail at this moment, but I mostly agree with Warren’s premise that many fundamentals will return in the months to come.
Still, the pandemic is a bell that cannot be un-rung, and I would expect some business practices and shopper behaviors to exhibit enduring changes, as identified here.
I’m particularly hopeful that present experiences result in a lasting elevation in stature for store workers. When management signals their importance in the store by protecting their safety, enabling their success, and compensating them well, at least some shoppers will take the hint.
I’m reminded of the lyrics from a rock and roll classic by The Who: “Meet the new boss. Same as the old boss. We don’t get fooled again.”
Specifically for #2: I do expect to see an uptick in home delivery, BOPIS, and curbside pick-up; grocery retailers will just have to figure out a more cost-efficient system as many are still cautious about returning to old habits. However, BOPIS and curbside alone won’t be enough; an even more important aspect is customer experience and loyalty. Amazon has mastered this really well and small DTC companies are beginning to replicate best practices.
For example, Whole Foods can show you what you recently bought, what people in your area are buying. Kroger’s app allows shoppers to scan and check out items as they go to avoid the checkout line. Adaptive convenience elements like this are what win consumers over. Online digital shopping furthermore provides a goldmine of data that grocers must tap into in order to increase CLTV not just for now, but in the new normal as well.