Most advanced countries have become complacent about the contribution retail will continue to make to their service-based economies, despite there being far too many physical stores providing mediocre service to customers.
Retail guru Mary Portas writes in the UK’s Financial Times that the current Coronavirus pandemic will expose these poorly-performing businesses, with many of them failing to make it through.
“In the brave new world that we are reaching for now, the quantity of stores will go down but quality is more likely to go up,” she argues. “Average is over. Mediocrity is out the window.”
On both sides of the Atlantic, department stores are failing. Neiman Marcus, Macy’s, House of Fraser and Debenhams are in deep trouble, but Ms Portas suggests their model is out of date, offering very little beyond “floors of stuff”.
She cautions against a total wipe out of physical stores — although the virus is certain to thin the herd — but says they will have to offer a great deal more to tempt people away from shopping from their sofas.
“There will always be a place for physical shops, but they will have to be exceptional. This doesn’t mean expensive; it means brilliant and ingenious,” Ms Portas predicts.
Consumers have been spending less on “stuff” and more on experiences for several years, a trend that may have been interrupted by the Covid-19 emergency. Ms Portas is uncertain about whether the early months of a bounce back will see this continue or change.
“It remains to be seen if the trajectory we were already on before this crisis, with the rise of conscious consumerism and sustainability, will continue. Will we double down on redemption by restraint, consuming less? Maybe we will rebel against enforced cultural and consumer quarantine to go everywhere, do everything, buy now. But the future of modern aspiration has very little to do with more, more, more,” she concludes.