How Coronavirus Has Disrupted Retail
The New Choluteca Bridge in Honduras was built to last. Completed in 1998, the designers of the bridge wanted to make sure it would survive the hurricanes that frequently battered the region. No sooner had they finished than Hurricane Mitch swept across Honduras, dumping up to 75 inches of rain and pummeling the nation’s infrastructure with 80mph winds. Most of the bridges along the Choluteca River were damaged or destroyed. But not this one. The designers succeeded where others failed. The bridge survived. Truly a reason to celebrate, except for one important detail:
The river moved.
The force of the hurricane and the deluge of rain left the bridge intact, but wiped out the connecting roads and caused the river itself to carve a new channel. The end result: a beautiful, well designed bridge to nowhere.
It’s worth noting that the designers and engineers did everything right. The bridge exceeded its design specs. There was no mismanagement, no mistakes, no miscalibration. The bridge should have become noteworthy for its survival. Instead, it became a cautionary tale after the ground beneath the bridge literally shifted.
The coronavirus is our hurricane, pummeling our healthcare, societal, and economic infrastructures. If you’re in business, large or small, the coronavirus has caused the river beneath you to change course. And that bridge you’ve spent years building and maintaining might end up going nowhere.
The disruption in retail is a perfect example. E-commerce has been growing steadily since that first online transaction in 1994. But even with that massive growth it represented only 16% of all retail US sales. There’s an emotional connection with a physical store that can’t quite be replicated online. The ability to meander through a retail store and actually interact with the products cannot be underestimated. I have yet to make a Costco run without returning home with something I never knew I needed (or even wanted). It’s those serendipitous discoveries that make in-person shopping so satisfying.
But the retail river has suddenly changed course, sweeping our buying habits along it its wake. It should be no surprise that online shopping has increased during our self-isolation and quarantining. Many brick and mortar locations are closed, and when we’re self isolating the Internet is our only option. Online shoppers in New York, the area hardest hit by the virus, increased 37% in a matter of weeks. As stay at home orders continue that number is certain to climb.
Once we’re through the worst of this pandemic the e-commerce pendulum will swing back. Physical retail purchases will increase, but they will have lost some momentum along the way. Some small retailers won’t survive. Large retailers will close some physical locations. Meanwhile, our online shopping habits will become more permanently ingrained. Any way you look at it, our well-designed retail bridge may no longer be relevant.
Fortunately, our metaphorical bridge can be moved. If you’re in retail you’ve likely been moving it for the past few years, brick by brick. Now is the time to refocus your efforts. This Klaviyo post has some prescriptive guidance for doing just that. A couple takeaways:
- Planning: Yes, this is a challenge in the midst of a crisis, but it’s more important now than ever. With a solid plan in place it’s possible to come out of this stronger than before.
- Engage with your customers: Modern channels make this easier than we could have possibly imagined a decade ago. Your customers are posting online. They’re mentioning your brand on social media, review sites, and forums. They’re asking questions and hoping for answers. Now is the time to engage. They need your help, and you’ll be strengthening relationships that will pay dividends in the future.
We’ve been talking about digital transformation for years. It’s an understatement to say that the coronavirus has forced that discussion to the forefront. Digital transformation is no longer a “nice to have.” It’s an imperative. The river has moved.
In 1968, Robert P. McCulloch, an American entrepreneur, bought the19th-century, stone-arched New London Bridge from the city of London for $2.46M. He then painstakingly shipped 10,276 granite blocks 5,400 miles and reconstructed the entire bridge in Lake Havasu City, AZ. He literally moved the bridge, which is now the second most popular tourist attraction in Arizona. The Grand Canyon is the first.
Our response to the changes the coronavirus has forced on our businesses may seem daunting, but at least we’re not relocating 130,000 tons of granite. It’s possible to emerge from this stronger than ever. We just need to move the bridge.