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Covid-19 has changed people’s consuming habits, but how exactly? Lockdowns across the globe boosted trends that were already emerging before the pandemic. We identified these trends and reviewed some examples from various markets.

Home

The “Netflix and chill” was already the new hot Saturday night pre-covid, and people had been activating their nesting mode for the last few years, as shown by the “Hyyge” Danish trend (a sense of cosiness that comes from doing simple things such as lighting candles, baking, or spending time at home). This translates into quilts, pillows and good food to ensure a good night home. Obviously the trend was taken to an all new level when the pandemic forced us to stay in. A trend which might become the norm eventually, as remote working -already in sights pre-Covid- has also been accelerated by the situation. A study by FlexJobs released in February 2020 (before the pandemic) indicates that remote working has grown by 44% over the past five years in the US. A study by McKinsey published in July reveals that “74% of surveyed CFOs plan to keep part of their workforce permanently remote after the Covid-19 crisis.” McKinsey also highlights that in “around 200 million people were working remotely by the end of the Chinese New Year holiday” this year.

Lifestyle

Forced remote working (because of lockdowns) gave legitimacy to sweatpants, and more generally comfortable clothing. It follows the athleisure movement that already allows for people to walk down the street wearing leggings and sports equipment with style. Without overanalysing, we can only assume that the next generation of worker will be mobile and will need a hybrid workwear wardrobe both smart and comfortable, that adapts to the new habits of consumers: working from home to office, biking to work, using flexible offices. Additionally, in the current economic uncertainty and the financial crisis that will follow the health crisis, people are not particularly in the mood for crazy fashion. They need basic, daily essential clothing to suit the timing we are entering.

Local

The sanitary crisis also accelerated the desire for local consumption, in food and fashion. According to consulting firm Nielsen “local origin has become an important accelerator in brand/product decision making during COVID-19 and will remain a major choice driver into the future.” Indeed the fact that global supply chain slowed down during the lockdowns, forcing people to rely more on locally produce items, led to consumers putting more trust in the local market at the exit of the crisis. A study by Cetelem lead in Europe shows that “94% of those surveyed think that products manufactured in their home country offer an added guarantee and 93% believe the same is true of regional products.” Customers also see local consumption as a way to be more sustainable and to support the local economy.

All these trends do not necessarily question retail as we know it, but as we make it, and address the needed actions to activate the change, with a common guideline: go back to the essential.

What made the department stores great when they opened in the 19th century was to give clients the possibility to buy everything, and anything, at one place. It was convenient. Soon they started selling products made with valuable material. It was fancy. They had an assortment available nowhere else. It is exclusive. And they used to be a platform launch for brands. It was trendy. For some they welcomed clients in the most beautiful Art-Deco buildings. It was magical.

**WHAT NOW:

HOW CAN DEPARTMENT STORES ADAPT QUICKLY TO THE NEW TRENDS?**

Home & Lifestyle

Retailers should rethink their assortment and their lifestyle offer. Put the accent on home and furnishing, as people are learning to spend time in their own home again when they have been used to spend the biggest part of their day in an office for most of their life. Highlight clever ways to make a home-office. In its strategic plan, Swiss IADS member Manor indicates that it is repositioning its focus toward core activities such as home and beauty. During the lockdowns, Filipino IADS member SM Retail offered ‘ad-hoc’ catalogs, made-to-measure curated offers based on the physical inventory and focusing on immediate needs for customers like for Home, to ensure a good remote-work environment, and Toys, to keep the kids busy. There is no surprise that the home department was the busiest and most popular.

In fashion, department stores should turn toward a comfortable fashion offer, and stock stylish training gears that are necessary for the new urban equipment (bikes, scooters …) that are practical and wearable in the office, as Printemps did when opening outdoor dedicated space La Réserve in its Paris flagship.

Local – in terms of customers and assortment

Become again a local retailer. Big flagships in capital cities should compensate the lack of tourists’ flow by betting on their local clientele. Know you immediate customers, watch their environment, learn from their lifestyle, and gave them what they want and need. You don’t sell the same handbag to a Parisian woman and to a Chinese tourist. A way to know one’s customers is to offer one-to-one shopping experience such as personal stylists like French IADS member Galeries Lafayette did when launching its new personalised live video retail service in May 2020 or via extensive data gathering like Nike is doing through its diverse communication platforms (see our latest exclusive article here). For instance, Venezuela-based IADS member Beco reaches their customers directly on Instagram, attracting a younger, social-media savvy crowd. That is how the retailer adapted its offer before launching its e-commerce this summer.

Increase the offer of locally-made and locally-sourced produce in the lifestyle and the food departments is becoming necessary so retailers should turn to local designers and producers. Here again Manor is reinforcing its local F&B supply chain strategy, via its ‘Local’ label, promoting locally-sourced fresh organic products. Betting on local brands and producers is also a way to diversify the assortment from one big chain to another on a global level.

Conclusion: what is your next step?

Look at Texas-based retailer Neighborhood Goods whose success story should be an example and inspiration for department stores. Referred to as a “new type of department store” by the retailer itself, and dubbed ‘the new Sears’ by Forbes, the three physical locations (open in less than three years) feature an ever-changing rotating assortment, carefully curating brands that are right for each neighbourhood, and therefore offering something new each time a customer returns to the store. Plus, a rotating and time-limited assortment will help avoid being left with too much stock -especially in this uncertain timing.

We can question if having a rotating assortment a suitable model for department stores; or if investing in the local market will be their recovery. However we acknowledge that the health crisis, as it did for retail and fashion trends, has forced a change on department stores that had been in question for years now, and it is up to each to define what is their priority. Is it adapting assortment? Is it re-engaging with customers on all channels? Is it refocusing on core values?

Credits: IADS (Louise Ancora)