One thing that has become clear as a result of the COVID-19-related stay-at-home orders is how much we need physical retail locations for places to gather, commune, recharge, and relax. While retailers have worked hard to make sure we can obtain essential items, people are still mourning the loss of “somewhere to go.” As many states open up retail, we are seeing communities that are ready to get back inside of the store. Weeks of limited social interaction have some restaurants seeing lines around the block, and while most aren’t operating at full capacity, they are still finding creative ways to engage their customers. Our team members took a look at many of the ways retailers are working to pull our communities together when we have to stay apart and how they are stepping up for those in need even when they are facing enormous challenges themselves.
Shopping centers and retailers find new ways to bring us together
In a recent newsletter, ICSC referenced a group working to bring drive-in movies to shopping centers and utilize area restaurants to serve food to patrons in cars. Bars in some metro areas who will likely not be able to open until the last re-opening phase have been hosting similar events within their parking lots.
Lazy Dog Restaurants across the nation offered DIY brunch packs for Mother’s Day; several ice cream makers have been delivering ice cream sundae kits right to their customers’ front doors; and Ikea helped tired parents entertain their kids with instructions on how to build blanket forts from Ikea products. From food to fun, creative retailers are finding ways to fill the entertainment and experiential void even if we can’t participate together.
Regulars and brand loyalists step up to help their favorite restaurants and stores
For retailers forced to close during the pandemic, a sense of responsibility from the patrons of those establishments has emerged.
In the Dallas area, patrons of Freeplay, a “barcade,” donated more than enough in 24 hours to keep paying their employees until they can open again.
Alamo Drafthouse first offered Alamo-at-Home for in-home streaming of films in line with the brand’s indie film roots. The service has evolved into Alamo on Demand, which is more like an online video store with hundreds of titles available to choose from.
A boutique, Lone Chimney Mercantile, in the Dallas area, hosted late-night Instagram live sessions where the owner took customers through store inventory and allowed them to message her to purchase. Customers flocked to support the retailer and they had to take a few days off from the Instagram sessions just to restock and fill orders.
Some restaurants began offering meal subscriptions for cash flow to help make payroll. In many cases, the program has been so successful that some restaurants have decided to continue it as part of their regular offerings.
Restaurants shift gears to support the community in new ways
While many states gave restaurants the green light for pickup orders from the beginning, some found ways to provide more value to draw in their customers on their limited outings.
Leveraging their supply chain to provide essentials
Restaurant supply chains are quite different than those for consumers and they saw this as an opportunity to help. With a lack of many essential products in stores, many restaurants stepped in to sell groceries and paper goods. Some are packing items together in “meal kits,” while others were letting customers pull items as needed like a market. Whiskey Cake’s Oklahoma City location saw cars wrapping around the building for their meal kits. Dog Haus restaurants posted shopping lists for grocery items right alongside their to-go menus, and customers could purchase everything from meat to condiments, and toilet paper. While selling some of their inventory is a way to recoup some of their lost sales, it is also a way to keep them engaged with their customer base and support their community.
Providing for their own when they need it most
Lily Heimburger, senior vice president in SRS’ Atlanta office, has been impressed with the generosity of many of the area’s restaurants. She says that Staplehouse has converted into The Giving Soup Kitchen, working with local nonprofit Giving Kitchen, to serve more than 50 meals a day to unemployed industry workers. CHAR has started a similar service giving meals every day of the week, free of charge, to out-of-work industry professionals. CHAR’s owner has also started a Facebook group called Quarantine Cuisine which features area chefs and food bloggers doing live cooking demonstrations.
“These restaurants are going above and beyond to provide for their brothers and sisters in the community while also working to serve their customer base. The food is high quality, and the online demos give people something to look forward to each week,” said Heimburger.
To meet our pandemic needs, retailers ramp up purchasing channels
Unless you are a doomsday prepper, you probably didn’t have stockpiles of food and supplies at your home when the safer-at-home initiatives started across the nation. Many physical and online retailers saw their shelves being cleared as panicked shoppers turned to over-purchasing necessities.
While supply chains became taxed, particularly in the paper goods industry, physical stores were able to keep up in some areas such as produce thanks largely to their ability to source product locally. Still, as the stay-at-home orders came into place, shoppers ultimately had to change their habits. Many grocers reported being as busy as around the holidays at first, but then dropped back down as shoppers became more confident that inventory levels were recovering. Continuing the theme of stocking up, they have also noted that shoppers are spending more, but decreasing their visit frequency to limit the amount of time spent out of the home.
Omnichannel retail shines as online shopping and brick-and-mortar retail come together to meet safety and convenience needs
One of the most widespread changes has been the number of people shopping online for necessities to have them delivered to their homes. Retailers who did not have a robust online sales platform stepped up to get one in place, while established retailers worked to enhance their already tested platforms. Target reported more than 100% growth in sales for their digital channels; enough to offset some of their in-store sales decreases. On the surface, this doesn’t sound like good news for brick-and-mortar retail. But, for every order not made on Amazon, there is a high likelihood that your order was filled through your closest physical store.
If you have ordered items online at Kroger, Target, or Walmart, and were given a choice for delivery or in-store pickup, those orders are physically pulled from the shelves at a brick-and-mortar location as opposed to a warehouse.
Using Instacart delivery means an actual person, not employed by the retailer, is going to the store to fill your order, and then delivers it to you. Target has their own delivery company, Shipt, which operates similarly with individuals essentially doing your shopping for you. Target Drive Up means store employees are pulling your items and bringing them to your car. Even DoorDash, Uber Eats, and GrubHub send your order to the restaurant to be picked up by another individual and delivered to your home.
While our point of sale may be shifting online during the pandemic, the last mile of the supply chain often flows through a nearby physical retail location. The presence of a physical retailer with inventories in stock is the backbone of how this model works. Because of this, the lines between online and physical retail have been further blurred. Today’s consumer is focused on safety and convenience, not whether they are shopping online or off, so the pandemic is only underscoring the notion that the omnichannel retail experience needs to be seamless.
Buy online pickup in-store moves to the curb
Several states established to-go retail as a means to keep retailers operating during the pandemic while restricting the public from entering the stores. In other words, buy online and pick up in store. Except, the in-store has shifted to an employee meeting you at the curb. While some stores like Best Buy, Kohl’s, Ace Hardware, and Michael’s, are leaning hard into their already established buy online pickup in-store (BOPIS) capabilities, others like Five Below raced to get their digital shopping experience up to speed. Retail is always innovative, and Five Below is allowing shoppers to call in orders to be picked up curbside in states that have opened up the to-go retail option. To make customers feel even safer, many stores like CVS/pharmacy, Kmart, and Office Depot, are keeping their curbside pickup going for the foreseeable future
Big box retail, no longer the villain, emerges as a community hero as consumers prioritize one-stop shopping
Big box retail is often blamed for the demise of the mom-and-pop store, can be typecast as having nothing unique, and can be caught in the midst of negative politics within a community. But when stay-at-home orders came into play, we all did our best to limit trips out for essentials. What was the best way to do that? To visit a big box retailer such as Walmart, Target, and grocers such as Publix, Kroger, and ALDI. With their strong supply chains and one-stop shopping, they are playing a crucial role in keeping our pantries filled and our necessities stocked in the safest manner possible.
“Big box retailers, like Target, are able to keep us in somewhat of a sense of normalcy when things all around us are anything but normal,” said Karla Smith, senior vice president and principal in the Dallas/Ft. Worth office. “There is something comforting when the big box stores recognize the arrival of a new season, an upcoming holiday, or cultural events. It proves how much these retailers go beyond keeping us going, but recognize that life beyond our daily needs is still going on as well.”
Communities will return the favor and lift up retail
One thing we know for sure is that retail has emerged from tumultuous times before and is well underway in doing so again. What will be different this time around is the desire for retailers and restaurants to succeed coming from the community, and not just the retailer themselves. In America in particular, telling people that they can’t do something often brings about an even bigger desire to do it. So when the entire population was told they cannot shop, dine out, or visit their favorite entertainment spot with friends, it’s the first place they are going as states loosen restrictions.
SRS knows that retail, both big and small, is critical to the community. If you are a tenant, landlord, or investor navigating the effects of COVID-19 and need a partner for real estate strategy and solutions, please reach out to Steve Dawkins.