The really interesting question to me is how much of the acceleration in online sales will stick once COVID-19 is no longer keeping shoppers out of stores. Will we see a Renaissance in brick-and-mortar retail that claws back much of the shift to online? Or will consumers be unwilling to give back the saved time that they'd become accustomed to spending on other endeavors?
The measure of success for Walmart+ should not be whether it compels consumers to ditch Prime - that is an unreasonable goal, given the breadth of perks that come with Prime. The more interesting dynamic will be the impact of this program, if it gains widespread adoption, on grocery competitors such as Kroger.
To answer the question of whether COVID-19 will change consumers' behavior in the long run will depend heavily on how the course of the pandemic plays out. If COVID disappeared as a threat by Fall or Winter, I think that consumers would pretty quickly bounce back to old behaviors (as evidenced by crowded bars of unmasked revelers in states that allowed it). Habits developed during the Great Depression and during WW2 had roughly 20 years to take shape, while we are less than half a year into the COVID era.
Large grocery store chains do a uniquely good job of tracking customer behavior across channels, tethered by loyalty programs with high participation rates. This manifests itself far more effectively in the online environment than in stores because stores struggle to deliver the tailored experiences that websites and apps can offer. The biggest opportunity for grocers is to more effectively use digital tools to influence the store shopping experience.
The intent of Microsoft's stores was likely more about showcasing than selling products. Microsoft can compensate for this loss of product showcase opportuntities with smart arrangements with retailers. For example, perhaps we'll see a very nice section of Best Buy stores designed and managed by Microsoft - similar to the Sephora/J.C. Penney model.
J.C. Penney should follow Gap's lead by seeking to come out of the coronavirus pandemic a different, more relevant company. Its goal should absolutely NOT be to come back a leaner version of what it was beforehand. Its model simply doesn't work anymore, whether they have 800 stores or 300 stores.
During lockdown, I can see Pepsi's DTC efforts bearing fruit, which MAY lead to some stickiness. Generally, though, wholesale will continue to be the vehicle for 99.999 percent of Pepsi's sales, I believe.
This is a good move by Gap - the third big re-invention of its model. All of the great retailers in American history have reinvented themselves at least once as times and circumstances have changed. If Gap can pull this off successfully, it would be a terrific retail story. I'm rooting for them!
This is a smart move from Google. Amazon is where consumers are now most likely to start commerce-related searches and Google needs to pull out all the stops to change that behavior. Increasing the supply of merchants and products is a critical step.
Off-pricers have a set of very important choices ahead. How much cash needs to be set aside to keep them resilient, while taking advantage of inventory opportunities? At today's low interest rates, I'll bet that debt becomes an important tool. One thing is certain for off-pricers. The CFO is officially the most important employee in the company.
We seem to be in the midst of an accelerated Darwinian moment. Many retailers of non-essentials with weak balance sheets are not going to survive COVID-19. When we come out of our quarantines in a month or so, though, we will see unprecedented levels of consumer demand, I believe. Those retailers that were able to hold on are going to be in great shape, with significant pent-up consumer demand and less competition than before.
This was a good move on Costco's part. Led by Amazon, we are seeing many other retailers bring delivery in-house via acquisition (Target/Shipt, H.E.B./Favor). Many others, I believe, will build out their own delivery networks rather than acquire. This is undoubtedly driven by a desire for control and differentiation.
This is similar to another initiative on behalf of independent booksellers from 20 or so years ago. Booksellers shouldn't expect that it is going to make a material impact, but I can't think of a reason to not participate. If nothing else, it offers an opportunity to make some money on books that they don't have in stock. Today and forever, though, the key to successful independent bookselling is the store experience. I'm blessed to live near one of the best in Madison, Connecticut - RJ Julia, which is always a pleasure to shop. Awareness of price flies out the window as its comfortable environment and passionate, friendly, knowledgeable staff entice one to stay longer and buy more.
This is exactly the same issue that regulators are wrestling with on the media side: Are tech platforms responsible for what happens on their platforms? Media companies have protection from Section 230 of the 1996 Communications Decency Act - at least for now, but we have generally presumed that this concept extends to commerce as well. Clearly, on both fronts, the government needs to play a more active role regulating these media and commerce platforms. Is Congress equipped to do this properly, though, with a membership that can be charitably characterized as tech non-savvy? Will the fix (and its unintended consequences) be more damaging than the problem? I'm not optimistic.
Scaling local experiences seems to me to be an oxymoronic concept. A more constructive way to think about this opportunity, which is scalable, is to empower local store management. Hire strong, creative managers that are from their local markets, listen to what they suggest, give them money to spend against the opportunity, let them share in the rewards when it works, and tolerate some mistakes in the spirit of learning.