Remote work is rough on big retail districts
The shift to remote working due to the novel coronavirus pandemic, while convenient for those employees who do not like commuting, has shrunk foot traffic in some business districts to a fraction of what it was pre-pandemic. This is having an especially significant impact in New York City where some retailers, once dependent on working commuters, are wondering how to keep their doors open.
Retailers in Midtown and the Financial District in Manhattan are still waiting for a rebound despite the overall improvement of the national economy, according to a New York Times article. A Midtown alcohol retailer tells of offices once buying crates of alcohol for Friday office happy hours, business that has completely dried up since the pandemic. Retailers in train terminals complain of huge drop-offs in business due to a lack of daily commuters.
Friday afternoons in such areas are often as quiet as Sundays, with few customers visiting once crowded drop-in retailers like Starbucks. Some retailers have changed their business models slightly to address the consumer shift. A Union Square men’s apparel retailer, for instance, has moved suits to the back of the store and put casual apparel, like hooded sweatshirts and t-shirts, up front.
Throughout the U.S., major businesses have announced reductions in office space in anticipation of a post-pandemic world in which a significant portion of the workforce may remain working from home part or all of the time. Nordstrom, Old Navy, Ralph Lauren, CVS Health and Target have all announced plans to cut down on corporate office space.
As the U.S. has taken steps to bring the pandemic under control, though, there has been a move by some businesses to try to get workers back into offices.
LVMH announced in February that Tiffany’s staff was to return to the office two days a week beginning in March. LVMH acquired the jeweler in January.
Other companies are being more flexible, while still envisioning a return to the office. The parent company of QVC and HSN announced it wanted corporate workers back in offices, but adjusted the deadline from May to September based on the U.S. vaccine rollout.
- ‘We’re Suffering’: How Remote Work Is Killing Manhattan’s Storefronts – New York Times
- How much HQ space will disappear as hybrid work becomes a retailing thing? – RetailWire
- Should retailers ask workers to return to their offices? – RetailWire
DISCUSSION QUESTIONS: Do you see particular retail districts in major cities significantly changing due to remote work trends? What do you think retailers in areas that have taken hits in foot traffic due to remote work can do to recapture lost sales?