Excerpt from roundtable during Tango’s virtual retail summit The Next Normal for Retail Location Strategy on May 19, 2020.
Accelerated Omnichannel in a COVID-19 World
Pranav Tyagi – President & CEO, Tango:
“Obviously this last slide that you have up there, Bart, tells you a lot about the omnichannel impacts of this long term. I know you talked about the US and a couple of markets, but if you look at that slide and look at India, the impact is dramatic in almost every sector of retail. So, this crisis obviously is forcing customers and retailers into other channels besides in-store. Think about it, before this crisis, nine of every $10 in retail came from traditional Brick-And-Mortar. Now, for a period of time, that channel was nonexistent except for the nonessential sectors of the retail industry.
“It would be interesting to understand how this is going to behave, but we can look at the data point. China as you know entered and exited this pandemic well before the US, and data emerging from China indicates that the behavior of customers has changed, so this was no longer just a theory. I mean, this has happened in reality, and we can look at the Chinese example where there’s almost like a permanent shift in certain areas. So, does it impact location strategy? Absolutely, store location strategy will have to adapt. I think I said this earlier, from primarily a pull strategy where you look to drop customers into a store from a trade area to a pull and push strategy that is inclusive of pick-up, delivery and returns, not just in-store shopping.
“I think I’ve mentioned this in my keynote as well. Several retailers have gone through a digital transformation to basically drive an omnichannel approach to their brick-and-mortar footprint, examples of that are Target and Panera Bread. I think this is going to be a wider impact going forward. The market optimization problem that people are wrestling with in retail for a long time, it’s going to shift from a market share analysis to an omnichannel coverage analysis. These changes, as we look at the market, are no longer just thinking about where to put a store, it’s what kind of store and what to put inside the store – so you’ll see a lot of remodeling of stores as well. Clearly omnichannel is going to have a huge impact on location strategy, not just where to put new stores, but what to do with the existing ones.”
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