Eight months into the pandemic, COVID-19 continues to bring extreme uncertainty to the retail sector. On the one hand, case counts are higher than ever and continue to rise. On the other hand, promising trial results indicate a vaccine may be on the horizon.
Defining the “New Normal”
It’s clear that the post-pandemic world won’t simply be a return to February of 2020. Instead, retailers want to know when there will be a “new normal” in place. What does that mean exactly? In short, it means the market will be more reliable.
We’ll know we’ve hit “new normal” when retailers understand consumers’ shopping preferences and habits enough to forecast demand as well as they could before COVID-19.
So, when will retail stabilize enough to make accurate predictions about consumer demand? To answer that question, Sophelle surveyed 1,000 of the best and brightest in the retail industry.
Sophelle’s Retail Survey
Sophelle’s survey collected feedback from retailers and retail solutions providers, with positions ranging from analyst to CEO.
Retailers were from all retail segments (apparel, grocery, home, specialty) and all price tiers (off-price through high-end luxury brands). Survey participants represented brands with brick and mortar stores, digital natives, and omnichannel companies.
Retail solution providers included software, hardware, and services.
The survey provides key insights into retail’s expectations for stability within the industry.
Summary of Survey Results
- Nearly 60% of respondents anticipate a predictable market in Q3 or Q4 of 2021, with 40% of people assuming normalcy between July and September.
- Retailers in segments that are faring better, such as home and grocery, had a more optimistic outlook expecting “new normal” to settle in sooner than individuals in other segments.
- On the whole, retail solution providers reported “new normal” as farther away than retailers themselves.
- Executives have a more skeptical outlook than other respondents; most executives believe that the “new normal” will arrive in Q4 of 2021 or in 2022.
- Based on additional comments in the survey, nearly all respondents expressed a lack of confidence in their answers.
Interestingly, retailers’ expectations were minimally affected by current events. Survey participants responded over a 10-day period, between 11/2 and 11/11. During that time, the presidential election results came in and Pfizer announced a successful vaccine trial. However, survey responses were consistent before and after those events.
It will take time and big, sustained changes for expectations to shift significantly. Here’s our analysis of those expectations as well as some recommendations for the retail industry:
- The “new normal” is likely at least two quarters away. The ability to confidently forecast won’t return until 6+ months from now. Sophelle recommends that all retailers and retail solution providers plan for an extended period of uncertainty.
- Different segments of retail may stabilize at different times. Segments that have been more severely disrupted by the pandemic will likely take longer to fully recover. Retailers need to be ready to react to changes quickly. Sophelle recommends developing organizational agility.
- Retailers will see a “new normal” before retail solution providers will. This lag for solution providers makes sense because their products and services need to respond to the still-evolving needs of retailers. Sophelle recommends that solution providers pay close attention to individual retail segments to spot trends and react to segment opportunities.
While these predictions aren’t a guarantee, there’s a clear consensus that a “new normal” is still months away. Retailers would be wise to plan on another 12 months of unpredictable demand, and retail solution providers may want to plan for an even longer period of instability.
If you need help planning for the future or developing agility within your organization, Sophelle can help. Reach out to learn more about our retail consultancy services.