Nearly 50% of Americans are fully vaccinated. Customers are returning to physical stores, but how and what they purchase has changed significantly. Just as no one person will be the exact same after experiencing a global pandemic, purchasing behavior will be forever changed. Post-Covid purchasing behavior is a pendulum, swinging from extreme spending in different categories as restrictions are lifted.
But the extremes will level out once most of the population is vaccinated, and restrictions are a thing of the past. The pendulum will stop swinging at a frenetic pace and the siren song of highly connected, sustainable, and locally sourced micro retailers will be heard clearly in its wake. Let’s review some of the trends that are beginning to emerge in specialty retail and discuss how they will develop in the coming year.
Top Spending Categories Post-Pandemic
We’re being told to expect a modern version of the roaring 20’s. Consumers have stimulus money in their savings accounts and they’re ready to get out and live their lives while they still can. This is particularly true for vaccinated Boomers. Companies are already seeing a “Silver Surge” in Boomer spending in categories such as travel, cosmetics, and apparel. However, the same will presumably be true across generational divides as more young consumers get that second Pfizer/Moderna box checked on their vaccine card.
CNBC reports that sporting goods stores had the largest gain in March, jumping by 23.5%. Some were surprised by this since customers were active in their home gyms during the pandemic. But when you think about a population that was cooped up for over a year and can finally get out and make their fitness goals happen, it makes more sense why customers want products they can use out in the open air.
In keeping with the Roaring 20’s trope, CNBC found that clothing stores have already seen sales rise by 18.3%. A whopping 22% of high heeled shoes were sold out on retail websites. Skirts and swimsuits, in particular, saw huge jumps in consumer spend as customers indulge in summer travel fashions. Most hilariously of all: champagne sales surged by 103% over last year. Whip out those flapper costumes, ladies and gentlemen… we’re in for a heck of a ride.
Value-Based Shopping Feeds Micro-Retailers
Generalist e-commerce behemoths still reap the majority of consumer spend. Coronavirus lockdown, however, gave consumers the opportunity to take a long hard look at the impact of where they invest their almighty dollar. Many found that they wanted to invest in local businesses with values similar to their own. A whopping 79% of customers prefer to shop with brands with similar values.
Specialty and micro retailers had to get transparent about their need for community support to stay alive. And, beyond government grants that supported small businesses and micro-retailers, consumers consciously supported their favorite retailers in hopes of seeing them thrive when life resumed. Yes, some small businesses fell by the wayside during lockdown. But others found creative ways to thrive and were supported by their communities in new ways.
Shutdowns helped to build emotional investment in communities. Retailers sold gift cards to use after lockdown, made home deliveries, and opened their stores to VIPs for private shopping experiences. This created emotional bonds between retailer and consumer that won’t soon dissipate now that the world has resumed.
The Future of Specialized Retail
Specialty stores and strip malls fared better than traditional malls during the pandemic. Stalwart department store flagships were left shuttering stores, as customers turned to online behemoths for necessities and local retailers for everything else. The result was hundreds of empty mall locations. But there’s an opportunity for increased engagement in all of the chaos.
Micro retailers are stepping up to fill the gaps left by department stores in traditional shopping malls. Specialty retailers are able to connect with the community by featuring local artisans. They draw consumers to shopping malls by creating unique experiences, whether it’s by showcasing artists from a local school, creating in-store events like yoga or succulent planting, or just the one-on-one connection brand advocates are able to build with their local customer base.
The future of specialty retail is highly personalized, unique, and compelling. And specialty retail is the key to retaining store traffic in areas that would otherwise be left behind.
