Dave Cherry: what is the post-COVID retail industry? (Part 1)

By March 17, 2022 May 5th, 2022 Leadership
Dave Cherry speaking on the post-covid retail industry

The COVID-19 pandemic changed many aspects of our lives, especially how and what we buy. Because of existing customer behavior, the retail industry was forced to change overnight. We’re nearing the two year mark of the pandemic and seeing things go back to somewhat normal; should we expect customer behavior to change too? I sat down with Dave Cherry, Executive Advisor for Cherry Advisory and retail industry thought leader, to hear what he thinks the post-COVID retail industry looks like and what’s in store for customer behavior. 

Dave has worked in the retail industry for over 25 years with companies such as LBrands, Polo Ralph Lauren, Easton Town Center, Disney, Journeys and more. He helps clients define a customer experience strategy enabled by innovation and measured by analytics to drive deep relationships between company and customer and profitable growth.

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How would you describe the post-COVID retail industry?

“In addition to delivering on the primary consumer desires of service, quality value and convenience, retailers must now also meet expectations on social justice and health assuredness. Social justice doesn’t necessarily have a lot to do with COVID, but it happened at the same time. 

Right when the pandemic hit, we had the George Floyd incident, Black Lives Matter [movement] and a lot more visibility to what organizations are doing around sustainability, what they’re doing around female executives and other diversity initiatives. During this time, the social justice driver became just as important.”

 

What do you think retail should look like coming out of the pandemic?

“Retailers need to continue the rapid deployment of new capabilities without prolonged internal debate, as we saw with curbside pickup and livestream events and be bold in their experimentation around capabilities that can drive unique customer experiences – explore NFTs, the metaverse, personalization, and unique/memorable moments in time.”

 

Do you see cases where retail organizations get stuck in paralysis and analysis and miss an opportunity?

“Absolutely! I don’t necessarily see other industries as a whole being more progressive, but it is more around digital native and younger brands (e.g. Warby Parker) that are more nimble and open to innovation. That excludes of course folks like Amazon, Target, Walmart – huge retailers with massive capital that can spend freely and experiment.”

 

How will the “shop local” movement affect major companies in the retail industry?

“Here’s the first thing they need to evaluate: shop local is one of the trends that we see across the board in retail and my first piece of advice to every retailer is, do not follow a ‘me too’ strategy.

Early on in the digital age, a lot of brands had a ‘me too’ approach. Whatever they saw the industry leader do, they just immediately did it. So, when you’re thinking about shop local, the first thing is, what does it mean to my customer and is it relevant to them? And what does local mean? Does it mean a localized assortment? 

A good example of a local brand with a localized assortment is Homage. They’ve produced a lot of t-shirts around pop culture that’s ubiquitous across every community, but, being a Columbus-based brand, they had a huge Ohio State presence in their assortment. Then, they branched out and started doing Cleveland and Cincinnati. Then, they started doing a bit of Pittsburgh and a bit of Philadelphia. They’re signing deals with the NBA and NFL and going a little more national, but their assortment is very much localized Midwest.

Going further, localized could mean a small format. Nordstrom is putting small square footage stores in neighborhood strip malls. It’s a national assortment but, to Nordstrom, that’s localized. Or does it mean an experience that is unique to the community? 

There are also some downsides about being local, for example the higher importance on forecasting demand and ensuring in-stock levels. At the end of the day, it’s a big bet. You have to collect all the data that you can about it and use analytics to try to predict what will happen, but those analytics and those insights might be limited in which case you have to use your intuition and your experience. The other thing that people forget about is you really have to understand your risk posture.

For example, a company like Amazon spends tons of money to create a mobile store. If it fails, no big deal. If a brand, like Homage, and they did the same thing, they can’t afford that bet. You have to know who you are and what your risk posture is and figure out what shop local means to you.”

 

What type of data should retailers use to make these insights?

“It’s all about customer behavior. What a lot of customers don’t realize, we [retailers] often tracking their IP addresses so we know where they logged in from, whether it was mobile or another device. We know their dwell time. For example, if you’re walking around Easton Town Center, they know how long you’ve been at the mall, they know which stores you went to and in what order. Most customers don’t think about that information.

There’s also tremendous data enrichment opportunities. For example, if I simply had your email, there are services out there that track publicly available information. Everything from when you bought a home or when you got your driver’s license and the report will come back to me saying, ‘Sarah is a 21-26-year-old, she was born in Chicago and she lives in Columbus, she falls into a fashionista category and budget conscious Gen Z’. Suddenly, we have all of this information, so it’s important to leverage that but know what, of that consumer data, you are using to make decisions.

The last thing I want to emphasize is, the biggest advantage every brick and mortar retailer has over Amazon other direct-to-consumer websites is the store associate. I can have all the data about you from all your past shopping habits, but when you come into the store, you only have an hour to shop and you know exactly what you want, you want to be in-and-out quick. You’re looking for that convenience factor and even if all my data says, ‘Sarah loves white glove service,’ if I treat you more with service than convenience when you’re trying to be in-and-out quick, you’re going to be disappointed. The store associate is the most critical advantage. They can see you coming in and sense that you’re rushed. There’s no data out there that can help me in that moment, get the same type of emotional connection that I can get just from interacting with you on a human-to-human basis.”

 

From consumer behavior to small businesses to the advantages of brick and mortar stores, this is just the beginning of my insightful conversation with Dave Cherry. Fortunately, there are countless amounts of consumer behavior platforms to try. Next time, we’ll dive in deeper on the consumer behavior shift the retail industry has seen due to COVID-19 and if it will be permanent. Come back to hear more from industry thought leader, Dave Cherry, and his valuable insight into the post-COVID retail industry.

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