Retailers Ready to Adjust to Permanent Worker Shift

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Retailers Ready to Adjust to Permanent Worker Shift

By Mike Troy - 07/06/2020
In a world with millions of new employees working from home, retailers will need to examine every aspect of their operations as shopping patterns are forever altered.

Shoppers have learned a lot of new behaviors since March. From wearing masks in public and social distancing to ordering food online, working from home and rediscovering cooking, or simply learning how to cook.

Because so much is different about the way people live today, the question on every retailer’s mind is how we will live tomorrow. Which of our newly learned behaviors will stick, and become the new normal, and which of our pre-COVID-19 behaviors will we resort to once more effective treatments or a vaccine becomes available?

There are more questions than answers at the midpoint of 2020, but there is clarity around one huge driver of future behavior - the work from home phenomenon – where it is worth paying close attention.

In a recent Gallup survey, more than 63% of people had worked from home as of mid-April. When asked about their preferences for going back to offices the reaction was mixed. One fourth said they were ready to return and another fourth said they would prefer to work from home until concerns about COVID-19 subside. But half said they would prefer to continue working from home even if returning were an option. That’s significant. In another survey from the big office leasing firm Cushman and Wakefield, 73% of the workforce surveyed said their company should embrace some level of working from home.

And why not? After experiencing the flexibility and productivity boost that typically occurs when people begin working from home, along with avoidance of fuel and parking costs, who wants to go back to a soul-crushing commute on a crowded highway, bus, train, or subway? Remote work requires some adjustment for first-timers, and there can be some withdrawal from the camaraderie of an office environment at a company with good culture, but those sentiments tend to wane over time. Especially as virtual technologies improve and provide a workable substitute for face-to-face interaction. Even those with pre-COVID-19 short commutes to nice offices can appreciate the advantages of working from home, even if only occasionally.

The reason all of this matters to retailers is because pre-pandemic many people were defined by their commute. It was reflected in lifestyle choices of where and when to shop, whether to eat out, cook at home or order something for pick-up. Anticipated commute times had to be factored into all sorts of decisions such as the start and end times of meetings or the optimal time to drive to and from an office based on congestion.

Over decades, these rhythms became normal and shaped shopping patterns, merchandising and marketing strategies, store staffing levels and even supply chain decisions so truck routes could be timed to avoid peak congestion. Commuting patterns also affected the desirability of store locations based on morning and evening traffic patterns. All of these factors, and plenty of others, are impacted when a massive group of people stops doing one thing in favor of something completely different.

Retailers’ strategies will need to adjust because what worked in a world where people trudge to and from work in the morning and evening won’t work in a nation experiencing a massive structural shift in where works gets done.

If there is one qualification to this thesis it is that effects on retailers will be proportional to how much of the workforce stays at home post-pandemic, or works a blended schedule with occasional trips to the office. A major shift will happen, it just comes down to the degree. This is a key area to watch in the next 12 to 18 months because how the future of work ultimately shakes out will have a huge impact on the future of retail.

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