While indoor shopping malls in New Jersey limped back to life at the end of June, the return of customers and a thriving fall shopping season still seems a long way off while coronavirus lingers. With strict guidelines including wearing face masks and limiting stores to 50% capacity, stiff challenges lie ahead for the brick and mortar retail sector. What remains to be seen is whether in-person shopping will ever rebound to pre-pandemic levels or if the migration to online retailing is here to stay.

Stores May Be Open But Social Distancing Remains in Effect

As stir-crazy shoppers trickle back into New Jersey shopping centers, reminders that Covid-19 has altered the indoor shopping experience seem to crop up every few feet. In addition to both customers and employees wearing masks, hand sanitizer stations abound and blue circles dot the floor to show everyone what six feet apart looks like.  Even the escalators have signs reminding people to maintain a three-stair distance from each other.

One of the most conspicuous changes brought about by the pandemic is the prevalence of socially-distanced lines outside stores. Since stores must limit their capacity, customers need to wait outside until they are below the limit. In addition, food courts remain closed with all common seating areas roped off. The big question for most retailers is whether the bulk of their customers will stay away from malls permanently in favor of safer, more convenient alternatives.

Covid-19 Widens Divide Between Retailers

Unfortunately, with nearly half of the fiscal year behind them, mall-based retailers have seen their earnings plunge 256%. In a sense, the coronavirus pandemic has merely widened the chasm between traditional retailers and those flexible enough to pivot to accommodate shoppers stuck at home for most of the year.

Walmart, Target and Home Depot, for example, blew away Wall Street sales estimates in August while many mall-based stores such as J. Crew and J.C. Penney recently filed for bankruptcy.

Surviving By Expanding Ecommerce Services

One of the ways that big box retailers have continued to thrive is by expanding their ecommerce services. For instance, many of them are using their stores as online fulfillment centers. By adopting contactless services like curbside pickup and delivery, they have been able to keep selling while so many other stores remained shut. As of this past August, 43.7% of the 245 retailers with stores ranked in the Digital Commerce 360 Top 500 offer curbside pickup, a significant jump from 6.9% at the end of 2019.

Safety Propels Consumers Towards Digital and Contactless Payments

Indeed, stores that already made big investments in their digital businesses have fared much better as customers could easily continue shopping with them online. Target, for example, added 10 million new digital customers during the first half of this year.

And other stores such as Lowe’s have revamped their websites to capitalize on the uptick in online business.  Online shoppers are also gravitating to ecommerce sites that offer secure online credit card processing in order to shield themselves from things like fraud and identity theft.

Covid-19 is not only changing the ways people shop but also how they choose to pay for things. As a result, more merchants are embracing contactless payment methods as a safer alternative for in-store payments.

Omnichannel Retailing Keys Long-term Survival

The main issue facing brick and mortar retailers is that many people are likely to remain home to avoid added risk even after coronavirus restrictions are loosened or fully lifted. For this reason, they will be more inclined to stick with online shopping in lieu of visiting stores. What separates the Amazons and the Wal-Marts of this world from the rest of the pack is their emphasis on omni-channel retailing; the secret to their success is a seamless integration between online and offline operations.

In other words, the businesses that will thrive in a post-coronavirus world are the ones flexible enough to provide a fully integrated approach to their customer base which reaches beyond physical locations to online marketplaces, mobile browsing and social media.