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Post-COVID Retail Pain Points – What They Are and How to Overcome Them

August 13, 2021 Paula Floyd
August 13, 2021
Hitesh Dewasi via Unsplash

Post-COVID, the retail customer has returned to brick-and-mortar with a ferocious appetite. According to monthly in-store survey data by Headkount, eight out of 10 consumers are craving assisted services in-store, which means as many as 80% of consumers are willing to wait in line for a beauty educator to show them the latest and greatest. The other 20% of shoppers are replenishing their favorite products or browsing to see what’s new. This is encouraging news considering less than six months ago stores were severely limited with capacity restrictions.

Although this is promising for the future of brick-and-mortar, along with the quick comeback comes rebuilding retail, and oftentimes rebuilding comes with pain points. Post-COVID retail is no exception. Right now, the two most common pain points facing this comeback involve a lack of resources in both human (understaffed doors) and product (understocked stores) form.

Pain Point #1: Employees are not returning to retail as quickly as the consumer.

Sadly, the beauty industry employee was hit hard by COVID with massive layoffs and furloughs. Some are still happening today as brands try to reduce their overhead. So why are employees not bouncing back as quickly as the consumer?

Safety: Employees entering back into the service industry and working directly and closely with other people are continuing to question their safety, even with COVID protocols in place. Many remain concerned due to the continuing spread of COVID, the new
Delta variant, and whether they will bring it home to their elderly or vulnerable family members.

Rethinking Their Career: Many have taken advantage of this time to pause, explore other interests, and perhaps take a different career path. It’s advantageous for those who are thinking about changing their line of work because they can take a step back and collect unemployment while considering a new career.

Roles Have Changed: Now employees are expected to wear many hats even if they have been demoted with a huge reduction in pay and hours. In fact, 100% of the candidates Headkount interviewed say that they have been demoted and/or the reduced number of hours has forced them to leave the company that they have been working for, even after they’ve been loyal to that company for five years on average. It’s important to note, these aren’t people who jump around; these are great candidates who want a career in beauty.

Pain Point #2: Stores are understocked.

Not only do retail customers expect service, they also expect instant gratification, which means they want their product to be in stock. They don’t want to order online and wait for it to show up in the mail. After all, they got out of the house, drove to the store, and found a parking spot, all to be told, “We’re out of stock, but you can order online with free shipping.” This is not the consumer experience anyone thinks of as great. Last year, dotcom sales saved the day for many brands, representing a whopping +70% of total sales. In contrast, pre-COVID dotcom sales represented about 30% of sales on average.

While those numbers make sense considering the physical limitations in-store during COVID, perhaps the biggest surprise is how quickly brick-and-mortar is making its comeback. In January 2021, Headkount began to track sell-through for new product launches and hero SKUs, and on average those SKUs sold out in 14 days. This means there’s a huge sales opportunity and an unsatisfactory experience for the consumer in-store as it takes at least a month for a store to get replenished inventory. That’s at minimum a two-week gap of missed sales and unhappy consumers, and it’s happening on a regular basis.

How to Overcome These Obstacles:

With brands and retailers required to downsize and leaner inventory available post-COVID, what does the future of brick-and-mortar look like? The customer is not the same, the employee is not the same, and the demands from the employer are not the same. The future of brick-and-mortar will need to look like this for brands to thrive:

Employers first need to establish trust by opening a clear line of communication with their employees, then map out a career path and goals. Introduce robust onboarding and retention programs to show your employees that they are valued. Also, employ a larger part-time workforce to allow for more flexibility to ensure that the 80% of consumers who are eager for services receive the top-notch experience they desire.

Healthy inventory levels require clear communication with a retail partner. Be specific, prioritize, and focus on what really matters. Most often, it’s hero SKUs which represent the largest percentage of sales. Quantify the losses due to the lack of inventory and share data with retail partners. That should motivate them to work closely with brands to rectify the inventory issues.

Lastly, let’s agree that the consumer still comes first. They’ve been forced to shop online for the last year and are starved of human interaction, so it’s time to push more inventory, resources, and trained beauty educators into stores to give consumers what they deserve. WOW them and see them smile!

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