Post-Pandemic Shopping
In the second of a three-part series on the effects of the pandemic on how Minnesotans live, work, shop, and learn, the director of the Minnesota Design Center examines retail trends accelerated by COVID-19
By Thomas Fisher, Assoc. AIA | May 20, 2021
A rendering of the food hall entry at the Dayton’s Project in downtown Minneapolis. Image: ©601w Companies/Telos Group/United Properties/Design by Gensler.
FEATURE
Pandemics often lead to a transformation in how we access goods. After the 19th-century cholera pandemic, large department stores and downtown specialty shops emerged to meet the needs of growing urban populations, while after the 20th-century flu pandemic, shopping centers appeared to serve increasing numbers of suburbanites. A similar change has begun in the wake of the COVID-19 pandemic, as the digital and physical environments now compete for shoppers. While e-commerce overall did not increase much during the pandemic, in part because of dramatic declines in travel-related purchases, the online purchase of many goods soared: Medical supplies went up 500 percent, baby products up 400 percent, and groceries up 150 percent.
Meanwhile, many bricks-and-mortar stores struggled. A UBS study indicates that the retail sector may lose 11 to 17 percent of stores by 2025, with 100,000 to 150,000 stores closing in the next five years, a long-term trend accelerated by the pandemic. The pandemic also revealed inefficiencies as well as inequities in the retail world. The U.S., for example, has 8.5 billion square feet of retail space, or 24.5 square feet per person—five times that of Europe—but less-affluent and more-remote communities are retail deserts. With e-commerce firmly established—one study showed 81 percent of those surveyed plan to continue to grocery shop online—a decline in the amount of retail space in the U.S. seems inevitable. At the same time, the rise of on-demand delivery has increased access to goods for many who live in neighborhoods with few stores.
The decline in retail space will create challenges not just for the companies that have been forced to change their business model from mainly bricks-and-mortar retailing to e-commerce but also for the municipalities that depend on taxes from commercial property for a sizable part of their budgets, as well as for the designers, developers, and owners of retail buildings. Many cities have subsidized commercial property, whether directly through tax incentives or indirectly by upgrading infrastructure to serve retail developments, and that practice clearly cannot continue. Instead, cities will need to adopt more flexible zoning policies, relaxing single-use land uses and expensive parking requirements, and be more open to mixed-use developments that can accommodate whatever combination of activities the market needs, in whatever ways people need to live and work in response to an increasingly digital economy.
Hybrid retailing has emerged as a post-pandemic trend. Target, for instance, did well during the pandemic because it turned its stores into distribution and same-day pickup locations “within 10 miles of most Americans,” as Target’s CEO Brian Cornell observed.
The architecture and design community will play an important role in reimagining bricks-and-mortar retail. At the urban scale, mixed-use walkable communities had already been taking market share from car-oriented commercial development prior to 2020. The pandemic will likely advance that trend, not only because of the flexibility that a combination of uses allows but also because walkable communities typically have higher densities and more people able to secure goods faster by walking to the store rather than waiting for on-demand delivery.
Meanwhile, at the scale of individual stores, retailers will need to offer what people cannot get online: human interaction, serendipitous encounters, and immersive experiences. Some experts point to IKEA and Barnes & Noble as pre-pandemic models of experiential retail, offering gathering spaces, food and beverages, and even children’s play areas that encourage people to make the store itself a destination. Physical stores have also begun to mimic digital sites. For example, the giant online retailer Amazon has reimagined bookstores as physical parallels of its online experience, focusing not on stocking a large number of books but on displaying related books based on a reader’s interest, as it does on its website, which leads to more in-store and online purchases.
Hybrid retailing has emerged as a post-pandemic trend. Target, for instance, did well during the pandemic because it turned its bricks-and-mortar stores into distribution and same-day pickup locations “within 10 miles of most Americans,” as Target’s CEO Brian Cornell observed. At the Minnesota Design Center, we have been exploring what hybrid retailing might look like in the post-pandemic future, with stores that offer not just in-store shopping but also drive-through pickup and delivery options, along with mobile pop-up stores and the equivalent of food trucks for other types of goods that bring experiences as well as products to where people live. We have also examined how empty retail spaces and their adjoining parking lots might accommodate a wide range of other functions and services, including maker spaces, coworking destinations, recreational activities, childcare facilities, and hydroponic agriculture.
In-person shopping in bricks-and-mortar stores will continue: Even during the pandemic, e-commerce in the U.S. accounted for only 21.3 percent of all retail sales. But the greater choice we will have in the post-pandemic world related to how we access goods and services will force store owners and designers to compete for shoppers. Retail has long been at the forefront of the “experience economy,” and this pandemic has simply raised the temperature—as pandemics do.
The articles in this series by Thomas Fisher, Assoc. AIA, a professor in the School of Architecture and director of the Minnesota Design Center (MDC) at the University of Minnesota, are based on research the MDC has done this past year on pandemic impacts on how Minnesotans live, work, shop, and learn. Funded by the McKnight Foundation, the research has been the focus of a series of community workshops, a Grand Challenge course, a U College of Design webinar series, a pandemic-year blog, and a podcast series. Fisher is also writing a book on this subject, which Routledge will publish in 2022. This work continues the 35-year history of the MDC, which is dedicated to improving the built environment and the systems that shape that environment in Minnesota and the Upper Midwest through the use of design as an empathetic, creative, and community-based process.
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