The harsh lessons learned during the coronavirus (COVID-19) may be exactly what will help retailers to survive — and thrive — post-pandemic.

Currently, retail chains industry-wide continue to shore up capital by reducing operating hours, temporarily closing stores, and furloughing employees, among other measures. In fact, there were almost 62,000 temporary store closures by major retailers in the United States as of March 27, according to Coresight Research. 

Despite the industry’s drastic business disruption and apparent financial crunch, retailers cannot sit on their laurels. Rather, they need to explore how landlord partnerships, store development opportunities and new safety measures will help them operate once the virus’ curve flattens out.

Here are a few ways these ideas could change retail operations going forward:

• Tenant-landlord partnerships will strengthen. Some industry experts predicted that 2019 and 2020 would be the years that would define the value of landlord and tenant partnerships. As mounting store closures continue to strain both retailers and property owners, these relationships will be paramount in weathering the COVID-19-induced storm.

“I always go back to ‘Negotiation 101.’When there is one loser and one winner, then no one really wins,” said Whitney Livingston, COO, Centennial Real Estate. 

“This is a retail renaissance not retail apocalypse,” she added. “For anyone to succeed, all parties need to move out of their comfort zones, and compromise and partner. Companies that are willing to innovate and think outside of the box will help the industry reset and thrive post-pandemic.”

• “Essential retail” will anchor retail centers. The reinvention of shopping malls is not a new concept. However, this transformation could get a boost from the pandemic — especially when it comes to filling anchor store spaces with “essential retailers.”

The true retail heroes of COVID-19 are supermarkets, drug store chains, home improvement brands and other retailers that sell groceries and “need-based products” related to the safety, sanitation and essential operation of residences. Despite a surge in online sales, in-store traffic across local grocery stores, discount retailers and other essential businesses has yet to wane. Store visits are also getting a boost from buy-online-pickup-in-store (BOPIS) services.

“Grocery and essential retailers need to repurpose their physical space for fulfillment, delivery and in-store pickup options,”  Rachel Elias Wein, founder and CEO of strategy and management consulting firm WeinPlus, said during the recent Coresight Research webinar, “Coresight Conversations: The Future of Real Estate.” 

“Due to shopper demand from COVID-19, retailers may be forced to do so sooner— making them an opportunity for shopping center operators,” she added. “Based on the steady — and high volume of — customer traffic essential businesses offer, retail centers were already considering these retailers as anchor store opportunities in late 2019. Due to the pandemic, those decisions will be made earlier.”

• Safety accommodations will become a store development priority. COVID-19 is shining a new spotlight on employee and customer safety. As a result, properties are exploring the addition of permanent sanitizing stations at shopping center and retail tenants’ entrances and in food court kitchens; lowering shopper capacities within properties and food courts, and deploying technology that can monitor customer temperatures, according to Wein. 

Centennial Real Estate is already considering these and other opportunities to protect shoppers and employees across all of seven of its enclosed shopping centers. The two weeks before temporarily closing its retail centers for example, Centennial enforced new and more frequent preventative cleaning routines on elevators, escalators, and in food courts, among other areas.

New cleaning materials were adopted, and paper liners were draped on food court tables. Tables were also separated farther apart to help prevent any potential contamination, according to Livingston.

“There are a myriad of different things we are currently exploring. While some [ideas] seem a little ‘sci-fi’ right now, we need to consider different options, as well as discuss privacy impacts and the right way to implement these services,” Livingston explained. 

“COVID-19 will have significant impact on so many things, especially how we gather in large groups,” she added. “Malls are phenomenal gathering spaces to dine, play, shop, work and live. Now we need to figure out how to make everyone feel safe again.”

• Social distancing will push BOPIS to the curb. Customers are self-quarantined, and online order volume is soaring. A majority (93%) of consumers plan to shop online either more (60%) or at the same level (33%) as they did before the outbreak, according to “The Early Effects of COVID-19 On Online Shopping,” a new study of nearly 1,200 U.S. consumers from RSR Research and Yottaa.

However, social distancing is impacting the last mile of delivery. To support the safety of customers and employees, more retailers are embracing curbside pickup options. The option is becoming so popular that BOPIS orders (which includes curbside) have jumped 62% year-over-year between February 24 and March 21, according to the Adobe Digital Economy Index. As the option is increasingly adopted by more chains, it could easily become a fulfillment staple once the coronavirus curve flattens out. 

“The pandemic is a wake up call for retailers to deliver a new level of service and efficiency,” Wein said. “Consumer behavior is changing, and COVID-19 is forcing retail companies to innovate not just for today but for the customers of tomorrow, as well.”

Rachel Elias Wein

Rachel Elias Wein is CEO & Founder of WeinPlus. Focused on the impact of consumer change on commercial real estate, Rachel serves as the principal strategic advisor for industry-leading owners and operators of commercial real estate. Additionally, Rachel is an independent director for Alpine Income Property Trust (NYSE: PINE) a net-lease retail REIT.