Traditional stores are doomed, says co-founder of PayPal

Shoppers will not return to stores and malls, so retailers will have to invent new ways to trade.

The rapid development of online shopping during the Coronavirus Pandemic will not be able to crowd out shopping in physical stores altogether. Still, it will completely change the way retailers organize themselves. Max Levchin, who is one of the co-founders of PayPal, shared his reflections on this issue with Business Insider.  

Some customers will not be in a hurry to return to the physical stores after they had been appreciated the convenience of online shopping. One of the approaches should be to reorient stores to the points of delivery of goods. At the same time, customers will select products and order them online and receive them already in the store. For many small networks, this approach requires significant investment, because, at the moment, their technological base is not ready for it. 

Another approach may be to use physical retail spaces more as showrooms for products, where customers choose to order it then online. This format does not require you to create stocks of goods and organize warehouses directly in the store. Examples of this approach already implemented include Apple stores.

Shoppers are unlikely to give up the pleasure of shopping altogether, but retailers' goal is to make the process as secure as possible by moving some of their procedures online. It may require a shift in priorities. Instead of investing in real estate, retailers, especially small market players, will need to consider investing in modern technology solutions. Without this, it will be complicated to manage inventory, orders, and returns.

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