Retail Rundown: COVID Update — Mask and Vaccine Mandates In Retail

Marie Driscoll:
Hello, retail rundown listeners. I’m Marie Driscoll, your host for the week. For those of you who may not know me, I’m a Managing Director of Luxury and Retail at Coresight Research. Joining me today are Bob Phibbs and Paula Rosenblum. Bob, also known as the Retail Doctor, is an internationally recognized business strategist, speaker, founder of SalesRX online retail sales training, and brick and mortar expert. Paula is the Managing Partner and Co-founder of Retail Systems Research and is widely recognized as a top retail influencer. Bob, Paula, thank you both for being here.

Bob Phibbs:
Hi everybody.

Paula Rosenblum:
Hello everybody.

Marie Driscoll:
Thank you for being here. Today’s topic is certainly one that has many of us talking. After a few months of lifting restrictions, retailers are now having to decide whether or not they will reinstate mask mandates for employees and customers as the Delta and Gamma variants continue to create hotspots throughout the country. Just as of last week, McDonald’s, Target, Home Depot and Kohl’s said that they will follow a CDC guidance and enforce masks for store workers in high-risk areas.

Marie Driscoll:
Disney will require masks for all customers and cast members. Apple said it’s also requiring both vaccinated and unvaccinated customers, as well as their staff members to wear masks in many of the US stores. This is just so really depressing. Let’s start here with masks. With the CDC’s updated guidelines now in place, why haven’t retailers jumped in on reissuing mask mandates for in-store shoppers. Bob, do you have an opinion?

Bob Phibbs:
I have a very big opinion. I’m sure about that. Who wants to get into this? Frontline workers were never hired to be mask police. What I think gets lost in this is, this is not about masks. This is about shots. Retailers need to get into the idea that vaccination is 100% not optional if you’re going to work there. I know that up at Saratoga Springs, just north of me in New York, the Downtown Association bought a mobile van down and had all of the employees be vaccinated.

Bob Phibbs:
Now, why did they do that? Because they’re a summer tourist town. They understand that if they don’t project this image, they’re going to be in trouble. I for one am not looking forward to seeing more TikTok and YouTube videos of people assaulting retailers over something that, again, is in place to help them. If they’re already vaccinated, it’s not going to protect those who are vaccinated, I don’t think.

Marie Driscoll:
Paula, what do you think?

Paula Rosenblum:
I think that for retailers, this is the best way to go about this because state-by-state is so inconsistent. I live in the epicenter of all of this down in Florida at the moment. And given that even within our state, the counties are inconsistent despite the governor’s threats that he won’t give funding if people put masks on, the simplest thing to do is for retailers to make a nationwide policy, period, full stop. Yeah, masks, I mean I hate them. There’s no doubt about it. I feel a certain amount, and we’ll get to this later, of anger around the number of people who haven’t been vaccinated because they’ve put us back in this situation, but I don’t see that there’s any choice. I think we have to do it because sooner or later somebody is going to sue somebody.

Marie Driscoll:
So a shopper or an employee?

Paula Rosenblum:
Both. Well, I mean I… Again, we’ll get to the vaccine part later. But for now, it’s got to be both for sure.

Marie Driscoll:
Yeah. I live in Manhattan and the thought of going back to wearing masks because so many in Manhattan, I think we have 70% vaccination, people with vaccines, so most of us are safe. I just see it further, there have been so many small businesses that have shut down and so many between retailers, the nail, the local nail and the manicurist, the hairdressers, the restaurants. There are whole blocks that have no tenants, and it’s all over the city. It’s not just in any particular neighborhood. And to go back to a shut down is frightening.

Bob Phibbs:
Well, I need to jump in here, Marie, because I’m really offended at the media right now. 150 million people were vaccinated. There’s been what? 100,000 people who have broke through. You would think everyone is going to die of this that we’re back in March. The media was fueled by the past president and all the stuff around there, and they don’t have that anymore, and how it is relentless how much people want to talk about this. I think it’s a very… I’m a progressive guy. Don’t get me wrong. I’m vaccinated. I believe in all of it. But I think there is this element of, I’m better than you.

Bob Phibbs:
I’m wearing a mask, and I’ve been vaccinated to take care of you that is being missed in this dialogue, that we… To say that it’s all these people who just won’t do it, the other side is just as guilty that it’s zero compliance. I don’t say that I have the answer, but this fear is what most concerns me, Marie and Paula, that we are going to go into the holiday season with these people who know that it will get clicks and it will get people. The CDC is going to keep changing their mind and that’s right, because new science comes out and all of this.

Bob Phibbs:
But if you look at the Provincetown story, it is not as clear-cut as what it was meant to be when somebody read it on Facebook. “Oh, did you see all those breakthroughs?” Well, that’s not really happened, but the writers who know the sensationalism is going to get it or are having a field day and they’re being paid for it. I know we shouldn’t say it’s the media, but sorry, I think this is only going to get worse because they know that they can do it.

Paula Rosenblum:
Well, there are two things I need to say. One is with regard to the empty stores in Manhattan. The part of the problem is that people are working from home, and somewhere along the line, people realize that working from home or living or being locked down in a 700-square foot apartment at $3,000 a month is not the best use of my time or energy. And so, people began moving here. They began moving. I was going to get a summer home up near Woodstock because I went to college up near there, and I really liked the area. I went to New Paltz, a New Paltz alumni, proud of it, by the way.

Bob Phibbs:
Nice, I’m an hour north of you, up the 87.

Paula Rosenblum:
There you go. But the housing prices have gone through the roof because people said, “I cannot do this. I want to be able to go for walks. I want to be able to exercise. I got to get out of that house.” I think that has contributed to the demise of all of these city stores. I did need to say that.

Maire Driscoll:
It’s partly that you’re right. It’s like there has been the diaspora away from Manhattan.

Paula Rosenblum: 
Yeah. No, that’s a real thing. That’s a real thing, and they’re all coming. A lot of them were coming here. If I told you my house is worth double what I paid for it, which is insane and it’s worth 25% more than it was four months ago. So that gives you an idea of what’s really going on down here. In terms of the media overblowing it, unfortunately this time I’m at the epicenter of it. We have more cases now per day than we had last year when there was no vaccine.

Paula Rosenblum:
Again, we have a situation where the governor wants to deny that it exists, and that’s a real problem. He’s getting lots of press, but I don’t think it’s what he hoped for. Another guy wants to run for president and he’s running on the, we’re free to do whatever we want thing and no masks. And by the way, we’ll defund you if you’re a school system and you require mask because that’s up to the parents. And so, we’re getting a lot of news because we’re outliers. We’re outliers to an extent where I, who have been vaccinated, unfortunately for over six months.

Paula Rosenblum:
I say unfortunately because there’s been talk about media noise. The media noise around the vaccines declining efficacy after six months has really unnerved me because I got my second shot on February 1st, so I’m way over the line. You can’t get a third one. I tried and they actually managed to get both recorded. I was going to go someplace else and try and get a third shot, but the truth is that I have to go visit somebody and carry my virus, the potential virus with me.

Paula Rosenblum:
The reason why there’s a lot of noise around it is that truth be told, the numbers here are higher than they were before the vaccine, and that’s insane and the great fear. I think it’s a legit fear, is that because of the skyrocketing number of new cases, new variants are going to emerge, and those variants will be vaccine resistant and then we’ll really be in trouble.

Bob Phibbs:
No, they may be, Paula. They won’t be. They may be. Let’s just be careful of that. The idea that retailers are going to be able to somehow make your state, make your governor do the job. Masks are not the answer. That’s my issue. If it was March, 2020, it would be one thing. We are nowhere near that, and yet this mask mandate coming down to the front line of saying, “You need to do it.” I was in an Apple store that had a mask a couple of months ago, and the guy was rude as hell, and I thought it was an incredibly bad experience.

Bob Phibbs:
The more fear and the more, oh, but what ifs, I’m just done with it. I’m just done. I think I speak for a lot of people.

Marie Driscoll:
Well, fear is no way to live your life. Good, healthy fear, it makes sense, but it can’t rule your life. What’s happening is we ask the questions, we don’t know the answers. And without having the answers, then we stick in fear and we don’t move forward. That’s not what business is about. Business is about assessing the environment, making projections, taking risks, taking risks that are within certain bounds and moving forward.

Marie Driscoll:
Well, let’s talk about vaccines. Here in New York, we will be requiring workers and customers to show proof that they’ve at least had one dose of the COVID 19 vaccine to participate in indoor dining and other activities like gyms and performances. As of today’s taping, Los Angeles lawmakers are also considering implementing a no shot no service vaccine mandate. On the retail side, Walmart said last week that it would require its corporate staff, as well as management-level employees to be vaccinated against COVID by October 4th.

Marie Driscoll:
There’s example after example. Tyson Foods wants 120,000 workers to be vaccinated by November 1st. At Microsoft, 100,000 people will be required to prove vaccines to prove that they’re vaccinated for the employees, their vendors, and guests to gain access to their offices. So what do you think about these vaccine mandates?

Paula Rosenblum:
I think they’re great. I think the problem is you have a month’s delay between when you get the first jab and when it kicks in strongly enough. But, yeah, I’m completely in favor of it because to Bob’s point, we don’t disagree as much as you think, Bob.

Bob Phibbs:
Oh, I know.

Paula Rosenblum:
Who the hell wants to be the mask police? By the way, if you think… I don’t know about what it’s like in New York. I suspect it’s similar to here. There are people who aren’t being paid enough and they just go, “I’m not making enough to do this job.” And so, the reason why I was arguing for mask mandates is to try and keep the workers in the store or in the restaurants, because there are people just saying, “You don’t pay me enough. I ain’t doing this.” Suddenly I’ve become a frontline worker, and you don’t treat me very well.

Bob Phibbs:
I would argue it’s just the opposite. I would say it’s just the opposite. Putting a mask mandate in place, you’re just itching for people to come in and have their little phones out and show how badly they can treat somebody. We’ve seen that in San Francisco. We’ve seen it in a lot of [crosstalk 00:22:08].

Paula Rosenblum:
Well, I agree. No, I don’t disagree with that. You’re putting them in the middle. No, I agree with you completely, which is that you’re putting these people who used to be transient workforce who are now frontline workers, you’re putting them in the middle of this terrible situation, and they will walk.

Bob Phibbs:
But that’s what you’re advocating.

Paula Rosenblum:
What? I’m advocating.

Bob Phibbs:
That they all have to wear a mask if you want to come into the store.

Paula Rosenblum:
When push comes to shove I’m advocating vaccine mandates, to be honest with you.

Bob Phibbs:
Yeah, we’re totally aligned.

Paula Rosenblum
There’s no doubt about it, but there are large swaths of communities here who are very, very vaccine-resistant. They really are.

Marie Driscoll:
There are some people that just resist. America has lots of people with lots of opinions, and they fervently cling to their ability to have their opinion in the face of evidence that would argue the other way.

Paula Rosenblum:
Yeah, but I don’t know how to fix that. I mean-

Bob Phibbs:
The way you fix it is what we’re talking about, which is, if you want to go to a sporting event, you want to go to a restaurant, you want to go in a mall, you’re going to have a proof vaccine and it’s going to have to be current and shown.

Paula Rosenblum: 
I have a governor who refuses to allow there to be proof of vaccine. The cruise ship companies had to take him to court.

Bob Phibbs:
Why aren’t mayors taking you guys to court? That’s what I don’t get. Why aren’t you guys rising up and saying, “This is potentially going to kill us.”? But the citizens don’t seem to mind.

Paula Rosenblum:
He’s holding the money.

Bob Phibbs:
But the legislators, they’re not doing their job. If that’s what you guys are willing to get away with, then all bets are off. New York lost 30,000 people. Manhattan, we take it a little differently in New York than down south. Maybe that’ll change some minds. I don’t know, but it’s not retail’s job to do this, and the stories about it are not helpful. We’re not getting through them.

Paula Rosenblum:
No, it’s retailer’s job to protect their workers though. That’s just the truth of it.

Bob Phibbs:
The only way to do that is to give them time off to get vaccinated. A mask will not protect them.

Marie Driscoll:
Let’s move on to what’s happening in retail and how this really impacts retail. This is a very… Retail has done incredibly well through COVID. Certainly in March, April, May of last year or very early stages, if you were essential retail, you did really well. If you were non-essential retail, you didn’t do well. But as the stores opened up, even though the stores may not have had the traffic and the traffic may still be trailing 2019 levels, there’s been incredible lifts in average ticket and average price in retail sales.

Marie Driscoll:
It’s just, I think it’s been amazing to see the resurgence, the resiliency, and of course there’s less to spend money on. We’re not traveling as much. We’re not eating out as much. But how do you see this new cloud of the Delta virus and what we’re hearing happening in China where they are shutting things down? Delta is spreading, I think, to 45 cities. Their cities are almost countries. So with that, what do you think that does to our back to school and holiday?

Bob Phibbs:
Yeah, but that’s a false equation, because China does not have vaccinations like we do, and there’s questions about what they did with their vaccination. That’s what bothers me about all these stories, is we hear something here and it’s not necessarily vetted. We connect the dots, and it’s like the whole thing is on fire. And it’s like, hold it, that’s not quite it. And that’s it. I think my clients are still up 20% over 2019. My clients are still waiting for the other foot to fall like, My God, what would stop it?

Bob Phibbs:
They are excited, and they are not having these discussions the pundits are having and turn the damn news off. We’re done with this. We are done with this. It’s 20 months in. We’re done with this.

Bob Phibbs:
I think there’s going to be a huge pushback about how these are impacting people. There will be a vocal minority who is going to go crazy and say, “We’ve all got locked down.” LA has been certainly very aggressive in what they have done with vaccination and masks in the past. But if we don’t get these fear stories to stop connecting and making it into a, oh my God, we’re all going to die tomorrow, I think it’s going to absolutely affect everything from the retail renaissance and back to school as well as holiday.

Paula Rosenblum:
Okay, so you guys are talking about retail in a context that isn’t complete. By that, I mean there’s an entire universe called the independent retailer that has been destroyed this last year. Yes, I know people who own stores that are in that situation themselves, more than one. Independent retailers and restaurant tours were destroyed. Yeah, Walmart did really well, and Target did really well, and [inaudible 00:30:10] did really well. I could list all of these large retailers that did very well.

Paula Rosenblum:
Small business got creed. Something has to happen to get people willing to go out because I do know and I’ve seen data that says consumers would really like to support independent retailers and locally made and sourced product and ethically sourced product, but they can’t because of this, you can call it fear. You can call it whatever you like. But the bottom line is the human toll has been huge. Now you can say it’s fear because it’s not last year. Some people are now vaccinated. Half of us are now vaccinated or some percentage are now vaccinated.

Paula Rosenblum:
It doesn’t change the fact that as Marie said way early in the call, there are tons of empty storefronts, and those empty storefronts had people that owned them. It was mostly not chains. It was mostly independent retailers, and something has to be done. This isn’t a joke. It’s sad. Quite honestly, what’s happened here the last several years culminating in the pandemic is tragic. I have no other word for it. It’s tragic, and it’s a tragedy of proportions like I have never seen in my lifetime.

Marie Driscoll:
It’s interesting the themes in retail about customization, personalization, localization. That’s all about… Like localization is” give me something that speaks to me and speaks to the neighborhood.” A lot of that’s done when all you have left are wonderful stores, wonderful brands, but brands that you can get online and that you can get in most big cities around the country, or most big towns and most malls around the country.

Paula Rosenblum:
Correct.

Marie Driscoll: 
And so, what made New York special is the local independent shops as well as the wonderful restaurants and the culture, and what makes… And it’s the same for Miami. People come to New York to shop in SoHo, and they go to Miami to shop in North Beach. There’s all of that, and those are the stores that closed.

Bob Phibbs:
Well, I would say this is all true, but a lot of those brick-and-mortar retailers were not good operators. They had bought themselves a job. If you look at Manhattan and those businesses that are gone, Marie, when you go down a lot of those streets, they hadn’t been invested in for an awfully long time. Yeah, there are some that were great, but they will be back. People will come back in new ways

Bob Phibbs:
It’s like saying Manhattan is not going to have skyscrapers full of people. Already we’re hearing that people are coming back to the cities, and rents are down, and the universities are open, etc. I think we’ve been around this horn a number of times. When it comes right down to it, either you believe that there’s hope or you believe that we’re stuck in the mud. I’m going to always go back to hope because retail has always been a game of hope. After 9/11, no one could imagine there would be a 9/12.

Bob Phibbs:
No one could imagine Manhattan would get through it. After the financial crisis of 2008, we were told ATM’s would not work. That was the worst possible thing that could happen. Now here we are 10 years later, oh my God, it’s the worst possible thing. We’re moving through it. In 10 years, there’ll be something else we’re not thinking about either.

Marie Driscoll: 
People haven’t changed that much, except over the course of the last year and a half. People have been more cowered by fear than they normally were, right? I know, I was three blocks away from when 9/11 happened. I know what it felt like to be frightened about going around New York city for those six weeks after that. I think that this has been a prolonged fear and isolation and just a different way of living. I think people are fed up with it, but it has… Some businesses have gone out because frankly, we don’t need them.

Marie Driscoll:
We’ve been eating at home. You didn’t need to go out and eat. We didn’t need the same kind of like the dry cleaner, the shoe repair people. There’s so many services that we don’t need, and it’s changing the face of New York. But retail is organic, and it reflects the culture. Retail will reflect locally what we need here and locally what you need in Miami and what you need up in [inaudible 00:38:41]. It always will do that. And to your point, Bob, retailers are by their nature, positive. They’re investing. They have a dream, an idea, and they try and bring it to the consumer. They try and make a little money on it.

Marie Driscoll:
There’s no right. There’s no wrong, but there is holiday. There is back to school. Here’s to double-digit growth. And a supply chain that’s actually functioning.

Bob Phibbs:
And everybody getting a vaccination.

Bob Phibbs:
We could all agree with that.

Marie Driscoll:
That would make 2022 so fabulous, right?