Retailers, wholesalers and online merchants are being forced to react to continually shifting regulatory, economic and consumer environments as a result of COVID-19. Decisions are being made that will affect the way that shopping is done in both the short and long term while potentially determining which companies survive. Making wise decisions means leveraging data, understanding your brand and trying to predict what happens next.
Decisions and Data
As restrictions surrounding retail are slowly loosened, retailers are faced with tough questions. Which stores should open first? Which should not open at all? Staffing and inventory decisions must be made with no clear picture of future conditions. Capital and liquidity will go a long way toward determining who can weather the storm, but so too will an ability to react to conditions as they emerge. Data will prove a valuable part of this process, writes Andy Halliwell for Essential Retail.
“During this period, being data-driven is key. Businesses equipped with a single view of inventory, store analytics and up-to-date information about customer digital buying behaviours will quickly be able to prioritise which stores to open and what stock is needed to support popular products.”1
Retail expert Keith Jelinek recommends a nimble strategy that involves assessing risk, implementing KPI and dashboard tracking and developing contingency plans while reacting and capitalizing on short term opportunities.2
Some of the most important decisions currently facing retailers relate to inventory and buying. Nobody knows exactly how quickly retail will rebound, but it’s certain that pre-COVID19 sales projections for 2020 will not be met and some seasonal or trend-centric inventory will need to be liquidated. Careful modelling will have to be conducted as companies decide what to do about excessive stockpiles of merchandise. Meanwhile, the heat is on to make buying decisions related to the all important holiday season, with no real way of knowing how the retail environment will look later this year.
The Hybrid Approach
For retailers, thriving, or merely surviving in this unprecedented situation may be a matter of striking the right balance between online and brick and mortar. E-commerce, already a quickly growing trend, has only gained steam since the COVID-19 shutdown.
“COVID-19 has acted as an accelerant to shifting consumer preferences and business models. People are using social media even more, shopping online in unprecedented numbers and seeking out purpose in their purchases. Retailers are responding with alternative delivery methods and more digital touchpoints across the shopping experience.”3
Many smaller retailers who had been slow to adapt have been forced to go digital. This could be something as simple as an e-mail based curbside delivery operation. For years, the line between retail and e-commerce has been blurring and, as retailers move from the lockdown phase to the gradual reopening of stores, this hybrid approach may help ease the transition.
“Propositions like curb-side pickup, click & collect, and ship from store will help businesses clearing large amounts of seasonal stock that’s been effectively trapped in closed stores, and these mechanisms will help significantly reduce the amount of time consumers spend in store to purchase goods.”1
Logistics Challenge or Branding Opportunity?
As shoppers return to retail locations, careful attention will be paid to their patterns and habits. For retailers, new regulations and consumer expectations will present both a logistical challenge and a branding opportunity.
Grocery and other retailers who were exempt from the shutdown have led the way with sanitization, signage and other social distancing efforts. Retail staff will have to get used to new layouts and protocols, as well as new duties such as picking and packing orders for curbside pickup. Plexiglass, touchless pay, and adherence to capacity limits will all present new challenges. Virtual queuing systems and analytics technologies will help progressive companies analyse store traffic to optimize their retail environment for safety, efficiency and comfort.
Branded shopping experiences may be a differentiator as well. Many grocery stores have instituted so-called ‘silver hours’ for seniors only. High-end retailers may see success with appointment bookings or VIP shopping events. The shopping experience has always been an important factor in consumer behaviour and retailers who can present an appealing environment to patrons may be rewarded.
Essential Retail sums up the challenge that will face retailers in the coming year.
“The next 12 months will call upon businesses to create a paradox of innovation in how they must be incredibly human-centric, yet over-invest in technology and data to ensure they are fit for the future. The role of the store has changed forever, and so using real-estate as a combination of a marketing platform, a sales vehicle, a loyalty reward and a micro-fulfilment centre will require a fundamental shift in company mindset.”1
1 Halliwell, Andy. “Covid-19: Re-Opening Retail: Strategies for Now, next and Future.” Essential Retail, May 11, 2020. https://www.essentialretail.com/comments/reopening-retail-now-next-future/.
2 Mottl, Judy. “Big Adapting Ahead for Retailers Striving to Succeed in Post-COVID-19.” www.retailcustomerexperience.com, May 5, 2020. https://www.retailcustomerexperience.com/articles/big-adapting-ahead-for-retailers-striving-to-succeed-in-post-covid-19/.
3 Barr, Steven. “COVID-19 Accelerates Change Already Afoot In Retail.” Forbes. Forbes Magazine, April 23, 2020. https://www.forbes.com/sites/stevenbarr/2020/04/23/covid-19-accelerates-change-already-afoot-in-retail/#6816c918a779.