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Revamping Retail: Coronavirus and Retail’s Future
The Case for Hope Times of crisis tend to shine a light on vulnerable aspects of your business. The same is true for ...
The Case for Hope
Times of crisis tend to shine a light on vulnerable aspects of your business. The same is true for coronavirus or COVID-19 and the disruptive effect it’s had on our global economy. While all manner of people and industry are affected by the effort to lessen the impact of coronavirus, retail may be officially approaching what they’ve predicted all along: apocalypse. But is it, really?
It may not feel so now, but we will recover. And it will be even more important to seize the opportunity to optimize your business for longevity and sustainability. Here are some things we’re hopeful for when the coronavirus eventually releases its grip on public consciousness:
The Digital and Data-Driven Revolution We’ve All Been Waiting For?
The measures that have been taken to curb the spread of coronavirus have been majorly disruptive to business as usual. Now is the time for retailers to rethink processes and incorporate technology that enables the automation of manual tasks and shortens lead time. Recent studies also show that retailers have been lagging when it comes to prioritizing data-driven cultures in their enterprises. This crisis may finally be the wake up call the industry needs: Retailers should rely on data analytics to make decisions to ensure positive business outcomes and avoid costly errors.
This is also a time to consider pivoting to meet the changing needs of the consumer. In the past, times of great uncertainty for retailers have given birth to the need for extended technologies: Prior to 2003’s SARS outbreak, only 6% of the Chinese population had access to the internet. But, as Chinese consumers transitioned most of their purchasing online, JD, Alibaba, and the birth of WeChat helped propel China to one of the world’s largest consumer economies.
Strengthened and Sustainable Supply Chains
According to Supply Chain Management Review, “the sustainability of supply chains depends on how supply chain management simultaneously considers profit, people, and planet.” Our global economy has made supply chains long, complex, and opaque. Because of this, it has been easy to place temporary solutions over deeper problems, rather than identify the root causes. However, times of stress provide an opportunity for us to perform risk assessments and put in place the technology needed to anticipate changes in demand and supply, leading to a decrease in wasteful production and less returned product in landfills.
According to EY, to build resilient and sustainable supply chains, the industry should encourage supply chains that are nimble and networked. Comprehensive, real-time visibility and contingency plans are a must for supply chains of the future.
In times of crisis, businesses must shift from profitability to survival mode. The last several years of retail have been particularly focused on growth and top-line revenue. But we’ve learned that if retailers focus too much on sales and not enough on managing spending and operating efficiently, times of risk (like now) may bring them to reckoning.
Adapting to New Consumer Behaviors and Expectations
The post-pandemic retail industry will need to cope with decreased consumer spending, along with other significant changes in consumer behavior. Through the pandemic, shoppers will move most of their purchases online and will become more accustomed to offerings like curbside pickup and contactless delivery. Could this be the time where online grocery becomes the norm? It remains to be seen.
Our own clients are seeing increased demand for products that are outside the norm for their top sellers—for example, one office supply retailer has been witnessing a spike in online orders for cleaning and food products, as customers are facing supply shortages with Amazon and Walmart. Discretionary retail will take a back seat to immediate needs for a while, and those that have data analytics tools that predict changes in demand will come out ahead. Now is the time to plan strategically for these behavior changes and optimize online and mobile experiences and consider flexible fulfillment options that allay the fears of customers with increased germaphobia, such as pickup in store via lockbox or return via lockbox.
In the throes of a complex global crisis, where retailers are forced to close and furlough hundreds of thousands of employees, it can be hard to see the light at the end of the tunnel. Many businesses won’t recover. Some beloved brands may need to be rebuilt. But we’re optimistic that the industry will, as it has time and time again, bounce back. Periods of great distress are often the most transformative.