The headlines are nearly unanimous; the retail apocalypse is upon us. No doubt COVID-19 has rendered many of the assumptions that powered our retail business models irrelevant. But it’s also thrown some new ones on the table, and has forced the industry — brands, retailers, suppliers, distributors, logistics providers, and consumers — to reconsider what it means to make, sell, and buy products and services in this pandemic world.
It’s hardly doom and gloom, however. In fact, this crisis comes with a big silver lining: the opportunity for retail leaders to make the changes that need to happen in every part of their business. To address this opportunity we have created the “Retail Pandemic Playbook,” outlining the big emerging themes and how to proactively handle them.
Customers Are Changing
Economic uncertainty in the midst of the greatest depression in 300 years is making consumers evaluate carefully what they really need. People are investing more in businesses that reflect their values. Consumers want a human connection with brands now, not a recorded message telling them to check a website for more information. A day out shopping is a different experience now that safety is an important consideration, too.
Trends Are Accelerating
Ecommerce is now a preferred way to shop — for convenience, safety, and choice. At the same time, the sense that we have hit “peak stuff” is growing, with consumers buying less but buying better and supporting local brands. Creating a product and experience that is truly unique has never been more important. Many of these trends are here to stay and offer opportunities for agile retailers to leapfrog their competitors by radically changing their business model.
Robust Tech Is Table Stakes
Investing in agile technology infrastructure has been painful for many traditional retailers. It’s expensive and easy to get wrong. The truth is, solutions need to consider the entire user journey and seamlessly join all channels — and the internal teams need to have the skills to make it happen. In this new world, every board of directors needs to prioritize native digital experience.
Flexibility Comes First
Companies are having to take a hard look at what functions are essential to their survival and select team members who can go beyond their own job description. A flexible mindset and the ability to pivot quickly in response to changing circumstances will determine success and survival.
5 Key Success Factors for Post-COVID Retail
We’ve all learned that dependency on one geography or single point of failure can bring down the whole supply chain and that demand for a current offer can evaporate overnight. Supply chains need to be more localized and diverse, warehouses enabled for social distancing, and store leases flexible to make it easier to open and close quickly. The culture needs to encourage and reward agility.
Be Technically Robust
Customers are more comfortable than ever shopping online, for a purpose rather than just to browse. Fear of infection has decreased dwell time in-store. Now, online channels need to be able to handle dramatic spikes in demand. Brands need to ensure a seamless omnichannel proposition with multiple delivery options, curbside pickup, fulfilment from any source, and broader payment options including contactless transactions. Some retailers are experimenting with online consultations as well as virtual-reality and augmented-reality solutions.
COVID has put brand accountability in focus. Remember how Amazon treated their employees at the start of all this? Brands need to build transparency and accountability by clearly communicating values and focusing on strong community engagement.
Be Safe and Trusted
Hygiene processes need to be clearly signposted throughout the value chain, from warehouses to store floors to front doors. Physical distancing needs to be visibly observed and enforced. And organizations need to ensure fair treatment of diverse community groups, e.g., with hours dedicated to vulnerable groups.
Customers are becoming more ethically aware, and Generation Z spends its money where it makes a difference. This pandemic has demonstrated that there are viable alternatives to long-distance travel, commuting, and pollution. Brands need to invest hearts and money into having less plastic packaging, more recycled materials, Fair Trade and/or organic certifications, and local sourcing involving fewer food miles.
10 Steps to Start Playing Offense Instead of Defense
- Plan multiple scenarios. We had lockdown no. 1. Now, in many places, lockdown no. 2 is here or approaching.
- Hire smarter and pay more for employees who are flexible and can quickly adapt their skills.
- Assess your in-house skill set and tech infrastructure, then fill the gaps quickly.
- Make tech a priority investment.
- Define and communicate your values to everyone: consumers, suppliers, employees, and shareholders.
- Ensure those values are upheld.
- Email your customers about the hygiene processes you have put in place.
- Make sure those processes are operational on the ground.
- Review your supply chain and identify sustainable substitutes where possible.
- Where it’s not possible, invest in carbon offsets.
Now is not the time for incremental moves, or to take the “wait and see” approach. Frankly, anything less than a radical rethink just won’t cut it.
Gabrielle (Dudnyk) Hase WG00 is CEO of Soleberry Advisory, a digital-commerce advisory firm that works with brands, retailers, and investors to maximize brand value and market share. She is a nonexecutive director for Tate Enterprises, Amplience, LS Retail, and Planks Clothing.
Caroline Cartellieri WG96 was most recently chief commercial officer of Ennismore, the company behind the Hoxton and Gleneagles hospitality brands. She has also held several senior executive roles, including director of digital transformation at glh Hotels, chief digital officer at Sun European Partners, and chief operating officer of MySpace International. Caroline is a nonexecutive director of EcoHydra Technologies and a governor of the Royal Brompton & Harefield NHS Foundation Trust.