Retail: Turning crisis into opportunity – Part 2
As we outlined in our first post in this series, speed and agility are they keys to overcoming the challenges of the COVID-19 pandemic in the short term. Retailers that can adapt quickly will avoid more serious long-term consequences, yet the solution for this situation is not a patchwork of quick fixes.
What’s coming: Recovery Retail
Even though it may yield results today, a changing technological landscape and consumer behavior will quickly render shortcuts obsolete.
To become Future Ready, our recommendation is to treat this situation as a blessing in disguise and begin building towards a sustainable future.
For on-the-go consumers, shopping in today’s environment is more convenient than ever before. Retailers in every segment are now competing primarily on expediency, driven by the fast-paced metropolitan lifestyle. To survive and thrive in the “new normal,” businesses must embrace omnichannel integration to enhance the in-store and eCommerce experience.
Although online shopping has seen a huge surge, store visits will return if retailers can persuade consumers with a compelling value proposition. All these efforts will be driven by three key factors: ultra-convenience, price sensitivity and discretionary spending.
To help you envision new roles for stores and execute a tactical change to a preference-based store format, we have outlined what we call “the Nine R’s” of modern retailing:
- Revisit your ranges, assortments and SKU groups to facilitate substitution and kit management.
- Re-Calibrate demand patterns, forecasting plans, buy plans, sourcing and orders.
- Rejuvenate your vendor ecosystem by expanding the number of local players to reduce transportation and fulfilment risk, and build-in reliability and agility.
- Re-tool with the option to switch gears in the event of future disruptions.
- Redesign your stores with digitization, to better align with omnichannel shopping and delivery services.
- Repurpose your existing retail space — for instance, by converting store space into a distribution center to accommodate click-and-collect demand.
- Restore algorithmic, automated buying, planning and merchandising processes.
- Re-form by building workforce strategies for skill management and cross functional staff deployment.
- Reinstate innovative strategies like hyper-personalization and contextualized marketing.
What we’re all waiting for: Rebound Retail
Technology adoption has always proven to be profitable for those in it for the long-haul. Once recovery retail strategies have been established, there will be many opportunities and many technology integration decisions to be made. To enable a flexible network and holistic inventory approach, retailers must explore solutions such as distributed ledger (blockchain) technologies, decarbonized retail and predictive analytics, which will help deliver supply chain innovation.
Applying smart business solutions will result in cohesive coordination and store management, which in-turn will deliver:
- Hyper personalized experiences, same-day/same-hour delivery, and urban fulfillment for shoppers.
- An empowered, digital savvy workforce with a multi-tasking “right shifted” skillset for retailers.
- Greater value for suppliers, driven by a supply chain that employs fair trade, subscription-based, locally sourced products.
- Optimized processes, including proactive planning, agile and automated operations, modularity, vertical integrations and digitization.
- Improved sustainability and reduced environmental impacts through more responsible retail.
To be sure, this is a time that requires both caution and creativity. The actual impact of COVID-19 will depend upon how well retailers are able to bounce back with new retail business models, leverage technology to understand customer journeys, and provide new products and services that meet customer needs.
“Like most retailers, we don’t know exactly where we will land at the end of it, but our curiosity and willingness to create will be a guide for us.”
– Jesper Brodin, CEO, Ikea