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02 Sep

Retail’s Response to COVID-19 in the US – and Where We Go From Here

Shoppers in lines with masks

Author: Chris Brett

When someone talks about “getting back to normal” in a post-pandemic world, what comes to mind? The distribution of a vaccine? Reaching herd immunity? A return to how things were before but with more social distancing? 

In retail, the idea of “getting back to normal” is a strange one. Retailers are advised not to strategize this way.  There is no going back now, because consumers have already built new routines around their pandemic-era habits.

In 2009, the University College of London published a study in which they found that it takes an average of 66 days to form a habit. In the US, we hit day 66 of a state of emergency (with restrictions in place) on May 18th. 

That was over three months ago.

The experts at REPL agree there is no going back – for consumers or for retailers. So, how did US retailers respond to the COVID-19 pandemic overall, and where do we go from here?

The World of Retail Pre-Coronavirus

Before the COVID-19 pandemic wreaked havoc on our day-to-day lives, retailers had things somewhat easier.

The buying process in many cases would go something like this (especially in grocery): 

Customers would come to your location, walk into your store, go and find the products they wanted themselves, pick them up, bring them to a member of your team, give you their money, and drive it to their own homes. 

Large shopping mall

Over the past four to six months of COVID-19 upheaval, this all turned on its head. No longer were people allowed in stores, but retailers still had to find ways to serve them. For the essential retailers who could still welcome customers in person, they were forced to completely transform operations to meet coronavirus health guidelines.

Knowing what we know now, it’s easy to look back at how the industry operated before and wonder why retailers didn’t pivot earlier.

Chris Brett, senior solutions director at REPL, put it this way:

“There was a bit of complacency. If you’d asked me this question last year, I probably wouldn’t have given you the same answer; but in hindsight there was time to adopt change that would have made trade during the pandemic much easier. It’s not like BOPIS technology and self-service apps didn’t already exist before – it’s just that most retailers didn’t fully embrace them.”

As the shining example in the modern era of retail – namely with ecommerce and rising consumer expectations for convenience and speed – Chris spoke about Amazon and their increasing relevance during the pandemic. 

“The general reaction in business, and wider society, is ‘We couldn’t have predicted COVID.’ However, Amazon has been around for over 25 years, and they were primely placed to handle the pandemic” he said. “They have an extremely successful e-commerce model. Did retailers truly do enough to learn from them or disrupt them?”

The answer to this question has played out in real-time during the COVID-19 crisis, with retailers across the country scrambling to pivot their operations and workforces to stay afloat.

How Retailers Adapted to Meet the Coronavirus Moment

There are prime examples of companies who were agile enough to pivot during COVID-19, and those who did not fare so well. Examples of struggling businesses can be seen across the country, with a “retail tsunami” of bankruptcies and closures affecting SMBs and giant enterprises alike.

One example of success touted by Chris Brett at REPL? Best Buy

“Against all odds, Best Buy managed to clue into what was happening, stay relevant, and keep trading contactless from the curbside. They had this fascinating setup where you could drive up, fill out a form with your phone number, then someone inside the store would call and do your shopping for you. They’d then hand off your products to a courier – because they were keeping staff inside / outside the store separated – and the courier would bring it to your car. Best Buy anticipated the demand for spontaneous ‘quarantine boredom’ spending and rushed to meet it; capitalizing upon their bricks and mortar locations and their well established inventory management and BOPIS technology.

It’s these kinds of adaptations that have carried certain retailers through the toughest pandemic challenges. Those having a hard time adapting will likely face further struggles, with Coresight Research predicting 25,000 store closures in 2020.

The Impact of COVID-19 on Workforce Management

As working from home took over in many industries – and furloughs or layoffs took over in others – we’ve gone from taking the company/customer relationship digital to taking the employer/employee relationship digital.

This means additional challenges for retail businesses. How do they communicate with their employees? How do they rapidly mobilize their multiple storefront locations and e-commerce warehouses when there is a shift in buying behaviors or a new government mandate?

Businesses now find themselves at a crossroads: those who embrace the post-COVID environment will be well-equipped to retain talent and continue attracting new employees. On the opposite side, those who fail – or refuse – to adapt will be left behind, facing potential layoffs, closures, and further distress for employees.

Looking Ahead: Post-Pandemic “Normalcy” in Retail

For the companies still standing who are looking to pull through this crisis, Chris had one key lesson to remember:

“I think we all have to accept that consumer expectations are different now. It doesn’t matter what your trading data, your marketing insights or your target demographic questionnaires told you before 2020. You have to assume that any consumer expectations you identified from before this year are now irrelevant. Assume you are starting from scratch.” 

While this may be easier said than done, retail leaders should recognize that no one fully knows what the new expectations for customers are. Everyone is starting out blind, and success will come down to communication and flexibility.

Chris recommends investing in your company’s communication on all sides: both from your employees’ perspective (what they’re seeing) and your customers’ perspective (what they’re experiencing).

On the flexibility side, it’s imperative to modernize your forecast process. Depending on a legacy forecast process that uses only history to predict the future isn’t an option any more. Companies need short-term models, machine learning and science now more than ever.

There’s no use developing solutions for a post-COVID world unless they are going to be truly impactful for your stakeholders.

As Chris puts it, “Uncertainty isn’t going away. Saying ‘the new normal’ has connotations of things being stable. You have to accept that plans are going to need to change as more information becomes available. Your role is to build a business process optimized for that. Organizations like REPL can help with this. Remember that everyone is in the same boat, you’re not alone.”

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