The COVID-19 pandemic has sent shock waves across retail, causing unprecedented disruption. Demand and supply are volatile, with supply chains compromised and many stores closed, either by government policies or their inability to operate. It’s a time when every dimension of the retail business is being challenged. Customer touch points. Customer demands. Customer expectations. The shock was immediate and universal. But competitive advantage can be won through fast and efficient responses during the recovery phase and beyond.
The crisis has created unprecedented challenges across the whole of the retail sector, as retailers try to respond to wild swings in revenue, costs, operations and customer behavior. However, the challenges are different across the categories.
In the retail food business, the focus has been on keeping stores open, adopting new health regimes and solving supply issues. This includes dealing with an unprecedented surge in online orders, as well as unexpected spikes in demand for some essential items.
In quick service restaurants, the vast majority of restaurants were closed, while those who could, switched to home delivery channels to reach customers. Many have experienced significant wastage of perishable stock and huge drops in revenue.
In fashion and footwear, there has been an unprecedented decline in consumer purchases and stalled supply chains, resulting in large surplus of stock, pressures on cash and disrupted seasonal range planning.
Similarly, luxury and department stores have suffered from forced closure of stores, disrupted supply chains and a deepening recession leading to reduced spending on luxury goods.
Even as lockdown ends, many will face a significant period of reduced footfall and strained operations, as well as a new set of challenges to solve, resulting from the anxieties of customers venturing back to shopping.
Fast track crisis recovery
Out of this crisis though, there is opportunity for those who prioritize, plan and act fast. It is about looking forward, but it’s also about looking back and making the required decisions to recover, restart and reimagine your business. Decisions based not just on reactions to the immediate problems of today, but also with consideration for the lasting impacts that this crisis will leave on customer behaviors and our economies.
Lockdowns will ease in staggered steps and the risk of another spike will weigh on the minds of governments, businesses and consumers. Concerns about health will persist, with a focus on sanitary measures, while the adoption of online and demand for touchless retail will continue to grow. Operations will continue to be strained as emergency tactical fixes bend and break under the sustained pressure.
We believe there are eight imperatives to survive and thrive through this crisis:
We can support you in meeting these challenges through a set of strategic global offers targeted to address these imperatives.
We’re also leveraging our COVID-19 recovery experience, sharing our learnings for success brought from our recent experiences of working with retailers in China, meaning we can help you to leapfrog ahead in the recovery process.
Orchestrating our deep knowledge and proven expertise in the retail business, we can help you respond and adapt to the changing retail environment:
- Inventive Shopping: We’re helping our retail clients to chart their future purpose and strategic capability transformations and to imagine, test, deliver and scale transformative ways in which to engage with customers, sell to them and create loyalty with them. We’re partnering with our clients, creating new propositions and capabilities that help retailers grow profitably and retain their best customers
- Recovery Analytics: We’re using advanced analytics and data science to answer key customer behavior, operations and supply chain challenges. We bring the benefit of our retail insight and analytics experience, and our world leading insights service, to improve your short and mid-term decisions and set up for an agile and resilient future
- Operations Rebound: We’re accelerating a safe and cost-effective store rebound and identifying the game-changing trading rebound insights, which will maximize your relevance and profitability as you strive to beat your competition
- Reinventing the last mile: We’re building the business case, creating the technology roadmap and delivering the transformation for online fulfillment
- Supply Chain Reboot: We’re reviewing and optimizing the supply chain to meet the needs of reopening stores, dealing with surges in demand and building resilience
- Cost Containment: We’re finding opportunities across operations, IT, supply chain and stores to manage strategic cost containment for an efficient and resilient future
Sharing the load
We believe in true partnerships with our clients and in this time of crises, we will link our fees to the success of the initiatives that we support you with, ensuring we share risks and succeed together. Of course, different challenges require different approaches, tools and methods. However, we adopt a common set of principles across phases to ensure we can partner on outcomes.
A brave new world
The retail landscape was in a state of disruption well before the onset of the COVID-19 pandemic. Retail businesses are already facing the need to implement digital transformation, identify new ways of shopping, and create new ways of satisfying increasingly demanding customers with new and more personal experiences. We see the shock of the current crisis as an opportunity that will allow our clients to leapfrog several steps along this journey to a brave new world, while embracing a new normality.