Weathering the crisis
Retailers regionally and globally have been badly affected by the Covid-19 pandemic. What are the steps they should take to stay protected?
As the Covid-19 pandemic presents a global crisis without modern parallel, it has become clear that the consequences across geographic, demographic and economic areas will be profound. Undoubtedly, Covid-19 is the biggest blow the retail industry has experienced for decades. And retail leaders should respond promptly and with urgency to adapt and prepare for the “next new normal” that will follow.
Retail and brand leaders have an obligation to safeguard their organisations, build new muscles to thrive in a world of turbulence and discontinuity, look ahead to anticipate and meet their customers’ new needs, and set the foundation to achieve sustained growth and performance after the pandemic is over.
SAFEGUARD THE ORGANISATION
Protecting your people and customers from spreading the disease is the number one priority. On top of that, engaging and communicating with your staff on a frequent basis is key. Determine how much flexibility you can provide during this stressful situation. Be open, transparent, and receptive to your people’s concerns and priorities while reminding them that everyone will get through this as one strong team.
63% of UAE consumers are optimistic the economy will rebound within 2-3 months, according to a survey by McKinsey & Company in the last week of April
FINANCIAL STRESS-TESTS
This is the time retailers are prompted to identify radical cost levers and check their liquidity positions, implement cash conservation and recovery actions, evaluate working capital requirements and credit solutions, delay discretionary capex, and negotiate flexible financing and leasing terms. How quickly retailers take action in these areas will determine their business readiness to thrive in the era of the next new normal that will follow.
INSTIL COMMERCIAL URGENCY
Resilient retailers cannot wait for a rebound in the post Covid-19 era. Their frontline teams must sharpen their commercial focus to identify pockets of growth and quick wins wherever and however they can. By taking products from offline to online, unlocking new customer segments, finding creative ways to deal with excess inventory, re-creating the in-store experience online, or exploring collaborative industry partnerships, they can move proactively to seize emerging opportunities and capture market share while optimising resources across Q2-Q4 to meet the updated 2020 budgets.
STAY CLOSE TO CUSTOMERS
The crisis is shifting consumer priorities and behaviours, which will most likely stick as habits after the pandemic is over. So how can retailers win the battle over customer relevance? Resilient retailers must make sure they engage with their customers wherever they are to ensure business continuity, reinforce loyalty by protecting and rewarding them, and extend their support to local communities. In the same way that Covid-19 will leave lasting emotional scars, it will also create lasting emotional bonds for long after the pandemic has passed.
RE-IMAGINE THE SUPPLY CHAIN
Changing consumer behaviour is not the only shift retailers are facing. In this new reality, the industry is witnessing a dramatic restructuring of the global supply chain in which retailers have traditionally operated. And in the near future, we will see a substantial reworking on how retailers source, sort and deliver products across all sectors. Put simply, retailers need to act with agility and discipline to expand hybrid fulfilment methods that blend e-commerce and store resources – and these in turn will help the industry to pivot, scale, adjust and respond in the new reality.
RETHINK THE BUSINESS MODEL
Retailers have an unprecedented opportunity to retool their organisation and adjust their operational model. This crisis is accelerating fundamental structural changes that were inevitable in any case, but are now likely to occur far faster than they would otherwise. Digital technologies will play an eminent role in enabling retailers to elevate customer experience in more meaningful ways. Removing friction from the customer journey and delivering differentiated, personalised experiences is key. It to also imperative for retailers to understand their customers, deliver intelligent supply chains, and empower employees.
DON’T STOP INVESTING
It is too easy to suggest everything will return to normal once this pandemic passes, but make no mistake about it – a mindset shift is already happening. Retailers should use efficiency savings to leverage changing consumer needs and preferences as strategic indicators to reinvest in innovation, marketing, talent and organisational readiness.
As the situation progresses, it will create a continuous shift in the preferences and expectations of consumers. These changes will impact how we live, how we consume, and how we use technology and will emerge more clearly over the coming weeks and months. We anticipate they will reshape consumer behaviour forever.
Retailers and brands that rapidly adapt to this next new normal and retool their organisations will become more resilient and relevant and will succeed and emerge stronger once the Covid-19 crisis recedes.
THE CRISIS IS SHIFTING CONSUMER PRIORITIES AND BEHAVIOURS, WHICH WILL MOST LIKELY STICK AS HABITS