- This is a checklist to help Retailers position their response to the COVID-19 pandemic and their planning for the recovery.
- Key actions include changing their mindset to a “crisis mode” and being willing to fail fast and learn quickly.
- This is a generationally defining moment in history, as well as Retail. How businesses act in these moments will define how they are seen for years to come.
This is serious
The COVID-19 viral outbreak has now reached a critical point in many countries around the world. With millions of people infected in hundreds of countries around the world, this is a generationally defining moment. How people, companies and governments act in these moments will be remembered in the history books.
The UK government has implemented an enforceable lockdown, following the lead of other European countries further down the track in terms of timelines. This includes requesting all UK citizens to return from travel and closing of all non-essential Retail stores and operations.
This is having a huge effect on the UK economy, as well as reverberations globally. No business leader can claim to have seen anything like this before, no less know how to respond and react with confidence. What we are living through, could redefine society as we know it.
However, Retailers can mitigate some of the potential outcomes if they act quickly and tackle the crisis head-on, whilst also supporting and protecting colleagues.
While the path will be uncertain, we have provided a checklist for Retailers to consider when creating their COVID-19 battleplan.
Fast learning is crucial
In this situation, there is no precedence to lean back on and support decision making. Any consultancy that offers support in knowing where this goes is guessing. But that doesn’t make you helpless.
The only way you will be able to understand the implications to customer demand, operations and messaging is to try things. The reality of the situation means that all customers belts are tightening as much as businesses and therefore every £ is being fought over.
To do nothing will be catastrophic, this is the only piece of advice that can be guaranteed.
The mindset of all Retailers and their teams needs to adjust from one of cautious, optimised decision making to that of crisis management. To quote John Maynard Keynes; “it is better to be broadly right than precisely wrong”. In times of crisis, the chances of wayward precision increase dramatically. It’s OK to get things wrong in pursuit of the right answers.
This ‘change mindset’ isn’t easy but approaching your strategy with the same rules you have always had, is a recipe for disaster. There is still the need to think creatively and to protect your brand image, but the only way you can build a picture of how your business operates in a COVID-19 world is to start again with trying different initiatives and measuring their responses.
Act quick, fail fast and learn faster.
Retailers Action Plan
1) Bigger Than Business
How businesses act during this time will define how they are seen and how quickly they recover. Retailers have grown away from the times where they were small businesses at the heart of each community. But now is the time for that sense of purpose to return. Consider what your business can do to support the community at a local level, whether its vulnerable people or key workers. This will depend somewhat on the types of product or services you sell. This also includes colleagues, and decisions on how to navigate through this crisis and how you treat them will be recognised for both good and bad reasons.
2) Set up a Recovery Team, Cross-functional working
Retail businesses have operated in functional siloes for many years. The ambition of process excellence means that we are very good at working within our business rules, perfecting how we have always done things. The rules change now for a good recovery. As a business, you will need to empower a team of colleagues to oversee a path to recovery that covers the entire business. They need the power to be able to change business rules for recovery efforts. Marketing Managers will need to be able to try new types of promotions, as long as Retail Operations Managers can execute them. Warehouse Managers need to be in constant contact with Buyers and Merchandisers to understand the stock position. This will need a team effort, from a lean group that can make important decisions for the company.
3) Communicate regularly, Colleagues and Customers
People understand this is a unique situation, and likely to have lasting effects for months and months. It’s also a situation that is changing by the day and by the week. Regular communication is important to ensure people don’t feel forgotten about. Sometimes even if the message is nothing has changed, the fact you are checking in and people have the platform to ask questions can help to ease fears that everyone is having. You don’t need to have all the answers, no one does.
4) Understand your Stock position, Cash is king
Most businesses know this and operate this way already. But now more than ever, cash flow is your lifeline. Many businesses will have had a lot of stock build-up over this period of lockdown, with even more on the water. Worse still, it might be seasonally irrelevant. This needs to be dealt with head-on, and whilst it may be painful there is plenty of work that can be done to optimise promotions and markdowns to maximise the profitability of the activity. Remember, everyone is in the same boat, so you will be competing for the same cash from customers – and against a backdrop of large-scale redundancy and uncertainty. We don’t know what will work, but old rules around Promotions and Markdowns go out the window, you need to try things and find out what is going to turn the stock.
5) Understand the impact on your supply
The stock problem is as much physical as it is financial. Warehouses are clogged, stores are clogged and some supply chains still have product being produced and on the water. Working closely with suppliers, whilst understanding their challenges, there is work that can be done to mitigate this issue. In apparel, if the product fabric hasn’t been cut yet, there are ways you can re-optimise the size profile of the orders to suit your stock position. Your suppliers might also help with re-routing stock to different locations if you have multiple warehouses. Use a task force to come up with some creative ideas but remember that the answer isn’t to pass on the pain.
6) Understand the impact on online
In years to come, when people are asked who led the Digital Transformation in their business – some might say COVID-19. This is time more than ever to start the process of understanding how to transition into truly omnichannel processes. For store-based Retailers, the truth might be that online simply cannot pick up the slack left by store closures. But it can help, and it can start the journey towards a more balanced approach. A company that had truly mastered DIY online would be seeing the kind of demand that Amazon is seeing right now, likewise for Fitness products. Out of any crisis, there are still businesses that flourish in the cracks in the market where brave Retailers can match untapped demand.
There is a lack of clarity for everyone in the current climate. No one knows the lasting impact it will have, nor when it will be over. This could usher in a new normal for Retail that no one has ever seen before. Retail is used to taking its lumps. Whether it’s the decline of the high street or battling the likes of Amazon. The good news is the people and the businesses are some of the toughest in the world.
We need to stick together, learn quickly, fail fast and try our best.