Retail

COVID-19: Retailers serving customers on the frontline

March 27, 2020

The state of COVID-19 for Retail

COVID-19 is an unprecedented public health emergency that is rapidly transforming the way we all live our lives. It is also mandating significant changes to retail and commerce. In this dynamic time of humanitarian and social uncertainty, what we buy, how we buy, and when and where we buy is undergoing a seismic shift.

Retailers are serving their communities on the frontline, where the health and safety of customers, employees, and partners remains paramount. Retailers must put responsibility at the heart of their operations and act now to address the far-reaching implications of COVID-19 on their businesses.

How retailers can respond—now

Retail’s distributed workforce leaves the industry vulnerable to employee safety concerns and workforce management challenges. The most immediate hurdles? Dealing with changes to operating norms in physical stores and supply chains, as well as the sudden migration of corporate employees to remote working.

The first step in response is for retail leaders to ensure the health and safety of frontline, store employees, as they deal with the general public. Embedding resilience in supply chains is critical step number two. Disruption to supply chains as a result of COVID-19 is sending shock waves through the industry and the impact is already severe. The third is to enable an elastic digital workplace that supports and protects employees in corporate headquarters, but also minimizes business disruption.

In the short term, activating a business continuity strategy will depend on one question: in this time of crisis, do customers consider your products and services a “need to have” or a “nice to have”?

Retailers must put responsibility at the heart of their operations and act now to address the far-reaching implications of COVID-19 on their businesses.

What’s really driving retail purchasing today?

Priorities for retailers of essential goods and services

Radically different lifestyles and working patterns caused by self-isolation, social distancing and homeworking mean consumers will prioritize spending on the essentials: food, health, hygiene, household cleaning, as well as online entertainment and exercise services. Some retailers in these essential categories need to meet unprecedented demand that exceeds even holiday levels. For these retailers, the key priorities are:

Ensure the health and safety of employees in-store, in DCs and those doing last-mile delivery.
Manage store opening hours to allow for cleaning and sterilization, to protect shoppers and employees.
Ensure the timely replenishment of essential products on store shelves and rationing volume purchases to ensure provision for all customer groups.
Meet increased labor requirements to accommodate higher demand for ecommerce, click-and-collect, delivery and DC operations.
Adopt new digital experiences for consumers by entering into 'personal contactless' delivery of goods, either directly to home or for curb-side pickup.

COVID-19: New habits are here to stay for retail consumers

Challenges for retailers of non-essential goods and services

As stores, offices and manufacturing facilities close down across the world to manage the spread of coronavirus, retailers operating in segments like apparel, beauty, luxury goods, and home improvement face different challenges:

Manage financial impacts of temporary store and office closures (even with offers of government subsidies, in many countries).
Leverage new connectivity tools and ways of working to support corporate staff working remotely.
Scale ecommerce operations and switch focus to digital consumers experiences and inventory levels, as consumers turn to online ordering and home delivery.
Create strategies to manage inventory stuck in closed stores and ports that needs to be moved to make way for next season’s product.
Adopt scenario planning with value chain partners for global supply chain disruptions likely to impact sourcing, manufacturing, and logistics.

What's next for the retail industry?

The realignment of purchasing priorities, personal lifestyles, and working practices forced on us all by the COVID-19 pandemic may represent a seismic shift in the retail industry. Consumer adoption of technology-enabled commerce is likely to deepen and broaden permanently, even in segments like grocery which have to date resisted the large-scale migration from stores to online seen elsewhere. Values-driven buying behavior accelerated by this crisis will become the norm. The appetite for digitally enabled retail models will grow.

The retailers that are most adaptable to change will be best positioned to ride out the immediate challenges and build stronger, more customer-centered businesses. Retailers with resilient operations and an adaptable ecosystem will be rewarded. This, more than ever, is a time for Responsible Retail. That means demonstrating responsibility to consumers, to employees, to partners, and to communities as societies around the world manage this health and humanitarian emergency.