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How should Retailers get Prepared against COVID-19 in 2020?
The COVID-19 outbreak has brought the human life to a halt. It disrupted the worldwide economy, and challenged us like never before. With lockdowns mandatory by the government all over the world, businesses witnessed challenges. With regards to consumer demands, marketing strategies, supply chain, and more can help you attain success The retail industry is no exception in this regard. Implementing the best retail strategies during COVID that can help them sustain in the market became crucial. So, let us begin and throw light on the same!
The Changing Consumer Behavior
As per the NRF survey, the behavior of consumers has changed drastically, owing to the COVID-19 outbreak:
- Out of 10 consumers, 9 have changed the way they shop usually.
- Online orders took over the sales of physical retail stores by 50%.
- Almost 6 in 10 consumers stated avoiding going to a physical store due to fear of contracting the virus.
The Growing Digital Demand
No doubt, a rise in digital demand has been witnessed due to coronavirus. This demand might come down a bit after the COVID-19 outbreak gets over but is surely going to increase in the future due to the convenience and other benefits it provides to the consumers.
In other words, an increase in digital demand and adoption of mobile commerce and eCommerce platforms will be based on two major factors: Higher digital adoption propensity and reluctance to go in public places that are crowded.
5 Retail Strategies During COVID for Businesses
1. Market Demand Fluctuations
Due to the COVID-19 outbreak, most of the retail stores in the ‘red zone’ area have shut down except for a few pharmacy and grocery stores. This practice is even seen in those markets where quarantine orders have not been placed, resulting in a heavy drop in retail sales.
While some retailers are facing a shortage of demand for goods and services, stores like grocery are witnessing an unprecedented demand spike. They are actually going through an out-of-stock situation on a regular basis on a lot of essential consumer products that are being purchased in abundance by the consumers. Retailers need to evaluate and assess such demand fluctuations and get ready to serve their consumers in the best possible way, ensuring long-term faith establishment.
2. Cash Reserves
Retailers, especially the ones with physical footprints, are looking forward to refining and redefining their cash positions owing to the stress associated with laying huge bills in case consumer demands continue to fall in the coming few months. A close look at the present and possible liquidity profile is needed by retailers for assessing cash forecasts in the short term or changes in the dynamics of the working capital.
Due to the fact that the retail industry heavily relies on cash to pay for real estate, stock, and staff, multiple retailers are having regular discussions with policymakers to know if they can influence and take benefit out of any hardship funds, holiday rates, and rental negotiations.
Apart from this, a lot of retailers are reviewing the position of their financial stability in an overall way with respect to various scenarios. If they feel they need lender engagements for amending financial covenants that may have been impacted or refinancing loans, they are surely moving forward.
3. Consumer Safety
Safety is the top-most priority for consumers presently, and they expect the same from their retailers as well. They should have a safety plan in place that not only keeps their consumers at bay from contracting the virus but employees as well. This plan should not be limited to crisis communication but should cover strategies that will help in managing their workforce under multiple scenarios.
Going by the China experiences, innovative strategies should be adopted by retailers to address the safety and demand challenges. This includes hiring people of other industries like restaurants who are idle to meet the surplus demand in the COVID-19 outbreak. Also, a lot of companies have started using their employees in other departments that are experiencing maximum work.
4. Future Supply Challenges
At present, the situation is different for different retailers. While grocery retailers are witnessing a huge demand due to panic buying by consumers and facing the challenge of going out of stock regularly, non-food retailers are yet to feel the impact of coronavirus on their supply chains. This means demand drop coupled with inventory warehousing and long lead times can easily take care of short-term supplies.
But as situations start becoming normal, considerable magnitude variations and disruptions in the supply chain timings across subsectors and geographies are expected. Retailers need to communicate with their main suppliers for assessing the associated risks, identifying uncertain exposures, and creating contingency plans.
5. Customer Engagement
Retailers need to think about the impact that gets created on consumers and consumer relationships as a result of these huge changes. They need to devise strategies that help them maintain the trust of consumers in their brand, along with its products and services.
Also, they need to think as to how they can meet not only the present but future consumer expectations as well, along with providing an unmatched customer experience.
The Rise of Online Stores
Before the COVID-19 outbreak, retailers mostly focused on their physical stores and not much on their online stores since people loved shopping while visiting the malls and markets. However, due to coronavirus, consumers have come to know about the benefits and convenience associated with online shopping, making retailers focus on their online stores more. Retail brands are not minding reduced margins since they are witnessing heavy online orders.
Now, retailers have two options: Either sell their products online or set up their own retail site (brand.com) directly. For instance, Nike walked out of Amazon to concentrate on the direct-to-consumer business model. That’s the reason implementing the right retail strategies for COVID can help you sustain long-term growth.
The Quick Digital Adaptability: Effective Retail Strategies for COVID
Retailers can quickly adapt digitally with the following practices:
- Making digitalization a priority
- Focusing on the visibility of their e-commerce site
- Enhancing personal engagement through innovation
The New Retail eCommerce Landscape
The eCommerce landscape will be completely different in the post-pandemic time, mainly focusing on the following:
- The short-term eCommerce behaviors of consumers will become long-term.
- The new post-pandemic economic reality will lead to profound eCommerce behavior changes.
- A considerable retailers’ consolidation will essentially modify the partner and competitive landscape.
Coronavirus has impacted the retail industry significantly, especially the non-food retailers who have witnessed a huge demand drop. Although grocery retailers are witnessing a surplus demand, they are facing other challenges like staff and stock shortages. Hiring new employees and taking the digital approach is what is keeping the retailers deal with the current challenges.
However, amidst all this, the retail have an additional challenge in the form of managing their retail accounting operations. Factors like eCommerce and product data entry, embrace technology and automation, multichannel retail, customer experience, etc., are crucial. Lack of staff and high costs around the technical set-up at homes of in-house staff, retailers should lopt for outsourcing.
In case you are looking for a professional outsourcing company, you may contact Cogneesol. We have been providing accurate and cost-effective online marketing, accounting back-office support, and data entry services to businesses. Get in touch at +1 833-313-3143 or [email protected] to start your 14-day free trial.
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