In A Season Of Change, Existing Challenges Are Exacerbated
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Just before the outbreak of COVID-19, we conducted a survey of what retailers were planning to do with their stores. At the time, it seemed important. Once the pandemic started to spread, however, it became nothing short of revelatory.
In many ways, the most frequently cited business challenges driving retailers to improve store and corporate planning functions remain the same (figure below). But few could argue that the importance of high quality, thoughtful in-store and distribution center employees has risen in recent weeks. They have become the front lines of the battle against COVID-19. Further, the dramatic and rapid dismantling of national economies (as we write this, more than twenty-two million Americans have filed for unemployment benefits, with no end in sight) has only enhanced the concerns of already price-conscious shoppers.
Figure: Quality Employees, Price Sensitivity And DTC Lead The Pack
Source: RSR Research, June 2020
Along similar lines, worldwide “stay at home” mandates have driven customers to buy more products online than ever before – many of which are products in categories they would never have bought online previously.
This begs some questions. How will retailers re-open their stores? What formats will consumers expect? What requirements will the government place for social distancing, masks and cleanliness until a vaccine is found, and how will retailers plan and execute on these requirements across multiple requirements in different states and municipalities? How will these mandates be enforced and what will the impact on in-store payroll be? In the current environment, compliance is key. Along with compliance, retailers must build plans that create earnings and revenue while conserving cash. This is a tall order.
We also can’t ignore corporate offices and distribution centers in this mix. In the “new normal,” business contingency planning must once-again become part of the corporate mind-set.
We invite everyone to read the full report here.