Recommendations For How To Navigate In Crazy Times
Username: Name: Membership: Unknown Status: Unknown Private: FALSE
Last week, I shared some of the roadblocks that retailers told us are standing in their way as they try to sort through the chaos of the past 14 months. Topping the list? Old systems that lack agility, and – in particular – reporting systems that are completely antiquated.
But within the scope of the report that data came from (Managing Through Disruptive Times), we had an awful lot more to say than just “it’s time to buy more technology.” We put forward the following recommendations for ALL retailers – regardless of where they are, what they sell, or how big or small they may be.
Resist The Temptation To Think Of 2020 As An Anomaly
It is inarguable that Q1 2020 – and the pandemic that came along with it – set in motion at least 14 months of global disruption. Disease, conflict, civil unrest: all played their role in upending the more “routine” parts of buying and selling around the world.
However, much of what both buyers and sellers learned during their attempts to adapt to these changes has permanently altered their approach to both. Consumers want to shop in entirely new ways. These behaviors are not going to be temporary. While the widespread adoption of the smart mobile phone in 2007 may have vastly increased consumers’ power, the fact that so many are now living, working, and shopping in entirely different ways than they were even a year ago – and likely will be for the foreseeable future – has made them even more difficult to “delight” during their path to purchase. The ability to deliver the right product, at the right time, and now in the right manner will become only more important as time goes on.
Double Your Efforts On Inventory Visibility/Availability
It is not possible to leverage any of the opportunities identified without a consistently reliable view of inventory. This is true at every node along the supply chain, but becomes absolutely paramount from the moment it arrives at the inbound dock of the retailer’s distribution center. Yes, the ability to ship from store to store, or from store D2C has become table stakes over the past year. And indeed, the ability to tailor and localize assortments gives a retailer a much higher chance of delighting shoppers and winning their ongoing loyalty. However, without an accurate window into which products are available and where – and when – everything else is a pipe dream.
We have been chiding retailers to get a handle on their inventory accuracy for years now. They know they must. It’s not a surprise. The pressure to make this a reality has grown exponentially in recent months. What makes this all the more challenging, however, is as that now, as retailers race towards the goal we’ve been nagging them about for years, the goalposts have moved even further down field. With uncertainty being the only certainty heading retailers’ way in the coming years, it’s not going to be enough to just know what inventory is on hand: the means to forecast what inventory will be needed have completely changed. The past can no longer serve as a predictor for what inventory a retailer will need, and therefore anticipating these changes requires all new types of intelligence and technology. This is no time to sit and wait.
Recognize That The Largest Retailers Have A Significant Head Start
General merchandise retailers have had quite a year. While we often refer to COVID-19 as an accelerant (those who were doing well are now doing even better, while those were doing poorly are only worse off now), the largest retailers on earth also happened to benefit the most from being the most able to deliver on consumer needs during widespread supply uncertainty. This is true from the very nature of the products they sell (food, paper products, sports and hobbies), but also from the fact that they were deemed essential – both legislatively and in the minds of consumers. When safety in leaving the house is an issue, people tend to make the fewest stops, and specialized retailers suffer. Lifestyle retailing becomes less important. Small retailers, fashion retailers, and restaurants are among those in the most pain, and therefore those who will need the most help trying to catch up to the big boys once more.
Those selling technology would do well to remember that these businesses are going to need a lot of help, both from a technological and cultural perspective. They also might consider financial terms that allow those that have been in pain to get started.
Embrace The Role Of AI
Artificial Intelligence’s potential has been the toast of retail trade shows for years – the uncertainty of all we are currently living through only heightens that interest. What will AI’s ability to predict in the middle of such uncertainty evolve to? As we have seen in our data, Winners are betting on its ability to do just that in a big way. The opportunity to analyze external and often non-transactional data to learn potentially non-intuitive correlations between this “soft” data and sales is driving the charge, as is their belief these tools will help them derive forecasts well beyond what they currently have access to.
Furthermore, Winners are backing these beliefs up with disproportionately large attempts to bring data scientists on staff. It is only a matter of time before Winners pull even further away. The message is clear: don’t get left behind. For smaller retailers, this may mean leaning on vendors in new ways to help make this so.
Stop Blaming Legacy Technologies, Replace Them
2020 caught many retailers in a position they (seemingly) would have been comfortable continuing for years: allowing “small margins” to justify continued reliance on systems that have been far too long in the tooth for far too long, already. As a result of the shifts the past year has brought, this has become a true sink or swim moment for many retailers. While panic is never a good idea, our recommendation is to do just what Retail Winners have shown us throughout: triage decisions in a collaborative – albeit it expeditious – manner, prioritize those projects which help your brand get closest to the new buy from anywhere/deliver/any way standards that customers have established, and ensure there are metrics in place to help you “fail fast” (enabling you to move on to things that grow) or help grow the brand. We’ve all had enough surprises lately. Your brand doesn’t need any more. Measure everything.
Abandon Any Notion That Things Will Soon Return To Normal
Though vaccines may be rolling out faster than once planned, a new US president has assumed office, and the world holds its breath in anticipation that things might one day soon be “normal,” no such thing is coming. COVID-19 has irrevocably changed our world – the way we interact, our office spaces, and the way we shop. Most scientists agree that it will be this way for years to come, with booster shots, new vaccines and social distancing protocols garnering headlines each time a new variant of the virus pops up.
Even if this virus simply becomes a flu-like variation that we have to manage each year, life, as we know it, has changed. On top of this, climate change shows no signs of slowing, nor do the political theatrics around the globe that constantly keep our planet in disruptions. None of this is said for dramatic or alarming purposes. It is simply sound advice: if you are in the business of selling goods to consumers, now is the time to shore up your supply chain to be as future-proof as possible. Take nothing for granted, as uncertainty has not played its last trick yet.