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Sneak Peek: How Retailers Are Responding To COVID-19 With Location Intelligence

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As I’m writing this piece, there is breaking news that California Governor Gavin Newson has issued orders to roll back re-openings for non-essential businesses across the state, in response to an alarming surge in the number of people infected by the coronavirus. California’s situation is reflective of what’s happening across the entire nation, with southern and western states being hit particularly hard. Today, Florida shattered the daily record for new cases previously held by New York.

There can be no question that the retail sector is getting hit particularly hard by the continuing crisis. I don’t need to give a litany of bankruptcies, store closures, or recent earnings to prove the point – we can all see it in our daily lives. But RSR has made the point several times in recent weeks that at least when it comes to the modernization of the entire retail sector, COVID-19 is an accelerator of change, not something that came out of nowhere to invalidate changes that were already in motion or at least being considered.

RSR is conducting a new study on the business challenges and opportunities to be addressed by adopting geolocation data intelligence. This will be our third benchmark in three years on the subject, but the new study has a particular twist that makes it extremely timely: sudden and massive shifts in consumer behavior in reaction to COVID-19 have created an environment of massive uncertainty. Businesses need to react, aligning their strategic objectives and unique businesses to what is happening in the marketplace. The new study is intended to help the industry to understand the tactics that retailers and their partners are developing and specifically how location data and analytics are helping business leaders improve their decision making.

A sneak peek at the data is really revealing. As is so often the case, over-performers (what RSR calls “Winners”) demonstrate a much stronger sense of the need (Figure 1). The differences between Retail Winners and everyone else are nothing less than shocking; with the notable exception of “assess<ing> and stabiliz<ing> remote operations at a hyper-local level”, many average and under-performers just don’t feel the same sense of urgency to address the effects of the pandemic on their businesses as Winners do.

We wonder what kinds of conversations are happening up in the Board Room! Are non-winners throwing in the towel? Or are they in some kind of denial? It’s difficult to say.

Figure 1: Are Non-Winners In Denial?


Source: RSR Research, July 2020

The responses from average and under-performers about specific remedial actions that they can take are just as confounding (Figure 2). Aside from offering more contactless buying options like Buy-Online-Pickup-Instore (BOPIS), only about one-half of average and under-performers are pursuing any of the tactics we asked them about. On the other hand, no fewer than 58% of over-performers are pursuing any of those tactics.

It sounds like hyperbole, but a winning behavior is emerging: those retailers that are concerned about the effects of COVID-19 on their operations and acting on those concerns are Winners, while those that don’t are definitely not Winners. Those average and under-performers are acting like the proverbial “deer in the headlights”.

Figure 2: Like A Deer In The Headlights

Graph 02

Source: RSR Research, July 2020

Will Geo-Location Analytics Help?

Now, more than ever, precise local intelligence is needed to understand where business is happening and what customers want. Being able to analyze local demand and see how it continues to change as the pandemic affects communities is critical insight as companies work to balance inventory and resources to meet customer demand. This is where location intelligence has a critical role to play.

The question is, do retailers “get it”? As might be expected, Winners at least do (Figure 3).

Figure 3: Winners Get IT

Graph 03

Source: RSR Research, July 2020

Over the years, RSR has uncovered some fundamentally different points of view between over and under-performers, but I’m having difficulty thinking back on any subject where the differences were so stark (perhaps retailers’ early reactions to new “smart mobile” technologies in 2008?). This raises some interesting questions: are thought leaders (pundits, analysts, and B2B publishers) dropping the ball? Are the tech firms that promote the value of geo-location data and insights not pushing hard enough? It’s certainly not a case of something being so new that it hasn’t been proven in the marketplace! In fact, geo-location data analysis is a key component of how government agencies are tracking the progress of the pandemic.

RSR will have to address those questions in the upcoming benchmark report. Look for the upcoming report, Business Continuity And Recovery In The Age Of COVID-19: Location Intelligence In Retail 2020, later this summer!