The impact of COVID-19 has been felt across industries but in our most recent episode of The Best Run podcast, I explored the way retailers have had to adapt and change during this global crisis.
I spoke with Sally Illingworth, a communications and marketing strategist with previous experience in food retail franchises; Luke Stow, a technology and innovation strategist with a passion for customer experience; and Evan Mantis, Executive General Manager for Consumer and Service Industries at SAP ANZ.
Luke noted how it’s been a challenging time for everyone and how change management has been critical for retail executives during COVID-19. “It has really changed the dynamic around customers in their relationships and experiences are changing based upon a world where communication for work and play are minute-by-minute on any device or application. That experience and the way they shop and engage with retailers is an interesting prospect to explore moving forward.”
Sally noted the importance of digital readiness in providing improved experiences to customers and employees, highlighting the importance of resilient and robust supply chains.
“Many retailers that struggled through COVID-19 were due to a lack of digital preparedness.”
A critical questions Luke put forward was about the importance of customer loyalty programs after this global pandemic. “Retailers should focus on services that can provide customers – regardless of price point – a more seamless customer experience,” he explained.
“It’s about structuring information systems and little data to get the right info to the right people at the right time to tailor experiences and utilise meaningful insights for the customer or employee journey. Retailers need to build around these journeys rather than a simple supply chain or process.”
Sally agreed about the importance of little data for tailoring customer and employee experiences.
“Many businesses don’t understand the volume of data they create or have access to, which can make it seem overwhelming. Retailers should be more proactive and targeted with its data to remove an overwhelming feeling and provide a more specified focus.
Data is an asset, manage it correctly to realise benefit for suppliers, retailers, and employees.
Evan noted how these elements are important for a retailers’ ability to pivot quickly. “We saw two major retailers provide essential boxes, offering a service to society’s most vulnerable. They’ve also provided temporary employment arrangements for most affected industries such as airlines. That ability to simply and rapidly onboard 20-30,000 people is vital considering major retailers have seen four Christmas peaks within last few months.
“Robust HR solutions like SAP SuccessFactors offers retailers insights on staff leave balances, reducing liabilities for compulsory leave rather than layoffs, which really helps morale during this time. But even simple initiatives like Docusign, lets staff sign for things like JobKeeper while keeping them safe and engaged with the business.”
Luke expressed an excitement about the retail sector’s opportunities moving forward, tailoring supply chains towards experiences rather than just moving goods. “It’s about being included as part of the value chain in delivery and experience to customers, reshaping retail’s supply chain, distribution, and delivery to customers,” Luke explained.
“However, retailers need more little data to offer its supply chain resources and tailor experience requirements for customers at multiple touchpoints – these are the considerations to get excited about.”
Evan noted the increased focus on an ethical supply chain, particularly considering the Modern Slavery Act 2018 and the wider value of product sustainability, which has become a consumer focus as well. “It’s about the importance of de-risking supply chains,” he said. “We’ve seen this in the fashion industry as delays of supply from China impacted on local wholesalers and consequently on retailers and customers.
“Retailers have also come to understand the economic realities to purchases and will need to be more creative around business models, such as sharing costs through common suppliers, warehousing, or systems. COVID-19 has shown the risks of reliance on import, highlighting the need for more local manufacturing, which can also help ensure more ethical and sustainable supply chains.”
Luke look at the value of omnichannel delivery to customers, ensuring backend systems connect to customer-facing digital touchpoints to help leverage capabilities and provide a more seamless customer experience anywhere, anytime, and through any application that enriches communication and engagement between the brand and its customers.
Sally said retailers will experience ongoing challenges due to the impact of COVID-19 on traditional business models. “There will be a challenge in pricing for customers on omnichannel; retailers need to be aware of the operating costs of offline versus online to remain competitive. We’ve got more informed customers, so the importance of communication and transparency in terms of unit economics and pricing strategy needs to embraced by retailers to grow out an omnichannel experience.”
Looking at inspiring brands that have adapted well, Evan highlighted Bunnings. “Their e-commerce strategy over 12 months has been very good as they’ve especially ramped up over past few months to provide a consistent experience. That combined with Woolworths’ essential boxes is why those two retailers emerged out of COVID-19 as trusted brands.
“Moving forward, it’s about providing a seamless experience and improved digitalisation of customer services. By offering omnichannel, more choice, and an enhanced digital experience, retailers can deliver on promises and grow.”
Sally also noted the importance of digital readiness and embracing change at a leadership level. “Retailers need a balanced approach to management to adapt and grow from this. They must understand the relationship between costs, investments, employee and customer experience.
“Traditional retail models have changed; we can’t make ad-hoc decisions based on balance sheets. There needs to be longer term decision making, using a learn as you go approach with agility to test and change.”
To understand more about how the retail sector has changed following COVID-19. To learn how retail is adapting to this new environment with greater practices and technologies than ever before, check out SAP’s global webinar, Adaptive Strategies in a Changed World. Click here to see highlights from the retail and consumer products webinar.