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To say that the retail sector has been badly hit by the coronavirus pandemic is a colossal understatement.
A procession of government measures, including forced store closures, social distancing, and even limits on the amounts consumers can buy, have caused global retail sales to slump in a way that would have been unimaginable only a few months ago. And things aren’t expected to get any better in the immediate future.
As companies everywhere reel from the shock of the crisis and struggle to implement contingencies, we take a look at some practical measures that retailers can implement to limit the damage.
1. Shift Your Sales Online
Some sectors have experienced a significant increase in online demand. In the UK, for example, both the “health and beauty” and “electricals” categories grew by around 40% compared to the previous year.
As brick-and-mortar stores around the world are forced to shut their doors, the web has become the only channel through which retailers can sell. This makes it important to focus efforts online.
Many big brands have offered a variety of online incentives, including site-wide discounts and free shipping. Consider running similar online promotions to appeal to new digital shoppers.
2. Bolster Your Remote Tech Stack
Retailers have inevitably been impacted by government-issued regulations demanding that employees work from home wherever possible, and this is particularly notable in departments like HR, customer service, and administration.
If your company is unused to purely digital workflows, it’s likely that you haven’t built the necessary online infrastructure and culture to thrive as a remote company.
One way to overcome this hurdle is by building out your tech stack with a view to boosting employee efficiency, such as by opting for project management apps which are designed specifically for “distributed teams”.
Similarly, don’t forget to cater to clients and partners that will be working remotely. Contact management software, for example, will send out automated meeting reminders and enable clients to quickly schedule (and reschedule) video calls.
3. Limit Product Lines if Necessary
While the increase in online demand is largely a good thing for retailers, it has caused some issues. Many businesses lack adequate infrastructure to meet the new surge in orders. This has created a host of extra problems and costs, including poor customer support, late deliveries, and a glut of refund requests.
One way that stores have sought to overcome this issue is by limiting product lines to the most popular items, thus creating space to deal with stretched delivery networks and fractured supply chains.
4. Create Supply Chain Contingencies
The global nature of the coronavirus pandemic has disrupted supply chains on a colossal scale, especially those that operate on a just-in-time model.
Many popular consumer items require parts from dozens of countries and will travel across multiple production lines. And vast swathes of retailers rely on China as a major supplier, where disruption has been particularly severe.
Moving forward, retailers should search for alternative suppliers to supplement or replace existing ones, while also building vendor backup and contingency plans.
5. Maintain Contact With Your Customers
Due to the downturn in high-street shopping and a marked drop in online activity in some sectors, retailers run the risk of losing touch with their customers. That’s why it’s more important than ever to ensure that you’re interacting with followers and subscribers across all channels.
Maintain a steady marketing strategy, even if only for the purpose of continued brand awareness, and ensure that all customers are fully up-to-date with coronavirus-related contingencies, promotions and discounts.
And don’t be afraid to thank customers for their support in these difficult times. Craft a communication strategy that’s designed to allay to consumer concerns, emphasizes ethical initiatives, and highlights practical points.
6. Diversify Delivery Options
In order to encourage online shopping and better cater to increased demand (which is the silver lining for most retailers), it’s essential to offer a range of delivery options, over and above what’s usually available. This strategy will also help ease already overburdened delivery networks.
Grocery retailers, for example, have benefited immensely from offering in-store pickup for items ordered online, dedicated delivery slots for elderly people, and arrangements for social distancing during delivery, such as leaving products in a predetermined place.
7. Consider Working Capital Options
Many retailers will experience cash flow and working capital problems during coronavirus. While some governments have introduced emergency measures, such as zero-interest business loans and grants for paying employees, it’s still worth being aware of working capital solutions that are available to you.
Certain financial products, like merchant capital advances (in which the lender takes a percentage of monthly sales), carry relatively little long-term risk for retailers and don’t require company assets as collateral. A large number of banks are also offering business customers repayment holidays on loans, so take advantage of these wherever possible.
8. Build a Recovery Plan
While the end may seem distant, it is vital to think about your strategy for recovery when things calm down.
Ensure you’re asking the following questions:
● Are you ready to cater to increased demand?
● Are marketing plans ready to go when shops reopen?
● Are you able to quickly recapture any lost market share?
● Are supply chains and logistics networks functioning?
● Are you prepared for any aggressive competitor activity?
● Do you have contingencies for continued low demand?
Use the time available now to develop a comprehensive plan that will enable you to leverage future opportunities and limit losses when it’s time to return to normal.
Conclusion
Retailers are going through a tough time. Millions of companies are at risk due to factors like shop closures, low demand, overstretched logistics networks, disrupted supply chains, and more.
Those businesses that leverage the few opportunities that do exist, while also working to limit damage, will find themselves in a far stronger position when the crisis passes.
