Photo: Walmart
Nov. 2021: How should retail plan for a return to normal?
Knowledge@Wharton staff
Presented here for discussion is a summary of a current article published with permission from Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.
American consumers are crowding back into stores and restaurants as states ease pandemic-related restrictions. But a full return to normal isn’t likely to happen until November 2021, according to Zeke Emanuel, chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania and a Wharton professor.
“That’s your date,” Prof. Emanuel said at a video conference in late June hosted by Wharton’s Jay H. Baker Retailing Center. “I’m generally a very optimistic guy, and I’m being realistic here.”
Mr. Emanuel believes that’s how long it will take for an effective vaccine to be distributed widely enough to stop COVID-19’s spread.
Until then, corporate employees should continue to work from home as much as possible, because enclosed spaces and prolonged exposure to others increases the likelihood of transmission. Mandatory masks, plexiglass dividers and regular sanitizing of hands and surfaces should be standard protocol to protect frontline workers who cannot work remotely, including store employees.
He said stores have much to consider. Can some merchandise be put outside to limit the number of shoppers inside? Can windows or doors be opened to help circulation?
For employees, use of face masks will remain important, although he suspects daily symptom screening questions will be more effective than temperature checks.
Testing more than once a week for asymptomatic employees is wasteful and can create a false sense of security, he said. Instead, an emphasis on personal hygiene — especially washing hands — and store cleaning is reassuring for both employees and customers.
Store closures depend on a lot of factors, including the concentration of local cases, evidence of transmission among workers, store design, etc.
An advocate for a safe reopening of the economy, Prof. Emanuel believes strict adherence to non-pharmacological interventions — i.e., social distancing, wearing masks, avoiding crowds and enclosed spaces — work better than haphazard compliance with them.
“I think it’s almost inevitable we’re going to have a second wave that pops up in October or November [of this year], when we’re all going inside. That worries me a lot,” he said. “Adhering to strict measures doesn’t seem possible in the U.S.”
- A Return to ‘Normal’: How Long Will the Pandemic Last? – Knowledge@Wharton
Discussion Questions
DISCUSSION QUESTIONS: How should stores strategize around the potential that a return to normal may not occur until late next year? Should retailers/brands prepare for the worst?
Poll
BrainTrust
Lisa Goller
B2B Content Strategist
Chuck Palmer
Senior Advisor, ConsumerX Retail
I believe a lot of the steps we do now like washing hands, sanitizing equipment and surfaces, and wearing masks will still be around. I think there will still be a lot of trepidation at that time. Who knows if a variant strain of coronavirus will emerge or if the vaccine will be ineffective? There are lots of things we don’t know and I do not think we will see things moving full steam ahead by then.
We think that there will be a shopper-driven desire to return to normal as soon as possible. What does that mean? Shoppers want to go to a store to a.) find the products they are looking for and b.) pay a reasonable price for them. To the extent that products are available, the sooner you give them a shopping environment that looks like February 2020, the better.
There is no doubt that retailers, as well as all businesses, have it tough. There are two very different groups: those afraid of the virus and those who feel it is politically motivated and overhyped. The problem is that businesses have to do everything they can to protect employees and customers no matter how they, their employees, or their customers feel. Masks are a must; sanitizing regularly is a much and, of course, there are huge costs while at the same time tremendous loss of sales.
Now we are waiting for a vaccine. Yet many believe we are already able to cure COVID-19 with Hydroxychloroquine. Once again, conflicting information. So I ask this: when there is a vaccine, will it be well received, or will we then debate whether it’s safe and if we should use it? If that happens, retailers and all businesses will be no better off than they are now.
The solution: Wait until after the election. If this is politically motivated, then hopefully it will die off after the election. If it is not, those who thought it was will have to admit that they were wrong, and maybe then we can work together to find the solution and put this horrible virus and what it has done to our country behind us.
I think retailers have to assume this is going to go on for a while and, in fact, based on a survey we just ran they are expecting 12-18 months, though some are optimistically thinking six to 12 months.
Plus we don’t know what things are going to look like when this is over. What will the economy look like? How many people will have died? How much wealth has been destroyed? What will be happening to the climate?
In RSR’s view retailers have to become agile, because when push comes to shove, we know very little about what the post-COVID-19 world is going to look like. I am not sure many of us realize just how devastating this truly is. We already have more than 150,000 dead in the U.S. alone. And we’re nowhere near done. Agility is key.
We many never fully return to the “normal” of pre-pandemic shopping. While wearing masks and gloves will be a thing of the past post-pandemic, some things may change forever. Retailers and shoppers may adopt the following habits for the long-term: contactless payments, hand sanitizers at entrances/exits, plexiglass at cashier stands, and digital menus at restaurants. Some of these changes are welcomed by all.
And the U.S. will have caught up to where East Asia was three or four years ago. It’s a shame that we couldn’t have been farther along the evolutionary path so we could recover faster — remember all the teeth-gnashing about chip-and-PIN and time wasted in the fighting between credit card providers and retailers? Irrelevant now!
As well as asking when things will return to “normal” we have to ask what that normal will look like. While I reject the idea that there will be wholesale and massive change, there will certainly be some significant shifts. One of the biggest ones will be in where we shop. Online will be bigger (but not totally dominant) but our changing patterns of work mean that our physical shopping dynamics will also shift. How this all plays out remains to be seen. At present we are in the middle of a retail earthquake and the tectonic plates are shifting. We will only get a sense of the new landscape once everything stops moving.
Most retailers are implementing processes that require face masks for employees and customers, limiting shopping hours, limiting the number of people in stores, doing much more frequent cleaning, and requesting social distancing. These processes will stay in place until there is enough vaccine that retailers and shoppers feel comfortable in not seeing infections. Shoppers are getting more comfortable with these process changes and in-store shopping will continue to grow. If by worst you mean shutting stores down altogether, this is not likely to happen.
I agree with the professor that “strict” distancing doesn’t seem possible in the U.S. Sometimes the public appears to be acting like rebellious teenagers, refusing to wear masks.
However be that as it may, retailers can anticipate a return of customer traffic by continuing to implement mask-wearing and frequent hand-washing among their employees, as well as sanitation procedures between shifts. These measures aren’t only for employees, but also to continue to provide relatively healthy environments for a safe return.
This wake-up call is well-timed: retailers, especially small retailers, should double-down their efforts to boost their e-commerce capabilities now – and be ready before the holiday season. I still hear many small retailers hoping to get back to normal early next year, and focusing on preserving cash instead of looking ahead. Slashing costs works for a short time, but if the pandemic persists next year we need a real, sustainable strategy to bridge this long period of time. Whoever invests in their e-commerce capabilities in August and September will be able to take advantage of the online holiday season. Procrastinators will miss Q4 2020, which could doom their business.
Expecting the best but preparing for the worst would be wise. Many retailers have already worked on quickly optimizing their business around COVID-19.
They should do anything and everything to keep the shoppers they have. Clearly communicating their efforts to sanitize their stores and ensure worker safety should be at the top of the list. Inventory management/product availability should be next. Out-of-stocks will get shoppers to look elsewhere. Shining the light on their digital efforts, fine tuning BOPIS and shop-for-me, delivery, etc.
They should look to partner with other retailers (their neighbors) and their landlords to address how things like queuing outside of stores will be handled in cold weather. Perhaps creating shared pop-up pickup centers in parking lots. Let’s hope the prediction of 11/21 before we are back to normal isn’t true but plan for it just in case.
November 2021. Great. I just read that the consensus among meeting planners is that small events won’t return until mid-2021 and larger events by the end of 2021.
There are so many things to consider beyond what’s identified in this article. Can storefronts, for example, be converted to those that fully open like many restaurants already have to bring the inside out? The good news buried under the bad is that retailers have the ability to brainstorm and plan how they will approach everything until we return to normal.
I would really like to see a virtual meeting (or meetings) between a variety of retailers, large and small, to come up with a list of best practices during the pandemic that could be shared with the entire retail community. Pivoting will still be essential. It would be helpful to so many to learn from the successes, failures and suggestions of individual retail companies.
The “new normal” will be nothing like “normal.” While the virus might have caught us off guard in the spring, we now know it is not going away shortly and we probably will not see a real change in retail shopping behaviors until a vaccine is widely available. Retailers know what the COVID-19 shopping environment is like. So instead of introducing interim stop gap measures, the time is right for the development of a comprehensive strategy. Plan for the worst and hope for the best!
Having been steeped in this topic for the past four months, I’ve gleaned some important guidance from really smart people, the most notable being from the attorney we work with from Davis & Gilbert. Gary Kibel over there has really helped us understand one of the most important points — “Duty of Care.” How to return to normal under these totally unique circumstances does indeed have some general guidance. However what matters most is that the retailer follows through on what any third-party jury would filter judgement through (should it go south), which is, “did this business follow through on what most any normal person would consider their duty to care for those in their midst?”
The facts we have in front of us are fuzzy, changing and politicized. There’s also the general statement of “well, if you don’t like the policies and procedures X is utilizing, don’t go there.” But you can’t say that for the employee on the floor who needs a job and just wants strong measures in place to protect their health. In light of that, I strongly feel that the brass tacks basics are critical, but there’s enormous value in going just a little further to show both customers and employees that they are in good care, and, therefore everyone in the store can mentally free up to go about the business of shopping.
What does new “normal” mean? Humans have incredible coping mechanisms and we are survivors by nature. Retailers will survive as they will be required to change and adapt to consumer behaviors. No one predicted we were going to have a pandemic. The real question is, what do we do about it? Retailers and brands will need to shape how they engage with their customers by adopting new paths to purchase and customer journeys that are different. Retailers who can provide options to suit consumer emotions will come out winners.
Companies that take risk management seriously pivoted fastest this year. For instance, Texas-based grocer H-E-B has deep experience in managing short-term, regional risks like hurricanes. In January H-E-B reached out to partners in China to plan ahead for COVID-19’s U.S. arrival and apply best practices.
Proactively planning for multiple scenarios, including the best and worst cases, can boost agility and coordinate company-wide mobilization.
Stores can base their strategies on factors within their control, including mask mandates, crowd counting, and sanitization protocols. In addition, corporate teams can continue to invest in e-commerce and BOPIS and encourage consumers to consider online shopping as a safe alternative.
Retailers have learned great lessons on how to do business with customers through the time of this crisis: how to get merchandise in their hands through different channels and, very importantly, how to present their store with the look and feel of a new experience, not the old presentations their customers remember. Having these things in place will always elevate the store’s “top of mind” consumer position. I certainly hope the professor’s predictions are wrong, but I believe we all should act like it is closer to his predictions. I’d rather be ready than caught again.
Retailers and brands should scrap the idea of “strategy” — as we traditionally think about it — period, full stop. Our traditional view of the future as a linear extension of the past and present hasn’t served us very well. One could argue that brick-and-mortar retailers still haven’t adjusted their strategies all that well to that little disruption we call the commercial internet and that’s been around since 1993. Nor have branders and retailers been particularly adroit at converting social/culture change and the emergence of the so-called, “new consumer,” into sustainable growth platforms. The current crisis isn’t just about COVID-19, or Black Lives Matter protests, or the culture wars, or social media, or cancel culture, or increasing polarization of the consumer base — it’s about all the above and much, much, more. While industry pundits have been pontificating about technology as the lighting rod of strategic change, some of us have been arguing for literally decades that the retail and consumer goods industry should have been paying more attention to biology. Sadly, we were right. So “normal” is a word I would ban from all strategic dictionaries. There is no “normal” now, there hasn’t been any “normal” for quite a long time, even pre-COVID-19, and there is not likely to be any “normal” for the foreseeable future. As to whether or not branders and retailers should “prepare for the worst,” I have no idea what that means. They should prepare for continuous change that may hurt them or help them depending on their flexibility, agility, and ability to play — and win — without a rule book.
COVID-19 is going to be with us for a long time, and the best-run retail companies are full speed ahead on digital transformation, while retailers who secretly hoped that the Internet would go away are flailing. It’s inspiring to see companies like Tractor Supply seize the opportunity and succeed as a result.
At this point I don’t think it’s about planning for some “new normal.” I think it’s about planning how to navigate a combination of a minefield and quicksand, with the occasional piece of steady ground to be the exception, not the rule. Planning windows are six weeks to six months, not six to 18 months. National chains will have a combination of all the above, so agility and flexibility in the supply chain will be of paramount importance. The shift to e-commerce will continue, but the planning and execution at the brick-and-mortar level will have to be highly regional. I don’t think it could get much more complicated.
There is no going back to what “normal” was in February 2020.
We can see there is a segment of society who insist that things have not changed, that we can go back, and that all of the precautionary measures should end.
This is all wrong, in my opinion.
Retailers who use this time to better focus their messaging, to strengthen their ties to their specific clientele, and who adapt to things today, tomorrow, and next week will be the ones who provide the most value and are successful because of that.
Who knows what we are going to look like in Nov. 2021?
Those retailers and brands that have continued to move forward, plan, automate and work collaboratively will be the ones that will increase their chances of navigating through this very challenging period and will emerge stronger. Those that cower in the corner and are afraid to pivot, take action and stop doing things the way they’ve always done them will be left behind. This is not the time to put off the very technologies that will help sales, category management, and operations become more nimble and efficient so that more time can be devoted to all of the new challenges we will need to get through in order to ever get back to anything that looks like normal.
The obvious thing for retailers to do is to plan for multiple scenarios. The smart thing would be to shift their culture to be ready for any scenario. What’s going to win tomorrow is being able to move quickly, take risks and be nimble enough to adjust for anything. The bonus is those same things will yield outsize growth over time.
First, retailers should assume that nothing is going to change and protocols should be kept and enhanced. That will be SOP.
Then face the fact that shopper habits have changed and, most importantly, they are in flux. We don’t know where they will end up. Ask yourself, how do we take advantage of the flux of the shopper? Can we offer something new and different that will suck them in?
One of the famous motivational speakers said (paraphrasing), “My favorite time is winter. That is when things are dormant. I think about the future and start to plant seeds to see which will grow.” We all should embrace his thought.
This is the new normal. Deal with today’s scenario and you won’t be wrong. Anything better later on is a bonus. It’s easy to react to better, it’s harder to retrench.
An 18-month horizon is realistic for now. If things improve sooner, great. Planning for anything less than that is to ignore reality.
I’m an optimist, but I agree with professor Emanuel. A return to normal is not on the horizon until fall 2021 at best, so retailers and restaurants need to get creative. They need to figure out the new customer journey for their brand and optimize people, process and technology to support this altered state. eComm, BOPIS, BOPAC and delivery are all fundamental to success in this pandemic era and beyond. The current situation is simply hastening the move to digital transformation.
What DAY in November, Jay? Honestly, this borders on parody: the whole point of contingency planning is that you don’t know quite what’s going to happen … or when.
Unfortunately, not knowing the details makes planning difficult, since various strategies become mutually exclusive over different time frames. For example, we’re told that “enlightened” companies should try to retain employees, whether business is there or not; but “try” is the key word there, and it may become impossible (for all but the most cash-rich companies) as shutdowns drag on; indeed retaining more than a skeletal staff may ultimately doom the business.
I’d suggest adopting a few mutually consistent scenarios, allow flexibility, and hope the worst doesn’t happen. But if you’re a bar that’s been told you may not be able to open up until some time next year, really — what can you do?
November 2021, IF there is a successful vaccine distributed next year. That sounds realistic. Dr. Emanuel is the kind of expert we should be learning from and basing our expectation on his work and perspective.
We really need to abandon the notion of “normal.” It’s liberating, actually. We all know retail has been in flux for many years and in the before times it was a slow but inevitable slog. Since February of 2020, the force of change in retail has been at warp speed.
We should be working on writing the playbooks and scripts for what’s next, based on practical, pragmatic strategy and realistic execution.
This is tough planning. Over the next 15 months consumer demand for goods will continue to move against past demand — so it will continue to be difficult to order with the usual 6-9 month lead time to include shipping by boat.
At the same time, retailers who choose not to take a risk on inventory will also lose the opportunity to gain the profits from pandemic era shopping.
I don’t think it’s an issue of planning for the worst. Rather, plan to take advantage of opportunities while controlling the risk that’s taken to be within reason.
The new normal will involve all the things my colleagues mention around physical and digital transformation of the customer experience. Those things will be table stakes.
One thing briefly mentioned, but that bears more emphasis, is how the knowledge and behavior of store associates needs to be taken to the next level. Customers will be precious. It won’t be acceptable anymore to simply state “Let me know if you need another size.” How associates interact with, and engender loyalty in the customers who return to stores will be critical to long term health, and needs to be given some deep thought. And then how you instill that mindset in your associates becomes the challenge/need.