The pandemic has changed retailing, maybe forever
As the pandemic shut down our shops, we adapted. We joined new online retail sites and placed orders in advance. For printer paper or new sneakers, we shopped at Amazon.com.
Many retailers did not change, however, and those without a strong online presence are now failing. This is not a temporary phenomenon. The retail industry was changing before the virus and now it is forced to change further.
There are three ways I see accelerated online adoption changing retail forever. These include:
Online shopping doubling over the next 12-18 months as people continue to focus on safety. Retailers will:
- Invest strategically in online and omnichannel to build capacity and benefit from economies of scale;
- Overhaul and adopt more efficient processes and enable real-time responses, enabling supply chains to build capacity and grow market share;
- Find a way to make online profitable.
Stores being reinvented to deal with social distancing. Reducing shoppers’ anxiety and risk will go alongside brand affiliation, as customers seek the safest possible shopping experience. Retailers will:
- Deploy robots and other automated technology in-store to limit the number of people;
- Increase the use of Internet of Things and real-time store monitoring as ways to help with product availability and business visibility;
- Add immersive and mixed reality platforms, like Hololens, and voice assistants, like Alexa, to aid shopping from home;
- Use robotics for delivery to reduce the need for person-to-person contact — something that protects workers and customers.
Planning for the next crisis will be a top priority. Against a background of economic downturn, retailers will aim to minimize the impact of future peaks — or indeed any other events. Retailers will:
- Better connect on-shelf demand signals to orders to limit shortages of key grocery items;
- Use ecosystems to help provide elasticity of resources to meet demands.
As McKinsey said: “It could be that the decisions made during this crisis lead to a burst of innovation and productivity, more resilient industries, smarter government at all levels, and the emergence of a reconnected world.”
- Ways Retail will Change Permanently – Oliver Guy/LinkedIn
- Defending Retail against Covid-19: From “Act Now” to “Plan Now” – Bain & Co.
- Can supermarkets really deliver in a day? – BBC
- Planning For The COVID-19 Supply Chain Recovery – Forbes
- Can Ecosystems Help Prevent Shortages? – Oliver Guy/LinkedIn
- The future is not what it used to be: Thoughts on the shape of the next normal – McKinsey & Co.
DISCUSSION QUESTIONS: Which of the pandemic-related challenges identified in the article will be the biggest hurdle for retailers in the years ahead? What solutions would you add to those offered?