Within the last month, thousands of retailers have closed their brick-and-mortar doors to consumers to minimize the risk of spreading the coronavirus. While a necessary move, the implications include enormous losses in revenues and the likelihood of employee layoffs, which is forcing retailers to quickly adapt to survive.
To remain competitive, Pranav Tyagi, CEO of Tango, a global leader in Store Lifecycle Management System (SLMS) solutions, offers indie retailers advice on how these forces affect their current business strategies and measures they can take to quickly shift gears to do their part to help patrons stay safe and for their own business’ wellbeing.
Q.: Besides store closures, what other challenges are retailers facing in the wake of the coronavirus?
A.: As the retail landscape adjusts to today’s new normal of social distancing, stay at home policies and the reality of consumers shopping increasingly for essentials, whether online or in-person, retailers are faced with a number of challenges.
For those essential retailers, such as grocery, pharmacy, and restaurants which can offer take-out or delivery and are able to keep their physical locations open, maintaining a safe environment for their employees and customers is top priority. This includes enforcing proper social distancing measures such as special shopping hours for vulnerable populations and maintaining appropriate space between customers throughout their shopping experience. These measures prevent new challenges for store managers and employees, such as limiting the number of patrons permitted inside, managing the long lines outside that result, and accommodating for the space needed between customers at checkout.
Another challenge is that of grocers running out of high demand household staples, such as cleaning supplies, paper products, flour, and eggs, which results in customers going from store to store or trying alternative delivery channels. Many retailers are also facing a staff shortage. As demand for essentials increases, these retailers need to staff up and are struggling to find people to fill the roles.
Meanwhile, for restaurant companies, the pandemic presents another set of issues. As dining rooms have closed, those that are able are trying to make the shift to delivery and take-out operations. On the other side, some supply depots are struggling with an ovder-supply of food in the face of limited demand, further exacerbating disruption to the industry.
Q.: What do you think the biggest thing is for retailers to focus on right now?
A.: Aside from employee and customer wellness, retailers are focused on business survival and cash preservation. Since occupancy costs are typically a number two or three expense for retailers, it’s essential to identify ways to help reduce them. Smart retailers will dig into their leases to better understand their kick-out and co-tenancy clauses, and determine if they can renegotiate the leases and payment terms. The current environment also presents an opportunity to assess and potentially shed underperforming locations. Retailers should quickly review the performance of individual stores or restaurants against their trade area potential, and make both immediate and long-term decisions to optimize their portfolios.
Part of survival means a good hard look at omnichannel strategies. For retailers with limited experience, this is an opportunity to try other channels to reach customers. Smart retailers will use this as a learning experience to improve their customer experience for the future.
Finally, retailers are concerned with maintaining the personalized customer relationships they’ve worked so hard to cultivate. Right now, retailers are at a stand-still with their planned marketing and customer service campaigns, and with the future of the retail landscape uncertain, they are worried this may represent a permanent shift. With customer loyalty preservation in mind, retailers are trying their best to share incentives and regularly update their customers.
Q.: Some states are in complete lockdown. How would you say retailers can combat this issue?
A.: The only answer to combating lockdown is to move all operations to an ecommerce strategy. For those retailers who already have an ecommerce site in place, they should take this time to focus on making improvements, refining order fulfillment and processing operations, increasing inventory and making sure the site is optimized across all mobile platforms. Today, consumers are on a quicker search than ever before for essentials, and there are no second chances for a bad online experience.
Q.: For online retailers, how do you think they can step up their ecommerce game to keep customers buying their products?
A.: There are a few strategies online retailers can implement to remain competitive in this challenging landscape. First, they should incorporate back-order functionality into their ecommerce platform. Providing an option to capture customer requests and inform when available will lead to repeat business and customer loyalty. This is essential in a time when most consumers are forced to search multiple online sources when hunting for items they typically purchase routinely but are now in short supply.
Next, retailers should be flexible in shifting their staff to support both online and pick-up order fulfillment. By restructuring staff schedules to meet the new needs of peak delivery and pick-up times, retailers can ensure their online demand is being met.
Finally, retailers should strive to better match items they are showing as available for purchase online versus what is on hand to be delivered. Inventory levels are often inaccurate and if the consumer has no way to reserve a product while shopping online, retailers will likely experience both increases in shopping cart abandonment at checkout and lost customers. Retailers should invest in improving their inventory management systems to become better aligned to the reality of the ebbs and flow of demand. By taking a more customer-focused approach to their ecommerce operations, the best online retailers will win both consumer loyalty and longer-term profitability.