Covid19, Retail & Innovation - Deciphering the dynamics

Technology | 3 minutes to read

17th Jun, 2020

Business continuity in times of pandemic like that of COVID19 is critical. What is meant by ‘business continuity’? It is not letting the communication die out – at all levels of stakeholders, be it customers, consumers, suppliers, partners, investors, and employees. In this time when movements are restricted, the line of communications is being kept open via a digital medium. The scenario reaffirms Gartner’s statement that said “…a wake-up call to organizations that focus on daily operational needs at the expense of investing in digital business and long-term resilience”. But then the question arises – how and what to communicate. In these times when all traditional mode of doing business is suspended due to limitation on in-person action and there is no guarantee on the time till when the situation will last, empathy is the sentiment that one must adhere to – in all communications, in soul & spirit.

Your customers may or may not be looking to purchase at this time, but then they must be aware that irrespective of where they figure on your sales pipeline, you are there to extend all possible support. Communicating and engaging with them with empathy wins customer loyalty. Corporate discussions and aggressive product pitches, at this time, are only going to back-fire and may result in a disengaged customer who might be already distracted given the current environment. A positive, empathetic pinch to your messaging and support at these times may go a long way in these confusing situations. Many companies have adopted an innovative support approach or are offering their services for free as a part of their customer outreach programs.

Innovation has become a necessity

Any marketer will be able to tell you that pandemic has forced a change in their target group which has either shifted or enhanced. Though the basic criteria of the target audience remain the same, yet it is their pain-points that have changed. Now with the changed pain-points, you cannot be pitching an old product that has lost its usability. Similarly, with the business. Now that our customers have changed needs and are operating under restricted movement, the marketing strategy also needs to change in its accordance and bring in innovation to suit today’s times.

From the point of consumers, their priorities have undergone tremendous change since the lockdown started. Looking at retail, the top-line view is that demand for essential products has shot up with consumers’ inclined towards ‘stocking-up’. Lockdown globally has pushed the envelope and consumers’ spends have been recalibrated to consider primarily the essential items and push the purchase of luxurious and discretionary products for a later date or drop it altogether. Besides the demand for essentials going up, we need to consider the drop in-store footfall too. While consumers are ready to spend and there is a demand in the market – the channel to facilitate the purchase needs to be relooked at. Customer experience and satisfaction is still the primary aspect of all sales and cannot be compromised irrespective of lack of in-person engagement. Hence, there is a critical need for marketers to relook at the marketing strategies and evaluate its sync up with current market dynamics. In doing so, one can also not do away with the criticality of long-term assessments. Hence, marketers need to consider both short term and long-term impact of the marketing strategy they evolve in these times.

Digital merchandising and recalibration of delivery networks

The global retail supply chain has received severe set-back and is reeling under the challenge posed by pandemic’s effect on the health and safety of employees as well as the livelihood of many communities falling under the retail domain. While the situation is similar in other industries too, the however top-line view is that it is retail that has received the severe shock. Movement of goods from manufacturer’s to shelves to customer’s doorstep has come undercome tremendous strain. These units were developed as robust systems in place, not agile enough to respond to exponentially changing purchase patterns of the customer like today. Hence, every minute area of the supply chain is being reconsidered, evaluated and tweaked to suit the surging demand of discretionary goods, shift to online ordering platforms and at the same making health and well-being of both workers and customers an immediate priority.

Suppliers are reducing varieties of the same product from the product portfolio and at the same time trying to engage with strategic suppliers. The payment system has also undergone change between suppliers and for all the existing orders the suppliers have started risk mitigation efforts. For merchandisers, given that high-demand category has pumped up hence staff reallocation to this segment is being revised. Existing merchandising algorithms are being over-ridden to accommodate the surge in-demand products. Preserving cash and switching to digital payment mode is being adopted seamlessly. Merchandisers have also started to anticipate sales demand of the future and have started to prepare for both the contingencies – the new normal as well as the continuation of the existing situation of lockdown. The distribution system has started to retrain the workforce and started to undertake its deployment by rapidly shifting demand centers and burgeoning e-commerce space. There is an added stringency of maintaining hygiene, sanitization, and social-distancing measures for the entire workforce, be it delivery personnel or back-office or in-store attendants. The logistics unit needs to arrange for more transport for directly supplying to stores or smaller hubs that work as feeds for online inventories. There is a need to explore alternative and faster delivery options that can be complementary to existing delivery options.

 The recalibrations across the entire chain across planning, deploying, transferring and managing inventory need to be in tune with the demand. It should be positioned at the areas where there is high demand be it online or offline and even the offers under the product need to revisit to suit the demand trajectory. For this, the inventory management tools need to be tweaked to overcome replenishment and reallocation needs basis demands.

Realigning marketing budgets

The changes in the retail supply chain need to be in tandem with the marketing strategy. The yesteryear marketing strategy wouldn’t help as today’s customers are undergoing changed circumstances with a global impact. Marketing needs to retarget the audience by revisiting the target group. With the change in pain-points, the priorities of customers have also changed. Further, the customer’s realities need to be considered and budgets need to be allocated accordingly. Digital presence is on the rise with most working from home or under restricted movement either due to lockdown or impacted by pandemic directly. Hence, to accrue high response rate the medium has to be digital for sales pitches. This requires developing and generating digital content that catches the pulse of the customer. Marketers are now hosting virtual events to increase the visibility of their portfolio, from the resting chair at homes. Lots of budget is being allocated to increase the brand’s presence in webinars, live chats and online community groups. Virtual events are turning out to be helpful as irrespective of industry and size of the company the prospect outreach is global, and the process is all very simple. With video on up-rise, marketers are also allocating huge budgets for a video call for sales pitches. This helps overcome the in-person engagement restriction while at the same time it helps companies in supplementing their offline sales strategy with live-streaming options.

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