COVID-19 Retail Survival Guide
It's often said 'there's never a dull moment in retail,' and perhaps the saying has never rung more true than now. Ordinarily, in North America, March is about as dull as it gets in retail - after the holidays and Valentine's Day, before Mother's Day and 'Dads & Grads.'
Not this year. The coronavirus (COVID-19) pandemic has produced a truly extraordinary time.
In a Digital Commerce 360 survey of 304 retailers conducted this month, 47 percent of respondents expected some downside in revenue due to the coronavirus pandemic, while 33 percent stated it was too early to tell. Fifty-eight percent said the pandemic would impact consumer confidence and 22 percent said there would be a significant impact.
From a brick-and-mortar store perspective, RetailNext can report shopper traffic in the United States for the first two weeks of March was down 18 percent as measured year-over-year, with the second week's 27 percent decline heavily dragging down the month-to-date. In the EMEA region, shopper was similarly down, posting a 20.1 percent drop over the first two weeks, with the second week's decline of 28.4 percent being primarily responsible. And, it's going to get worse before it gets better.
Dire straits, indeed.
That being said, a recovery will come, and one just has to look at China for when. Harvard Business Review put the Chinese economy in recovery, and PYMNTS.com reports that supply chain congestion stands at 73 percent of 2019 levels (73 percent of goods are getting through to store shelves), up from 62 percent at the worst part of the epidemic. This is six weeks after the height of the initial outbreak.
So, what do you do now to respond to current conditions and prepare for a recovery? Retailers are in different circumstances in different locations. For example, in the Bay Area, citizens have been ordered to "shelter in place" for three weeks, with only essential services open for business, and that has had a huge impact on retail - many stores are closed. Yet, in other areas and in some segments, business is booming - Best Buy, for instance, is reporting a boost from people working from home, with increases in sales of technology equipment and even refrigerators and freezers for storing food.
Regardless of your particular situation, there are several things all retailers can do during this unique time.
Establish and Reinforce Health & Safety Protocols
Regardless of your retail segment, you should have health and safety standards in place. Now is a time to make them more stringent. Establish and/or reinforce policies for washing hands and sanitizing surfaces - counters and table tops, chairs and their arms, POS terminals, door handles and the like. Insist that employees who feel ill stay home and away from your workplace. For a full list of effective countermeasures, consult the Department of Labor's Guidance for Preparing Workplaces for COVID-19.
Clearly and Transparently Communicate to Employees
The media, both traditional and social platforms, are rife with misinformation. Plus, in moments where there are gaps in communication, it's human nature to fill those gaps with speculation, rumor and innuendo, and those are rarely accurate.
Tell your employees what you're doing and why, and don't be shy to share how you feel too. This public health crisis is every bit emotional as it is physical, if not more. Share with employees your plan for keeping your stores, your teams and your shoppers healthy and safe, and let them know their safety and health is your highest priority.
If you have to adjust your operating hours or close your stores, tell your employees and provide them the reasons for your decisions. And, if there's ever a situation where you don't know, tell them you don't know, but that as soon as you do know, you'll let them know as quickly as possible.
Manage Your Cash Flow and Revisit Budgets
If cash flow is tight, look for ways to free up or create lines of create, be it with your financial institutions or through managing your payables to vendors and suppliers. Programs are available from sources as divergent from one another as the Small Business Administration to Facebook, which announced a $100 million grant program on March 17.
With many retailers experiencing lean times now, be sure to revisit budgets for summer and fall, and make the adjustments as you can. And, if your business is doing well now, look for ways to invest in keeping the momentum going through the rest of the year.
Work Your Supply Chain
The general recovery will come. The question is, what are you going to do when it's business as usual? If your business is in decline this month and into next, what countermeasures will you introduce in May and June to 'make up for lost time?' Prepare and adjust your supply chain accordingly now for any upcoming promotional plans and pushes.
Also, beat the rush and communicate with your supply chain about your holiday inventory needs. Many supply chains across various product lines are stretched to the very limit (and beyond), and it might take time for them to tighten back up. In a zero sum game of winners and losers, ensure you end up on the right side of the line.
Communicate with Your Customers
Be careful of being caught up and lost with all the 'noise' that is currently inundating shoppers. It seems everyone's Inbox is filled with email subject lines that read, "A special message ... ."
When the time is right for your brand, send out sincere and authentic communiques to your customer base. Your top priority should be their health and safety, and you should communicate that to them via email, SMS and store signage. Propose solutions to their most pressing problems, and keep in mind your particular business might not have solutions at this time. For example, if you sell jewelry, it's a big stretch to think someone needs your products and services right now. So, communicate that you'll be ready for them when the time is right.
Perhaps try something creative and inventive, and something new for your brand. There are a lot of kids being homeschooled right now - how can you help their parents? Post videos and other content that is educational in nature, like how a product is sourced and manufactured, or links to publicly available free resources that mesh well with your brand, like nifty LUNCH DOODLES with Mo Willems videos.
We've never dealt with a situation like this before, so there is no 'right' answer. But, there could be wrong answers, so be creative, but ensure you're sincere and authentic.
Not a lot of brands had planned for a global pandemic. But, a great many brands, both small and large, do have crisis management or business continuity plans in place and they are being put into good effect right now. Crisis management plans are relevant for any crisis, be it a natural disaster or other. If you don't have a crisis plan created (and updated on a regular basis), you're learning a difficult lesson in one of the hardest ways imaginable.
Learn from your current situation and experience and adequately prepare yourself for the future.
It's clearly a time of great uncertainty. However, it's not a time to sit back passively and wait. When in doubt, act. Even if it turns out you're moving in the wrong direction, it's easier to change course when you're moving than when you're standing still - just ask any boat owner.
Whether your business is experiencing a time of problem or opportunity, the best you can do is work your current situation and plan for when the height of the pandemic passes.
Good luck, and stay safe and healthy.
Note: For RetailNext customers, please refer to Alexei Agratchev's previous open letter blog post of Friday, March 13.
About the author:
Ray Hartjen, RetailNext