Photo by Artem Beliaikin on Unsplash
About 60 percent of stores in the US may be closed for the unforeseen future, but management teams, employees and tech partners are working together now to prepare for the reopening of US retail. There are still unknowns about when, where and how stores will open, but we do have a strong understanding of employee and consumer expectations and the tools retailers will need to open with confidence.
Transparency and safety breeds loyalty
First and foremost, ensuring the health and safety of employees and consumers is the primary concern for the reopening of America. This means not only following CDC guidelines, but going beyond these guidelines to make customers and employees feel secure. To start, employees and customers will be looking for similar things: reconfigured spaces for social distance and traffic flow guidelines; the use of plexiglass shields where appropriate and PPE; and new protocols like temperature checks, or masks worn in transit to and from the store.
Just as critical is the communication to employees and then customers about the action being taken. Stores will also have to re-consider marketing promotions and other levers that used to result in store traffic — something that is not particularly encouraged today. The stores who have said they will not run big promotions are playing the long game, focusing on building trust through transparency. The hope is that this approach may result in greater loyalty and long-term financial gain.
To support a strategy that centers on transparency and safety, retailers will need new tools. For example, there has been a lot of discussion around contact tracing, and it may become a best practice for retailers. The idea is that using certain tools can help identify employees that may have been exposed to another employee who has tested positive for coronavirus. If managers know who has been exposed, containment measures are more effective.
Opening at scale will be complicated
Sounds straightforward to simply make a plan and acquire tools, but opening at scale will be complex. First, it's unlikely any retailers will have a grand opening — more like a rolling soft opening. As we’ve seen in the news cycle, each state and sometimes each county are handling their response to coronavirus differently. This may mean retailers will have to approach each location with its own set of considerations. For national retailers, this also translates to a deliberate and complex coordination across every function of the business — IT, supply chain and operations and then consideration of brand differences. Changes may look different based not only on region, but consumer segment expectations too which means something to portfolios with multiple brands in foodservice and travel.
Planning is essential
No one knows how the reopening looks, but health and economic experts are considering multiple curves (think of the letters W, V and U), and retailers may want to do the same. We may have to “rinse and repeat” lockdowns in a W scenario for example. Retailers will likely be looking at how these scenarios affect demand and then cash flow and making adjustments accordingly. But this planning time also presents an opportunity for retailers to shift from a “business stabilization” mindset to a “reimagine the business” mindset. Now that consumers have acquired new habits rooted in technology, how does the business change? Where are the areas for optimization across functions? If a business was 90% in stores and 10% pickup, and that’s now shifted to a 70% pick-up model, there are several changes to consider at the back and front of the house.
Many experts think consumers' behaviors will be slow to go back to a pre-COVID world if at all. If a consumer is enjoying a newly adopted grocery delivery service, they might not go back to their old ways. This change gets at the increasingly digital world and the future of retail — concepts surrounding the use of AI, a touchless check out and robotics are being implemented at an accelerated rate because of COVID-19, and will likely continue to benefit retailers after this pandemic has ended.
Reopening is going to take a lot of planning and some new investment, likely into more technologies. Those that have already invested in these tools will be better positioned than those who have not, yet there are still some new technologies that many retailers had not considered six months ago that may be vital for operating this year. It will be interesting to watch how tech investments are applied across the business to not only create a safe environment for employees and consumers, but also a more streamlined, digitally enabled experience that meets non-health related expectations.
