COVID-19: Five business continuity challenges coming to the retail industry
Retailers are struggling to keep pace with demand for products during the coronavirus pandemic. Here are five ways the future of retail will be challenged after the quarantine.
Consumers around the world have been forced to change their shopping mindset and patterns due to COVID-19, with one-third of shoppers in America purchasing groceries online during the early phase of the pandemic. Shopping patterns are unlikely to fully return to a brick-and-mortar model post-coronavirus, creating new challenges for retailers. Here are five challenges that will present themselves and what to do about them.
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1. E-commerce is here to stay
Whether it’s groceries, apparel, furniture, or electronics, consumers of all ages have now been exposed to the benefits of online shopping. E-commerce is here to stay, putting pressure on traditional physical stores that haven’t already developed an online presence to do so fast. Whether because of convenience, instant gratification, selection, or fear of another pandemic, online shopping isn’t slowing down. Going forward, projects that develop Buy Online Pickup In-Store (BOPIS) or Buy Online and Ship to Store (BOSS) or to customer portals will become a priority for many retailers. Stores without an online presence will likely lose customers to competitors that can deliver products to customers.
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2. Sourcing and supply chain logistics must be managed
It’s not enough for retailers to simply enable customers to purchase online, retailers will need to be able to source locally and outside of their regions when applicable, and deliver the products as promised. Whether its pick-up in-store, curbside, or delivery to the customer directly, retailers will need to ensure they’ve worked out the logistics. This means having a solid supply chain developed, the right types and number of delivery methods, and the people in place to deliver to customers on time. Consumers are, for the most part, impatient, and it doesn’t take long for them to become dissatisfied when their deliveries don’t arrive on time. Retailers will need to develop and communicate realistic delivery strategies and practices and set customer expectations.
3. Attracting and retaining talent is crucial
Attracting the best talent has always been a challenge in the retail industry. Why? One simple reason is other industries offer higher salaries and more attractive benefit packages. COVID-19 has demonstrated exactly how much consumers value their day-to-day necessities. Because of this, the retail industry, especially grocers, will become a lifeline to many who cannot afford to be medically compromised. Online grocers will need to step up their game, attract, hire, train, and compensate all staff fairly. Staff in this retail niche are now seen as essential frontline employees and should be treated and compensated as such.
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4. Inventory tracking and management keeps customers
Never before has the need for precision inventory tracking and management been highlighted. With notable product shortages during COVID-19, retailers are scrambling to get inventory, and track, and manage stock. Meeting customer demands has become a new reality that many stores never imagined, especially when it comes to essential items like groceries, medications, and priority items. With dislocated stock and unavailable stock from limited suppliers, this can quickly become a customer retention issue. Companies that manually or semi-manually tracked inventory will now need to adopt robust inventory management systems and practices if they want to keep pace with their new online competitors.
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5. A sustainable business model is needed
Competition in the retail industry has always been steep. Retailers that have been unable to offer products through an e-commerce platform or deliver products on time will likely suffer some customer loss to their competitors. Post-COVID-19, these retailers will be faced with some tough challenges around changing their business model to more of an online retailer to try to attract new customers and keep some of their existing ones. The sustainability of their businesses will depend heavily on it.