With COVID-19, retailers are confronted with store closures and consumers being told to stay at home.
Global business disruption has been predicted to extend beyond 12 months (Source: Imperial College London). This is relevant in the business context because it will force consumers to adopt new habits. It takes 66 days for new behaviours to be automatic (Source: European Journal of Social Psychology).
The “new habits” of high interest is the increased dependency being seen in online retail.
In the second week of March 2020, Marketing Week surveyed 500 UK and US marketers from major brands (earning over $100 million annually) and found…
70% in the UK, and 75% in North America, predict a dramatic increase in eCommerce usage
(Source: Marketing Week)
While this business view looks positive, those retailers with physical retail footprints risk losing those touchpoints for an unknown period of time, placing many businesses in crisis.
Even though what retailers are facing today (with store closures) is unprecedented, history has proven, when businesses effectively manage themselves in a crisis, they set themselves up for long term growth.
The challenge all retailers now face today is how to manage this crisis and at the same time pivot to leverage the opportunity coming from the online channel.
Crisis management 101:
Managing crisis can be summarised in three steps…
- Executive team takes responsibility and leads
- Acknowledgement of issues
- Apply rapid change
(Source: NYU Stern School of Business)
Managing the Crisis – Step 1 – leaders take responsibility:
The realisation of being in crisis requires a paradigm shift within the executive team. Only once this occurs can the business then activate a crisis management plan.
The executive team holds the strategic vision, they control the purse-strings, and steer business resources.
Only once this team is unified can it move on to step 2 acknowledging issues.
Managing the Crisis – Step 2 – acknowledging issues:
The act of identifying and acknowledging issues comes in two contexts:
- Identifying the change in customer behaviour and understanding what their new motivations and needs look like
- Identify the new gaps between the current business offering and this new customer shift
To find these answers require retailers to become better “listeners”: harnessing customer feedback to inform change.
There are two forms of data sets that deliver this act of “listening”: quantitative and qualitative.
Quantitative data:
This is data used to asses consumer behaviours and uncover insights in how they have changed their engagement with a retailer. The tool commonly used is Google Analytics.
Qualitative data:
This data captures customer sentiment about the brand, the products and support services. Some examples of qualitative data…
- Live chat logs
- Call centre call logs
- Interviewing front line sales/retail staff
Together, these two data sets identify all issues from the customers perspective.
The job of the retailer is to present products and services which align to the needs of a target market. COVID-19 has stimulated customer needs to shift, meaning retailers must do the same to keep relevant.
#3 Rapid change
WHO recently released a statement meant for nations, but it applies to businesses in crisis…
“If you need to be right before you move, you’ll never win. Perfection is the enemy of the good when it comes to crisis management. Speed trumps perfection.
(Source: WHO)
Rapid execution comes in three steps…
- Strategic prioritisation
- Execution through collaboration
- Heighten listening skills
A - Prioritisation:
The focus here is to identify those changes which can…
- Take one leap forward to get closer to the target customer
- Drive revenue performance of the online channel
This is the value of the data driven “listening” approach. This data allows retailers to apply simple mathematical calculations to predict revenue lift once changes are made. This drives prioritisation and simplifies the justification of investment.
B - Execution:
Specialist teams need to come together to collaborate in execution of change. Examples of who needs to be involved…
Internal leaders:
The leaders need to roll up their sleeves, get on the front line, and be ready to make quick decisions.
eCommerce technology organisations:
The eCommerce technology is the “experience enabler” for all retail, making this team the hub of all change. It’s crucial for retailers to have a close operational relationship with this organisation.
The right technology and their teams are crucial to executing a high standard of change quickly.
Dedicated internal resource:
When in change, businesses need to adjust processes, create new content, and adjust resources (role changes). Internal teams must execute this under the leadership of the executive team.
Other technology partners:
Collaboration from other technology partners come in many forms. One example is working with teams who can improve the connectivity of business systems.
C – Heighten listening:
The act of better listening answers the question, “did the recent change add value to our target customer?” If it hasn’t, better listening helps to uncover what worked and what did not which informs the next round of rapid change.
Concluding comments:
One example of business change seeing quick benefit are those who are bolstering resource in support and logistics. Retailers are taking physical retail employees and having them be available for support calls, respond to emails, and be accessible for live chat.
User research has proven 65% of consumers who buy online engage with support content or engage with an employee before buying online. As online traffic grows, so too does the need to increase the support function.
Amazon and Walmart understand this, and both are in the process of hiring over 100,000 new employees each (Source: Wall Street Journal).
The good news is, if a retailer listens and makes change which improves customer experience, their need to engage with support declines, enabling the online channel to scale to new levels.
The question no longer is IF a business needs to change: it’s imminent. Those businesses who best manage the crisis both in the short and medium term will set their business up for long term growth.
This article was as tagged as Business Transformation , COVID Retail , Digital Strategy