The coronavirus pandemic has undoubtedly been marked as a time of disruption across all industries with mass amounts of uncertainty leaving consumers and businesses to adapt ever-evolving reactions.
The world moved quickly into “new normals” with worry and fear driving consumer behavior. Worried for health and cleanliness, consumers opted for contactless transactions and many adopted hoarding behaviors. Shifts to e-commerce have perhaps been the most consistent across industries. As early as mid-March, surveys conducted by First Insight found 75 percent of consumers admitting personal shopping behaviors had been impacted. Early reports found initial declines in U.S. shopping though saw great increases as consumers began shopping for items conducive to spending long periods of time at home and consumer markets who have historically shopped in-store pivoted to e-commerce.
A recent report that looked at data from Emarsys in cooperation with GoodData found online sales for traditional retailers are trending up 54 percent in the U.S., with fashion and accessories online sales up 65 percent year-over-year. However, the data also revealed that average order volume remained flat, showing a 20 percent decline in the U.S. While online sales remain strong, findings showed it is still not enough to lift total retail sales.
Still, as consumers’ health fears lessened, economic worries continued, and polls discovered most Americans expected COVID-19 to trigger a recession. The coronavirus pandemic saw unemployment reach more than six million, and while stimulus checks helped, worries lingered. In its report on “elevated health concerns,” Deloitte found 27 percent of consumers are concerned about making upcoming payments and 43 percent are delaying making large purchases. In its analysis, Deloitte said consumer behavior, “including what consumers plan to buy, how they intend to buy it and why, continues to evolve within today’s dynamic environment.” The firm has continued to survey consumers throughout the pandemic.
The coronavirus outbreak also put a spotlight on supply chains, which experienced unprecedented disruption. Almost immediately, as consumers began panic-buying, demand for essentials was amplified, leaving distributors without historical sale data to inform supply decisions. In many cases, labor shortages impacted fulfillment as well. Companies like Amazon faced a surge in demand for deliveries during the crisis, but drivers and warehouse workers feared contracting the virus or struggled with care for children who had been sent home from school.
More than ever, companies needed a way to manage supply chains remotely and in many ways, the crisis served as a tipping point for digitalization. New models have emerged during the pandemic, including a “supply chain of the future” created by First Insight and Li & Fung, which uses Voice of Consumer analytics for better product and pricing decisions.
As companies continue to navigate ongoing disruption, WWD asked industry solution providers and thought leaders to share advice for times ahead.
Rod Sides, vice chairman, Deloitte LLP and U.S. retail and distribution sector leader at Deloitte
“COVID-19 is challenging retail orthodoxies and redefining consumer expectations. As of mid-May, only 42 percent of consumers felt comfortable going to the store, and nearly one-third were concerned about making upcoming payments. These concerns are shifting consumer behavior and highlighting the need for strong digital engagement strategies and appropriate product assortments. As the crisis unfolds, it will be important for retailers to structure their operations around consumers’ shifting needs and concerns. With that in mind, retailers should consider:
“Showing empathy to consumers and employees alike. As of mid-May, 37 percent of consumers were concerned about losing their jobs. Retailers that implement strategies that consider financial and psychological well-being can create loyalty and may be rewarded after the pandemic has faded.
“Examining digital and omnichannel capabilities. Consumers are seeking out contactless transactions, with 82 percent of consumers planning to use buy online pickup in store in the next four weeks. New collaborations and partners will be imperative to offer these contactless conveniences profitably.
“Fine-tuning merchandise assortments. Our survey work shows that consumers are focusing on nondiscretionary items, while bargain-hunting is on the rise. Recalibrating assortments and examining micro-market preferences may help retailers weather future COVID-19 flare-ups.
“By incorporating these strategies, retailers can address consumers’ shifting expectations as they navigate this time of uncertainty.”
Fayez Mohamood, cofounder and chief executive officer of Bluecore
“Start by putting yourself in your employees’ shoes: what do they need during this time to feel motivated and safe? Establish a task force to oversee employee wellness and company culture and include non-executives to make sure different seniorities and teams are included. With employees working from home, consider how you can foster a sense of community despite the distance by using technology for virtual happy hours, themed game nights, or even rounds of trivia. Keep in mind that screen burnout is real and encourage employees to take time off — an extra day to spend time outside could be the psychological reset someone needs to stay sane.
“From there, revisit your company finances and see if there are small ways you can give back. Perhaps your employees could use a small stipend to reconfigure their work-from-home setup. Or if your company offers catered lunches, consider reallocating this budget toward a charity that feeds health-care workers. As many brands continue to fabricate masks for hospitals or donate a percentage of proceeds to those in need, it’s important to consider what your brand stands for and respond accordingly. Remember, how you act now will be how you will be remembered in the future.
“Lastly, transparency is key. Your employees may be nervous about imminent layoffs or furloughs, and your customers may be uncertain about your business surviving in the long term. Communicate — perhaps even over-communicate — during this time and provide forums for direct feedback so you can continue improving your efforts. This not only increases trust between your employees and customers, but also illustrates your commitment to keeping them a priority, not an afterthought, in an already stressful climate.”
Greg Petro, chief executive officer of First Insight
“Magnify. Accelerate. We control our own destiny. COVID-19 has shaken retail’s reality to the core. COVID-19 is not a disruption, it’s an accelerant. It has magnified and accelerated everything that is good and everything that is bad. In order to adapt and succeed in the new retail market, retailers and brands need to accept and acknowledge what’s happening in the environment, particularly with consumers. We must overcome a fundamental lack of customer understanding to succeed. We control our own destiny.
“In today’s new world there’s a brand new, constantly changing consumer, and with that comes the need for new leadership. Retail executives need to take a position and point of view around their products. Now more than ever retailers need to stop and look forward, not backward. With no reliable historical data, looking in the rearview mirror is no longer useful. There’s no way to forecast your way out of this situation. It’s time for an industry change, with actionable solutions.
“The key to recovery is implementing voice of customer analytics, strong data-driven product strategies, and strategic digital solutions. Understanding the ‘new’ evolving consumer as they navigate this new world requires leadership to change their behavior to understand and keep up with consumers’ constantly changing needs, wants, and points of view.”
Habib Bakshi, chief executive officer of SkyDiamond Elite
“Apparel companies that have thrived during these unprecedented times are those that have been able to quickly pivot to boost their e-commerce presence. We know that consumer habits built today will lay the foundation for retail’s natural evolution. COVID-19 simply fanned the flames that were already burning.
“Across our client portfolio, we have seen an increase in conversion rate and online AOV. Our partners’ strong belief in our data mastery allowed us to clearly view business trends while rapidly testing to produce wins across all digital channels.
“Eighty-five percent of the companies that we’ve analyzed have exhausted their ad spend unnecessarily. Our analytics show 70 percent of fashion brands having their retargeting budget spent on unqualified buyers who are statistically unlikely to make a purchase. When reallocating this wasted spend and retargeting proven customers, we end up turning a previous loss into a win, exposing exponential returns.
“COVID-19 has created the necessity for brands to innovate as consumer trends evolve. Those most willing to adapt and invest heavily in digital strategy will position themselves for success. E-commerce was always going to be the future, brands just never thought its mastery would be required in two short months.”
Ali Rayl, vice president of customer experience at Slack
“Companies use Slack as a place to get work done. When the world shifted to remote work, we had a responsibility to help them navigate an already difficult transition in the middle of a global crisis. We’re making resources available on our web site and are working closely with small businesses and global retailers like Wayfair, Cole Haan and Benefit Cosmetics to help them quickly adjust and plan for changes. Beyond that, we’re trying to set an example by giving our employees as much flexibility as they need. Our company is built on empathy and solidarity, and those values have only been more important as people inevitably need to take time for themselves and their loved ones.
“My advice to managers and leaders is to be more deliberate and proactive while they’re not physically around their teams in order to know truly how people are doing and how they can help. When everyone is working from different locations, it’s important for leadership to make sure teams are aligned and connected. Daily stand-ups are one way to achieve this. These don’t have to happen on a conference or video call, they can happen right in Slack. Our team also uses dedicated Slack channels to share what we’re reading, listening to, or photos of our pets, which helps us all stay connected.”
Brian Long, cofounder and chief executive officer of Attentive
“As a retail or e-commerce business, you have to be extremely flexible and agile in order to adapt your strategy to quickly meet the needs of your customers. Right now, it’s survival of the fastest. The brands who will survive, and thrive, during times like these will be quick to adjust operating models and test new technologies.
“E-commerce has grown rapidly over the past few years, and recent months have only accelerated this movement. Creating an exceptional e-commerce experience is no longer a ‘nice to have’ for brands — it’s essential to staying ahead. People are buying a wider variety of products online and doing so more frequently. Building out your brand’s e-commerce presence and related marketing strategies is not a short-term fix — it’s a major investment in your company’s future growth.
“Businesses right now need to adapt quickly and adopt a testing mind-set. Consumers’ motivations have shifted significantly over the course of the past three months, so brands who are eager to try out new technologies to meet these needs are the ones who will stay ahead. Prioritizing improved consumer experiences, like enhancing direct communications through channels like personalized text messaging, will only help drive more revenue for your brand.”
Carol Juel, executive vice president and chief information officer at Synchrony
“As the pandemic continues to disrupt everyday business, new opportunities emerge for companies to accelerate their technology transformation and deliver seamless, contactless and digital customer experiences. Today, consumers are looking for safer ways to pay for their purchases through contactless credit cards, mobile wallets and peer-to-peer payments. To meet consumers’ growing embrace of contactless payments, this could be an opportunity to deploy new mobile scan-and-go technology for curbside service or in-store pickup and upgrade point-of-sale systems to provide contactless and mobile payment options during checkout. Increasing our contactless options have enabled cardholders to make essential purchases without the physical exchange of cash or plastic.
“Adopting an agile mind-set is just as important as adopting the right technology. At Synchrony, people are at the center of everything. How we work is critical to a culture of innovation. Empowering your people and running agile meetings focused on informing, discussing and deciding helps teams adapt to an evolving customer climate, and test and improve products aligned to customer needs. Equipping employees with new tools and systems help make their jobs easier and more productive.”
Rachel Stocks, executive vice president of global premium products and benefits at American Express
“The best thing companies can do during this time is actively listen to their customers. By listening, you’re able to quickly adapt products and services to meet evolving needs, deliver a more personal experience, and build stronger relationships. We continue to deepen our relationships with our American Express card members through relevant, distinctive value and exceptional service.
“Many of our premium card products reward card members for spending on things they love — typically traveling, dining and entertainment. With COVID-19, we saw many of these activities come to a halt. As a result, we listened and quickly pivoted to introduce a variety of limited-time offers across streaming, wireless, supermarket purchases and more, to help our card members get the most of their memberships while they were staying home.
In ensuring our customer remains our north star, we’re able to pivot and pursue opportunities to further support them and bring to life the powerful backing of American Express.”
Andrea Stone, managing director at BrandJuice
“For some lifestyle brands, equities anchored in aspiration have become an unexpected Achilles’ heel. Our collective mind-set has shifted [and] so has our spending ability, considering today’s reality. Consumers are rethinking choices for their nonessential purchase dollars — seeking tangible benefits, buying into purpose. Some brands, once-powerful beacons of promise, now need fine-tuning to the heightened expectations of an anxious market.
“The phrase ‘beauty is more than skin deep’ has never been truer. Brands will be accountable for balancing substance with style — proving inclusivity with consciously designed offerings, as consumers increasingly define their affinity for brands by shared values rather than prestige. And brands are facing multifaceted expectations: solve functional jobs-to-be-done yet fulfill emotional needs; prioritize consumer desires for holistic well-being yet deliver on origin sourcing and ethical mandates, too.
Brands must pivot, steering today’s realities into tomorrow’s demands: adaptation of product offerings to meet new market expectations, connected systems, and channel delivery to meet consumers where they are, smart and sustainable packaging, meaningful promotion, and thoughtful storytelling. Brands need to invest in emotionally led customer relationships with fervor. And with quick action steps, these brand shifts can keep the love alive in a market longing to reconnect.”
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