But amid the tragedy lies an opportunity to come back better and brighter. “Fashion was already past its tipping point from a sustainability standpoint,” says Jill Standish, the senior managing director and global head of Retail at Accenture. “Changes in purchase behavior, an excess of stores, lack of digitalization and outmoded seasonal models were crashing parts of the system. In our view, the pandemic merely accelerated the requirement for retailers to address the challenges — and there are many.”
Here, Standish talks to WWD about how brands and retailers can swiftly and strategically reimagine, rethink, and restructure, all while remaining competitive in a post-COVID-19 world.
WWD: How can retailers remain hopeful and proactive with an unknown, uncertain timeline during the pandemic?
Jill Standish: There’s no question that COVID-19 will reset the consumer/retailer relationship. Retailers that have gone above and beyond to serve their customers are likely to be rewarded with greater trust and loyalty.
Now is also the time for retailers to pause and ask themselves: How can I use what’s happening to reimagine my stores? To prepare to reopen their doors, retailers need to make swift decisions to reset their store ecosystem. Using analytics to optimize the number of stores, store formats and store operating costs is critical to competitively reopening. Additionally, retailers need to be agile and continuously evaluate their strategy based on emerging data and trends, to outmaneuver the next wave of change.
Further, online retail will likely see a permanent step up in popularity. For instance, more than half of respondents in an Accenture survey carried out last month said they are likely to increase their usage of voice-enabled digital assistants, online recommendation apps, self-service apps, intelligent home devices and wearables. This is a huge competitive advantage for those retailers with advanced digital capabilities and an opportunity for all those that can adapt quickly to grow the business through digital commerce.
WWD: Would you elaborate on some of the digital commerce capabilities retailers can leverage throughout this crisis?
J.S.: Investing more in existing digital capabilities — such as improving the customer journey and the broader customer experience — should happen alongside pioneering new ways of engaging with consumers online. Live-streaming services, omnichannel inventory visibility and social commerce platforms is just the start.
There are some steps that all retailers can take now to get ready for a permanent shift to more digital commerce. By carefully assessing five core parts of the business: marketing, the digital ecosystem, assortment, the supply chain network, and bricks-and-mortar stores, retailers can identify the strengths of each as well as the areas for improvement.
- How strong is our digital commerce marketing strategy? Optimizing a retail business for digital commerce needs an integrated and customer-centric approach to marketing. Consider the fact that during COVID-19, consumers are spending much of their time online — consuming digital. To be relevant, brands need to shift their spend to where the consumer is. This strategy needs to treat marketing as a driver of growth with a central role in creating a seamless end-to-end customer journey. Automation and artificial intelligence can play an important part in delivering these kinds of hyper-relevant campaigns across channels.
- Will our digital touch points scale? Consumers have formed new habits due to quarantine. This will likely continue post-COVID-19. Digital will be an integral part of a brand’s post-quarantine channel mix and central to driving future customer lifetime value. But to do this right, digital consumer touch points (mobile channels, social channels, visual search and voice shopping) need to be configured to support intuitive and seamless experiences at a much greater scale.
- Is our product range “liquid”? Forecasting and assortment planning have fundamentally changed. Retailers can’t plan demand based on last year’s insights given the shift in essential versus nonessential product sales. These will remain difficult to predict in today’s environment. Being prepared for this kind of uncertainty means retailers need to have a diverse and agile network of suppliers as well as strong visibility into the supply chain. Today, more than ever, technology can play a role. Looking at data from various sources to truly understand localized demand and using this insight to tailor the assortment will be key. Retailers and brands that will be most likely to succeed will be those that can forecast demand and that have the ability to move inventory to where the demand is — in real time.
- Can the supply chain support the pivot to digital? Future retail will require a multichannel supply chain network with different facilities for different product segments (including regional centers and metro hubs as well as third-party solutions). Last-mile delivery platforms that can optimize routing and rerouting while providing real-time tracking will also become a baseline requirement.
- Are our stores prepared to play a different kind of role? During and after the COVID-19 pandemic, the physical retail store network needs to be tightly integrated into digital fulfillment capabilities. Dark stores should be used for curb side pickup as well as hubs for same-day or next-day deliveries.
WWD: How can retailers prepare for post-COVID-19? And what about smaller and relatively young businesses?
J.S.: While the full impact of COVID-19 is unpredictable, one thing is certain: The economic fall-out is going to be profound. Cash flows are at risk and credit markets are tightening all the time. Finding new ways to reduce cost as well as partner with vendors, suppliers and peers could help to strengthen resilience across the ecosystem and enable organizations to respond with greater agility and speed to any future disruptions.
Priorities here include identifying real cost reduction opportunities that can be activated now to preserve cash for the future, investing in systems to rewire the supply chain. The objective? Creating a truly “smart” supply network.
It is also worth remembering that some retailers will only be part way through their journey to digital commerce. Many will need to revise their operating models as they pivot from their traditional revenue centers to new online services. Plus, launching those services will likely incur a higher operating cost structure in the short-term and will typically dilute profitability unless the broader cost base can be reduced.
WWD: Do you foresee any major changes regarding retailers’ future investments in sustainability? Might retailers that previously invested in sustainability take a step back as a result of financial strain?
J.S.: Fashion was already past its tipping point from a sustainability standpoint. Changes in purchase behavior, an excess of stores, lack of digitalization and outmoded seasonal models were crashing parts of the system. In our view, the pandemic merely accelerated the requirement for retailers to address the challenges — and there are many.
Sustainability needs to be part of the reset strategy. Now is the moment to adopt the environmental, social and governance (ESG) practices that will allow a company to thrive again. Retailers are in a powerful position to make changes that drive sustainability across functions while enabling a profitable future. Having a deeper level of data insights will inform and accelerate these decisions and set a foundation for understanding and measuring the impact of decisions going forward.
WWD: Is there any other advice you can share for retailers and small businesses in crisis?
J.S.: Most large retailers and small businesses quickly made decisions to shut down their corporate headquarters, moving to remote working for all corporate staff as well as call center employees. They also had to quickly modify to ways in which they would serve consumers for safety reasons, for example, store layout or other services for pickup and delivery. This kind of speed and agility in decision making will be just as important as we move into the next phase.
Analytics can help support the fact-based decision making needed to rethink and restructure teams, how they work and to ensure they can acquire necessary new skills. Machines and people working together will likely become a much bigger feature of retail operations. To make the most of this dynamic, it’s essential to build automation and AI around people, rather than the other way around.
We may never go back to the “campus” life that many companies established. Working remotely and providing a safe environment for employees and for consumers will be important for businesses of all sizes for the foreseeable future.
For more Business news from WWD, see: