The last nine months have been surreal. And no matter where your politics lie, the impact on how we live, work and shop is undeniable. So, what is coming next for retail as COVID-19 vaccines become more readily available?
In these last months we have gotten comfortable being at home, shopping online and rationing toilet paper. We have all figured out how to co-exist as we share the home office space with our kids and spouses who are now all working and learning online. Masks…everyone has a drawer full at home and several hanging in the car. It all seems strangely normal now.
With the announcement of vaccines ready to be distributed in the coming weeks, can we start to envision life as it was before COVID-19? It is hard to get too excited with positive cases on the rise, yet we are all hoping the “old normal” will soon be possible again.
The Impact of Online Shopping
Online shopping has surged to 30 percent over these past months and it appears it is here to stay. If you did not shop online before the pandemic, you were forced to extend your shopping experience to include online for basics like groceries and home goods, clothes, fitness equipment, entertainment and more. From Black Friday to Cyber Monday retail experienced record online sales.
While online shopping has been ideal for getting us through these difficult months and now for the holidays, we are still seeing large disruptions in the supply chain. Most everyone shopping online is receiving notifications about delayed deliveries…even from Amazon. The holiday season will continue to challenge an already bogged down distribution network. The news is reporting about UPS suspending picks ups and large transporters like XPO at capacity. We still see bare shelves at the grocery stores for essentials and there are products that are still not available after all these months.
Retailers who did not have a strong online presence before COVID-19 are quickly trying to create one. There is a solid correlation between retailers that survive and those that fail based on their capabilities for online shopping. During these pandemic times, retailers must be able to service online customers by providing options such as curbside pick-up and delivery. Those unable to offer these services are suffering, and some have gone into bankruptcy.
When the shutdowns lighten up, industry experts believe there will be a pent-up demand for retail store shopping. The “hands on shopping experience” will once again be alive and well. It is a social experience that Americans love … and have missed.
Planning for 2021
Despite the pandemic, the economy, including retail has come back strong in the third quarter. The fourth quarter, with the news on vaccines, is estimated to be a “V” shaped recovery positioning retail for a positive holiday season and a strong start to 2021. Those retailers who have survived will be positioned to be stronger and smarter in 2021 as consumers return to the retail store for shopping and socialization. Product selection may need to evolve with most working adults in home offices. For example, retailers will need to adjust by buying fewer dress shoes and more casual shoes. Demand signals will need to pick up on product preference trends and be modified. Pricing strategies for retailers will need to be created to preserve margin but also entice shoppers to spend.
Promotions need to be seamless between brick and mortar and online. Shoppers can become promotion weary. The importance of smart and timely promotions is greater now than ever before with inventory harder to come by and customers still in search of real value.
Software companies that have introduced Machine Learning and Artificial Intelligence are positioning machine smart solutions to help retailers plan, promote and deploy inventory with greater insights. Retailers will need to cleanse their demand signals from 2020 for 2021 to not over or under plan for 2021 inventory planning and deployment.
There have been two directly opposite situations in the COVID-19 season. The first includes retailers considered essential or offering products in high demand and are struggling to get products on their shelves. Then there are retailers who were completely shut down with zero sales and have a glut of last season’s product to promote and sell for the best margin they can get. Cleansing the demand signal to plan 2021 business can be complicated based on the tools the business is using.
A key to success in 2021 will be better communication with vendor partners. Paperless collaboration is available today and simplifies shipment planning, changes and overall communication with key suppliers. Some of these vendor collaboration and compliance solutions only tell you about the delays in delivery. Others give you options to make needed, timely changes. In either case, retailers have opportunities for better visibility to their supply chain and may be prioritized by their vendors based on their ability to seamlessly communicate and participate in supply chain decisions.
Trust in a Partner
It may take some creative guidance from a trusted consulting company to help determine how to maximize online offerings, what machine smart solutions are right for your company and the best tools to improve inventory, demand planning and vendor relations.
The retail and wholesale industries have turned to RPE since 1999 to provide services and solutions to improve the bottom line. For further information on any of the topics discussed in this article and ways to address your specific needs, please reach out to RPE Solutions