INDUSTRY VIEW
Retail
Apparel • Office Supplies • Gifts
THE NEW NORMAL
What Has Changed?
1
Reduced Capacity
With social distancing measures, stores will not open with full capacity.
2
Customer Safety
Customers will likely spend less time in-store and travel less frequently, opting instead to buy more in one visit.
3
Increasing Appetite for E-Commerce
Consumers will continue to shop digitally after the crisis stabilizes. Online shopping rates will stabilize at much higher levels than they were previously.
4
Client Loss
Retail industry revenue is anticipated to decrease by at least 3.3% in 2020 (IBIS World).
5
Contactless Shopping
Concerns over contracting the virus will push omnichannel retail models into the spotlight. Examples of these models include: Buy Online Pay In-Store (BOPIS), Home Delivery, Curbside Pickup
6
Extended Periods of Value-Consciousness
Consumer confidence has been strained, leading to greater price sensitivity and lower discretionary spending. To stay competitive, many brands have to alter pricing, promotional, and value strategies.
7
Buying Local
There is a growing preference for locally sourced and manufactured goods as consumers strive to support local businesses so that they remain in business.
8
Excess Inventory
Retail businesses order merchandise well ahead of schedule to ensure restocking seasonal inventory. As most retail businesses were considered “non-essential,” retailers are left with a large quantity of unsold inventory built up during the quarantine period (March - June 2020).
9
Wholesaler and Distributor Challenges
With reduced demand in retail and disruption in both domestic and international supply chains, many wholesalers and distributors are struggling to garner enough revenue to sustain overhead costs.
RECOMMENDATIONS
How Should I Recover?
PHASE 1
Onset
Go Online
- Create an online website detailing the company’s mission, products and services, as well as ways to contact the business.
- Launch an app with options to browse products, order online, register as a member, and acquire rewards.
- Establish social media channels and the goals and purposes of each.
- Facebook: general business background, communications, and updates.
- LinkedIn: professional networking.
- Instagram: feature products and promotions
- For some more online tools and tips, visit the Digital Tools page.
PHASE 2
Oscillation
Ensure safety measures
- Ensure proper sanitary measures for employees and workers.
- Try adjusting operations to reduce risk of infection by increasing private appointments, implementing one-in-one-out, and expanding working hours
- Create best practices for employees, such as providing regular health checks, hand-washing protocols, and Personal Protective Equipment (PPE) for staff. Conducting weekly meetings to discuss safety precautions is also encouraged.
Adopt new business models
- Offer models such as curbside pickup, home delivery (local), and “buy online, we ship” to reduce exposure.
- Sell products online on the website.
- Enter e-commerce platforms. Register on the platform that best fits the business’ products and brand. Some examples of popular e-commerce websites are Google Shopping, Amazon, Wish, Etsy, Shopify, and Faire.
Try new payment systems
- Offer pre-ordering and mobile payment systems such as Square Pay.
- Register on online platforms such as PayPal and Stripe.
- Try contactless payment systems, such as “tap-and-go” with a debit, credit, or store membership card.
- Open new types of store membership cards and gift cards that offer rewards and perks for continued use (Customer Loyalty Programs).
Revamp sales strategies
- Create bundled products.
- Package products along with services.
- Try “Do-It-Yourself” step-by-step kits for products. This can increase customer engagement with the products as well as save costs on packaging, shipping, and delivery.
- Offer special promotions such as limited-time sales to encourage customers to buy more for less time.
- Encourage purchasing gift cards for special deals. There have been several initiatives launched specifically to help small businesses procure cash during the pandemic. Register for online gift card marketplaces on the internet.
- Partner with subscription and monthly sampling boxes. Although they cannot be a steady source of revenue, they can be sources of additional revenue and a unique way to market products to established target markets directly. They can also be a low-cost, low-risk way to launch and test new products’ popularity. Some subscription boxes tailored for small businesses: StartupStars, Business Book Monthly, Explore Local Box, Handshake31, and LifeBox Supply Company. Other sources of subscription boxes include Ipsy, FabFitFun, and CauseBox.
Know your customer
- Work with online data analytics software to learn new trends in customers. Utilize search engine optimization, keyword bidding, emails, newsletters, and other marketing campaigns to track changing customer behaviors. Some tools small businesses can use for data analytics are Google Analytics and QuickBooks. Also, explore the Marketing Tools page for additional resources.
- Collect customer feedback. Encourage customers to share their thoughts and leave reviews. Gather comments from reviews on websites like Yelp and Google Reviews and analyze the findings.
- Launch a survey to gather data in-house. Some commonly used survey tools are Qualtrics, Google Forms, Survey Monkey, and MailChimp.
Reorganize supply chain
- Secure demand for non-discretionary goods.
- Redirect inventory via backup routes in case of disruption.
- Hire or add inventory management to current employees’ responsibilities.
- Expand delivery services and timeframes.
PHASE 3
Opening
Invest in the “shopping experience”
- Virtual fitting rooms enable customers to try on clothes and see how they look before purchase.
- Augmented reality can help customers see how furniture looks in a room.
- Camera filters for makeup and cosmetic products have grown in popularity.
Rethink brick-and-mortar space
- Brainstorm ideas to utilize space for renting real estate.
- Consider mergers or partnerships with other companies. Stagger operating times with other businesses.
- Change the layout of the store to reduce inventory and instead include images of products and QR codes to purchase online. Customers can discover special coupons and deals while maintaining the shopping experience. Business owners can have more flexibility with inventory, and more space for customers to shop. Hence, reducing the risk of overcrowding and infection.
Technology
Tools to Adapt
Mobile Payment Systems
Offer options to purchase online or by phone. Square Pay enables customers to pay and tip via phone and processes credit cards, gift cards, and cash. Other platforms include PayPal and Stripe.
Tap-and-go Payment
Contactless payments that allow a customer to tap a debit, credit, or membership gift card on a payment terminal can enable faster transactions and reduced exposure.
Augmented Reality
Use augmented reality in place of a fitting room for clothing, camera filters for makeup, and testing out how furniture looks in a room.
Useful Industry Resources
Find More Ways to Help You
Google Retail Guide
Google released a guide for COVID-19 recovery to help retail businesses navigate the changing dynamic.
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