5 Strategic Imperatives for Retail’s New Normal
As stores reopen and people return to work around the globe, it's evident that the retail landscape will be different, perhaps permanently. COVID-19 has changed consumer behavior in stores, and CPG companies and retailers need to create new strategies to maximize potential and respond to the evolving needs of their customers. Brands and retailers must consider the following strategic imperatives when structuring plans post-crisis.
1. Understand new shopper behaviors.
COVID-19 is reshaping the retail industry in real time, and habits formed now will likely stand beyond the crisis. Shoppers are buying more products per visit and making fewer visits overall, and online shopping to stock pantries has increased. By exploring these changes, CPG and retail businesses can prepare for what’s next. They need to understand how their customers are reacting and develop customized marketing and sales strategies accordingly. Each region, store and shelf offer opportunities to reach consumers where they are with a unique approach for each. Companies that continue to offer a one-size-fits-all approach will fall behind those that are able to proactively meet the needs of their customers.
2. Integrate data and analytics.
Time is no longer a luxury, making it critical that retailers and brands accelerate their adoption of a data-driven operating model to keep up with evolving consumer behavior. Incorporating technology and digitizing the physical shelf can help retailers understand store conditions, track inventory and product performance, predict store traffic, and replenish shelves at speed and scale.
Leaders will integrate analytics and digital training to better forecast demand, identify potential disruptions, deploy resources where stores need them most, and quickly determine the effectiveness of their sales strategy.
3. Redefine the role of the store.
Manufacturers need to redefine the role of the store in their sales strategy. More than ever, stores need to offer tailored customer experiences that drive consumers to choose their products at the shelf. To drive agility and flexibility, CPG companies need to collaborate with retailers to maximize in-store opportunities. When manufacturers have a line of sight into the performance of their products at scale, they have greater opportunities to respond to shopper needs. To maintain shopper traffic, brands must focus on perfecting the in-store experience and have an intimate understanding of customer preferences to execute necessary changes to store formats, displays and promotions to keep shoppers engaged.
4. Laser-focus on shelf inventory management.
Panic buying and stocking up on essentials led to empty shelves at an alarming rate. Retailers struggled to keep products in stock and CPG companies had difficulty producing some products fast enough, like toilet paper and hand sanitizer. Traditional methods for forecasting inventory use sales and scan data, which works well in a normal buying environment, but proved to be flawed when shopper behavior changed so radically. Better real-time data from stores about what's happening at the shelf could help solve supply chain issues and provide an early warning system to predict rapid depletions of inventory.
Shifting from sales scans to real-time shelf data monitoring at the SKU level across retailers is the best way to create a proactive inventory strategy. Closely monitoring what's in stock on shelves also helps brands prioritize core products upstream to ensure an agile production strategy.
5. Rethink the workforce.
With many workers forced to stay home, massive layoffs and store closures, the pandemic has caused a dramatic disruption in the workforce. Although stores are reopening and people are returning to work, retailers should reshape their workforce to support the new normal and have an action plan for future disruptions. Instead of siloed workforce models for planning, distribution, merchandising and sales, companies need to rethink the entire workforce composition.
This could include enabling front-line workers to perform additional tasks, like in-store merchandising, data collection and inventory management. It may include bringing “gig” workers into the workforce to perform store-level tasks during surges. Companies could expand front-line workers’ skillsets and mobility to enable them to execute new brand tactics rapidly and at scale. Companies could also digitize and automate high-cost store management activities like shelf audits, planogram management, and in-store merchandising.
Ultimately, the crisis has escalated the case for taking decisive action to improve retail execution. To thrive post-crisis, retailers and manufacturers must focus on customer needs, redefine their store strategy, enable their workforces, and integrate technology to accelerate access to information that will drive sales and keep products on shelves.
David Gottlieb is the managing director, Americas at Trax, a leading global provider of computer vision-powered in-store execution solutions, analytics and services for retail.
David Gottlieb is the Managing Director, Americas at Trax, a leading global provider of computer vision powered in-store execution solutions, analytics and services for retail. In this role, David oversees strategy, sales, marketing, business development and customer success for Trax in North and South America.
With more than 20 years of experience focused in and around retail and manufacturing technology, David is a proven leader in CPG distribution models, brand marketing, trade marketing, store operations, merchandising and the deep complexities of supply chain. He uses this extensive knowledge to support Trax’s end-to-end solutions for retail, understanding the intricacies of what it takes to bring a product to the shelf and ultimately succeed.
Prior to joining Trax, David was President and COO of Quri, a leader in crowdsourced
in-store conditions data for the CPG industry. Before Quri, David served in leadership positions at Market6, Netezza, Oracle and Accenture. David has cultivated deep relationships from years of working with key players in the industry, including Nielsen, Bain & Company, National Retail Federation, Consumer Brands Association (formerly Grocery Manufacturers Association) and Food Industry Association (FMI).
David graduated with a BA in Psychology from Johns Hopkins University.