Building Brand Equity During the COVID-19 Crisis While Giving Something Back
January isn’t widely considered a prime time for shopping. Most consumers rather stay at home and deal with their holiday credit card hangover than capitalize on end-of-season sales. But this year was different.
Back in February, the National Retail Federation (NRF) reported that January retail sales had actually increased 2.7 percent over the previous year. The economy was strong, and consumer spending was higher than usual thanks to “solid wage growth and job gains.” The NRF even forecasted retail sales would rise between 3.5 percent and 4.1 percent in 2020 — assuming that the coronavirus didn’t get in the way, of course.
In hindsight, that was a bit optimistic.
On March 11, COVID-19 was declared a global pandemic by the World Health Organization, and no longer a nascent threat in North America. Now, it’s impossible to ignore. The majority of nonessential retailers have shuttered their doors, furloughed staff, and begun preparing for a future that will operate a lot differently than how they left it. COVID-19 has altered all aspects of the industry, and time-tested rules no longer apply. The coronavirus doesn’t care about your marketing strategy, how you source merchandise, or if you had proper order fulfillment processes in place. It’s no longer business as usual in retail, and likely never will be.
Retail leaders are struggling with what to do. The decisions they make now will ultimately affect how their businesses perform in the future.
“COVID-19-driven logistical challenges aside, this isn't a ripe moment to convince consumers to open their wallet for your products or advocate for your company,” wrote Forrester Senior Analyst Anjali Lai in a recent report. “The more trust consumers feel toward your brand today, the more willing they are to believe that your brand will put them first, even after the COVID-19 crisis passes.”
Thankfully, retailers can pivot their businesses strategically in response to COVID-19 while still building a ton of brand equity along the way. Whether staying open to provide essential goods and services or providing support to those in need, these retail leaders are pulling ahead by putting people ahead of profits. They fall into three groups:
Retail’s visionaries are just that — leaders that think ahead, even in a time of crisis. Unsurprisingly, it was the world’s biggest brands that made the right call early on, with human-centric messaging and initiatives that put their employees and customers first.
On Feb. 5, Nike closed half of its stores in China. As the virus jumped borders, the footwear and apparel brand shut doors elsewhere and promised to pay employees during the shutdown, helping slow its spread. Apple and Urban Outfitters would soon follow suit.
Despite being an essential retailer, Trader Joe’s set the tone for grocery stores by being one of the first chains to offer a paid leave policy in response to the outbreak, adding to a discussion about U.S. labor policies that persists today.
“While this may not be the right decision for every company, it’s the one where we feel we can make an impact,” Glossier founder Emily Weiss wrote on the company’s blog about her decision to close the burgeoning skincare brand’s four physical locations. “This is a time for us to remember our humanity."
Other retailers and brands should, too, even if it comes at a short-term cost.
Not all of retail is shutting down. Essential retailers like grocery stores and pharmacies remain open during this difficult time.
These days, opening early for seniors, implementing tighter health and safety protocols, and closing up early to re-stock and decompress is the new norm. A select few retailers are going the extra mile to serve the public better, offering everything from employee incentives to extra space for medical testing and charitable donations.
So far, CVS is offering drive-thru coronavirus testing services in Connecticut, Georgia, Massachusetts, Michigan, and Rhode Island that give results in 30 minutes and cost nothing to take. Walmart is committing $25 million to local food programs as well as efforts to identify and reduce COVID-19. And Kroger is donating $3 million to nonprofits Feeding America and No Kid Hungry to help alleviate child hunger. All three retailers also continue to hire the recently jobless and students out of school, and have even given cash bonuses ranging from $150 to $500 to their current frontline hourly workers. With business booming, top essential retailers continue to pay it forward, and customers are taking notice.
With less of a need for general merchandise, many retailers and brands are shifting their efforts towards manufacturing and sourcing materials to help keep frontline healthcare workers safe. Everyone from luxury house LVMH to Budweiser brewer Anheuser-Busch and independent distilleries are making hand sanitizer. And Inditex (parent company of Zara), Hanes, and other apparel brands are adjusting operations in their textile factories to make hospital gowns.
Even MGA Entertainment, maker of the popular Bratz fashion doll line and one of America’s largest toy manufacturers, has begun sourcing masks from factories overseas and is using its Little Tikes factory in Hudson, Ohio to create ventilator valves and protective goggles for hospitals.
Fashion designers Christian Siriano and Karla Colletto have also got in on the action, making masks for the general public. The fashion brands hope to make medical-grade gear that meets FDA standards for healthcare providers soon.
Retail in a Post-COVID-19 World
It’s a tough time in retail, to say the least. The COVID-19 situation is rapidly evolving. However, it’s no time for stasis or trying to maintain the status quo. Retailers must grow while constantly reassessing everything from their store operations to PR strategies to survive.
“During times like these, every interaction with your customers and partners is an opportunity to demonstrate what your organization is all about, and to be true to your brand and your purpose,” Deloitte urges retailers in a recent report. “People are paying attention to how organizations are responding, and purpose-based companies that show empathy will likely emerge as the leaders.”
Each day is an opportunity to connect with customers and show you care. Those that are strategic enough to respond to the circumstances swiftly — and understand how to execute a strong crisis management plan — will come out on top and gain something virtually priceless in the process: a better brand image and customer loyalty.
Marc Gingras is the CEO of Foko Retail, a communication platform for retail teams.
Marc Gingras is the CEO of Foko Retail, a communication platform for retail teams. He is a serial entrepreneur and angel investor, and sold his last venture, Tungle.me, to Blackberry. Marc holds an MBA from INSEAD, a MASc in Management Sciences from the University of Waterloo and a BASc in Mechanical Engineering.