The Year of Agility: No New Normal

This isn't another article about the “new normal.” Having been a retail executive during the pandemic myself, here's the truth: Normal no longer exists. What exists (and is emerging) is a range of new business models and revenue streams, vastly different marketing mixes, customer expectations evolving faster than businesses can pivot, and organizational change that hasn't been seen since the industrial revolution.

If the primary focus of retailers and brands in 2020 was survival, organizations’ agility and flexibility in 2021 is what will surely shape the future of the industry. From a global pandemic to the most intensive social unrest in recent history, and from stores shuttering overnight to an influx of online shoppers; if 2020 taught us anything, it's that you cannot have one plan for business success or one assumption about your customers’ spending habits. Retailers must create multiple paths to success with flexibility in their revenue streams and marketing plans. They must finally focus on the entire customer experience, not their own siloed version of what customers want. And last, but certainly not least, retail organizations need a complete overhaul in how they operate. If they fail to become nimbler, can’t act decisively, or believe that they're returning to pre-2020 “normalcy,” they simply will not survive.

Forces That Necessitated Agility

If we place all the fault of the industry’s turbulent time on a pandemic or events of the disruptive year that was 2020, we’d be wrong. Tariffs, store closures, shipping constraints, political and social unrest, and impacts of the pandemic exponentially sped up the way consumers (and the industry) were already shifting. What traditionally would have taken years occurred in mere months. The intensity of these factors also shined a spotlight on the areas of retailers’ businesses that were held together with duct tape. Many retailers were paralyzed in making real, significant change at the speed of their customers’ demands. But if you look past bankruptcies and store closures, the reality is that the last 14 months of chaos were exactly the forceful hand that was needed to push the retail industry to evolve into what it's meant to be.

In a discussion of the state of retail with Krystina Gustafson, senior vice president of content for Shoptalk, she told me, “Agility was once a strategic differentiator that helped retailers thrive; today, it’s simply necessary for their survival. The pandemic gave retailers newfound permission to test new technologies and business models without the fear of perfection.” She went on to say, “The retailers that thrive in 2021 and beyond will be those that maintain a crisis mentality and aren’t afraid to launch imperfect products — even when the threat of survival is gone.”

The brands that could respond to the needs of consumers in real time were exciting both as a marketer and as a consumer myself. Locally owned stores and nationwide chains tackled new ways to offer hands-free in-store or curbside pickup, utilized QR codes in new ways, reached customers through social media and connected TV, handled constantly shifting shipping delays, and pivoted product selection and inventory levels. They hustled to meet customers where they were and tested new strategies that pushed the industry light years ahead. However, while sprinting to shift as quickly as possible, any lack in their ability to plan dynamically could leave retailers misinformed.

Coresight Research shared with me that it sees the growth of online grocery as one of the largest consumer and industry changes accelerated by the pandemic. It was one that many retailers eventually adapted to, but definitely signaled the importance of agility.

Steven Winnick, senior analyst at Coresight Research, said, “We estimate that in 2020, U.S. online grocery sales grew 82 percent year-over-year as consumers hunkered down in their homes. In our weekly consumer surveys, even as most U.S. consumers move back towards normalcy, more than one in four consumers typically report shopping for food or beverages online in the past two weeks, indicating a major shift from pre-pandemic when online grocery ordering was more of a niche offering.”

Therefore, if agility and flexibility need to be rallying cries inside every retail and brand organization, what does this mean specifically as they're in the throes of preparing for the holiday season to set themselves up for success in 2022 and beyond?

Keep an eye on this space. I’ll spend the next few months getting into the details for a series of focused pieces with Total Retail that dive deeper into the fundamental areas that businesses need to diversify NOW if they're to continue to outlive and grow beyond their competitors. Specific areas of focus include:

• Flexible Revenue Streams and Marketing Mixes: Don’t have a flexible supply chain? Too reliant on manufacturing in a single country, a single shipping provider, or on wholesale partnerships to drive sales and customer acquisition? Watching your media budget evaporate into the pockets of Google and Facebook without reaching business goals? If any of these apply, 2020 was probably a tough year of learning, but you have every opportunity to strike the right future approach by shifting your revenue streams, customer touchpoints and marketing mix.
• Adaptable and Agile Consumer Experience: Whether you're on the "store is dead" train or believe the "store of the future" hype, let’s get practical with what the consumer experience needs to look like now across every channel, 24 hours a day. You're entering the age of the store as an enhanced service offering, and first-party customer data is your most valuable commodity.
• Cross-Organizational Agility: Simply put, if your retail and e-commerce operations are separated at the corporate level, you're creating stumbling blocks for your team that your competitors don't have. If your customer data is disconnected across channels, you cannot live up to customer expectations. If you're not reskilling and upskilling your employees right now, both at the store level and across your corporate team, you'll find your team outdated in the next 18 months.

The emerging reality of retail is dictating a strategy that includes diverse plans built around varying scenarios based on the fact that we can’t presume customers’ desires and habits to stay stagnant. Amid the pandemic-led shifts, consumers continue to expect seamless transactions and engaging experiences that are unlikely to revert to pre-COVID behaviors. Incremental and foundational shifts will enable retailers to lead with agile-first businesses decisions, affording them the luxury of nimbly combating the unknown for years to come.

Sarah Engel is the chief marketing officer and chief people officer at January Digital, a digital leadership company that solves business challenges through media, analytics, and strategic consulting.