Insights

Retail Solutions: Thriving Through The Pandemic And Beyond

UST Retail Solutions Team

Challenging times require challenging our assumptions. Very few of us have confronted the level of business disruption that we face today and none of us on a global scale. Overcoming and thriving through our current situation requires creativity, innovation, and a willingness to reinvent how we operate. In the first installment of our series on thriving through the pandemic, we set some expectations for how we will begin to emerge from state and local shutdowns as early as this summer 2020 and explore possible retail strategies for recovery. Our ongoing series will look at how we can expect continued changes in our public life to further impact retail operations in a total of five additional planning horizons: Fall 2020, The 2020 Holiday Season, Winter 20-21, Into 2021 and beyond, and Post Vaccine. The goal of these articles is to contribute to your thinking by exploring possible scenarios and how different consumer sectors could respond to those scenarios.

Summer 2020

Regardless of local, state, or federal decisions about “opening up,” there is no doubt that things will continue to be different for retailers and restaurants through the summer of 2020. Aside from potential regulations meant to slow the spread of COVID-19, reduced consumer confidence in stepping into public spaces will challenge business owners to rethink operating models.

Summertime will offer some benefits however over conditions in the coming fall and winter when outdoor activities in much of the country are curtailed by weather. Businesses considering how to operate during the summer of 2020 can think creatively about how outdoor space can be utilized to create safe and welcoming environments for shoppers and diners. Monitoring and sanitizing practices can also contribute to increased consumer confidence. Finally, continued promotion of online ordering with pick-up or delivery options will be necessary for those customers in high-risk categories or for those who are just more cautious about re-emerging from stay-at-home practices.

Businesses should anticipate managing facilities to accommodate four categories of guests:

1. Continued self-isolators -- Whether due to conditions that put them at higher risk or due to ongoing personal safety concerns, a portion of the population will elect to continue following stricter isolation practices.
2. Enhanced use of PPE -- Some number of our population will venture out into increasingly open businesses but will use personal protective equipment and have high expectations for use by employees as well as increased cleaning practices
3. Relaxed use of PPE -- An increasing portion of the population, in the absence of negative events, will take a more relaxed approach to their own and others’ use of personal protective equipment and have less concerns about cleaning practices. Local governments may have different expectations.
4. Eager for normal -- Finally, some portion of the population will be eager for business and society to return to a “normal” state, with some small number openly hostile to continued safety practices. In this last category, there will be little to no use of personal protective equipment and frustration with practices followed by businesses to protect employees or other customers.

Given the broad disparity of views by these different customer groups, businesses will have a challenging time satisfying everyone, especially where there are diametrically and sometimes hostile opposing views between individuals. Companies will need to carefully consider customer communications and policies for handling customer grievances through this time.

Despite those constraints there are a number of strategies for businesses to pursue to recover during this planning horizon. Companies must consider a number of dimensions in consumer behavior and expectation in making investments:

To what degree does the purchase decision rely on in-person inspection?

How much of the perceived value is experiential?

Where does the purchase decision fall on the range between considered to impulsive?

Is the purchase experience inherently social or solitary?

Would the purchase be considered essential or discretionary?

Can the purchaser afford a variety of options or is price a primary component?

Two businesses broadly providing the same good/service might find themselves in very different situations based on their answers to these questions. Both Target and Free People sell jeans and yet they have very different characteristics and thus would need to adapt to pandemic conditions in very different ways. E-commerce options, for example, are suitable for Target’s jeans which are largely purchased on price, as an essential item, and in a solitary shopping experience. By contrast, Free People will have much more difficulty replacing their shops with e-commerce because the shopping experience is much more social and the purchases discretionary, and, thus, an in-person-considered approach is essential to the purchase decision. The challenge will be for one to manage the tight margins and lead time expectations of customers from different online platforms and for the other translating the experience to a different platform or a providing in-person corona-safe experience.

With these distinctions in mind we can imagine a range of possible summer 2020 experiences and how businesses might accommodate the needs of their customers. How will you reopen and deliver on the consumer expectations that will allow your business to thrive despite the current challenges? Here are a few ideas:

Restaurants: Many US cities enjoy a summertime climate perfect for al fresco dining. And what better way to maintain social distance while still getting to go out and eat at your favorite local restaurants? Cities can create dining zones (perhaps streets closed to through traffic) and set up tables and umbrellas with sufficient distance to allow diners to sit with their close friends. Multiple local restaurants can receive mobile orders and deliver food and beverages using a shared fleet of food delivery robots.

Buying Goods: The customer journey is likely to include an increase in online research so companies should expect to invest in virtual tours and detailed videos to sway purchase decisions. Displaying cars and boats in outdoor showrooms is already commonplace; this practice can be expanded to other categories of goods that consumers want to touch and feel -- even appliances. Regular sterilization would be a requirement to reassure shoppers and video monitoring of the outdoor showrooms will quickly alert employees to locations requiring cleaning. Once a purchase decision has been made, home delivery will be a popular option for protecting both employees and purchasers.

Stores will be used as last mile/distribution hubs. Current low-technology pickup-at-store solutions now in place will be upgraded with more flexible solutions. Key issues for stores to address include notifying store employees of consumers arriving, using systems that limit physical engagement/contact with employees, and managing returns and reverse logistics. Solutions utilizing delivery robots and parking lots could allow multiple stores to serve a large number of shoppers with convenient store to vehicle delivery as an alternative to employees bringing goods to the curb.

Clothes Shopping: While online sales will continue to increase, a considered purchase in the apparel category often requires seeing and touching the product. Viewing items can be easily accomplished in environments that can be monitored for density of shoppers and cleanliness, but fitting rooms are unlikely to be open anytime soon. Companies will need to provide much more flexibility for shoppers to take items home, but be free to return them without restriction. There will be increased importance placed on processing returns, cleaning items for resale, and managing an accurate inventory as well as reconciliation of inventory across locations.

Grocery Shopping: Having experienced home delivery and curbside pickup, many consumers will be happy to continue using this alternative to in-store purchasing especially for commodity products. Stores will re-organize layout to optimize pick and pack of grocery orders, increasingly moving to robots to accelerate the pick, pack, and ship process to support higher volumes. When grocery stores previously designed layouts to make sure customers had to walk through snacks and drinks displays before they reach the milk and cheese, we may have to provide a shortcut through the store to manage maximum occupancy and customer preferences.

As our society continues to adapt to COVID-19 conditions, businesses seeking to thrive should prioritize scenarios that will address their own unique conditions and value propositions. The technologies described in the scenarios above are all available today from video analytics to delivery robots and virtual 3D video tours. Digital innovation coupled with public-private partnership can give us all a path to weathering the next stage of economic recovery as we continue to cope with the COVID-19 global pandemic.

UST’s Walk-In Walk-Out friction-less solution streamlines a superior customer experience by removing the check-out line. The technology behind this solution is a seamless integration of artificial intelligence (AI), sensors, edge technology, and video cameras working together to enable the core features. Customers enter the store by scanning the QR code in the mobile app, selecting items, then walking out, receiving their digital receipt in a matter of seconds. The amazing part about it is that such sophisticated technology can be installed and up and running in only eight weeks.

Looking for more information on the benefits of intelligent automation? Check out our report: How AI-Powered Automation Is Transforming Business Operations.

UST’s fully integrated and cloud-based UST Omni™ platform enables full transparency, an auditable trail, and deep-dive analytical capabilities, providing a complete and continual health check on your supply chain, sourcing origins, and vendors' performance.

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COVID-19 has irrevocably changed how society will operate, and that will be especially true for today's retail businesses. Our new Return to Work solution transfers best practices from healthcare industries and essential businesses to all organizations. Our solution can help your organization provide optimal safety and security for your workforce and customers, enabling you to thrive through the pandemic.

If you are interested to learn how we can help you overcome your current challenges and thrive with creativity and innovation, contact us today.