The last 12 months have been incredibly difficult for the retail industry, but it has been extraordinary to witness how retailers responded to the Covid-19 pandemic.
They say necessity is the mother of invention and around the world we have seen innovation, accelerated decision making, and a willingness to be bold and take risks.
There’s the rapid deployment of new ecommerce, and fulfilment solutions in response to lockdown and store closures. US retailer Dick’s Sporting Goods is a prime example. Within 48 hours of its stores closing, Dick’s had modified its in-store click-and-collect model and launched contactless kerbside pick-up.
In the new model, customers drive to their selected store and check in remotely by phone. A Dick’s employee comes out and places the goods in the boot while the customer remains in the car. This new solution accounted for more than 40% of Dick’s ecommerce sales early in the pandemic.
Closer to home, B&Q quickly transitioned its centralised ecommerce operations to an in-store picking model. It introduced drive-through, contactless pickups, and extended home delivery with shorter delivery times, direct from 56 digital hub stores. The initial click-and-collect solution was put in place in days, in direct and immediate response to customer needs and social distancing restrictions.
We’ve seen retailers quickly repurpose stores. Early in the pandemic, Whole Foods Market turned a handful of US sites into dark stores to meet a surge in online grocery orders from Amazon Prime customers.
While some conversions were temporary, it went a step further in Brooklyn, New York in September 2020 by opening its first store designed solely for the fulfilment of online orders. Other retailers have taken the bold decision to close stores altogether, recognising that at least some Covid-era changes are here to stay.
More pick-up and drive through experiences for customers
A month after the first lockdown began in the UK, Dixons Carphone launched its ShopLive service, allowing customers to speak via video to experts from stores. Hugely successful with customers, the innovation has expanded rapidly. Other retailers have followed suit with their own versions of live shopping, video consultations or streaming.
The food service sector has been dramatically hit by Covid-19, but here too we see rapid response and innovation, with players adapting menus, offering enhanced pick-up and drive-through experiences, embracing delivery, and deepening digital customer relationships.
In the US, McDonald’s initially limited the range of items on its menu to fill drive-through orders more quickly. In the UK, Domino’s Pizza removed difficult-to-prepare items such as stuffed-crust and customized pizzas.
We see the same innovation and speed in the way that retailers have adapted internal working practices. Retailers were talking about increasing workplace flexibility pre-Covid, but few had wholesale work-from-home policies.
Almost overnight, many moved to a WFH model for central roles previously deemed office-only. And it worked. Some retailers are now beginning to think about substantially different working models for the post-pandemic world. Last month, US retailer Target announced that it would move towards a “hybrid model of remote and on-site work, allowing for flexibility and collaboration and ultimately, requiring less space”.
What’s remarkable here is not the innovations themselves - the best retailers have always innovated on behalf of customers. It is the speed and the boldness of the innovation. Decisions that would have taken months have been taken in weeks or even days.
Formal and cumbersome meetings with too many attendees have been replaced by small teams that meet regularly and are empowered to make decisions. A tendency to agonise over all elements of a possible decision has been replaced by a willingness to test and learn.
From five decisions a month to five a day
Several retail leaders have told me how the crisis has liberated their decision making. One now meets his cross-functional leaders every day for 30 minutes. They used to make five big decisions a month - now they’re making five small ones a day.
Whether they call it this or not, retailers are becoming more agile. Stimulated by the crisis and the sense of urgency, they are designing and deploying innovations to customers and employees far more rapidly. Their leadership teams are meeting more frequently, focusing on the most important things, acting decisively and shifting the organisation to meet evolving priorities.
It is critical for retailers to embed these new ways of working as standard — to avoid returning to business as usual as the sense of urgency fades away. The Covid-19 crisis will eventually abate, but disruption will always remain.
Retailers that take steps now to become more agile not only increase their chances of weathering the storm but will position themselves to thrive in the years ahead — no matter what the next unforeseen challenge may be.
1 Reader's comment