There was a time not so long ago, when consumers who wanted to purchase the latest gadget, toy, addition to their wardrobe or simply fill their pantry, would just make a trip over to their local mall or shopping center. Armed with our lists, we’d walk the aisles, sometimes seeking the help of an associate, make our purchase, and out we go!
Times have certainly changed for today’s once busy, now busily anxious shopper. Instead of sitting in traffic and allocating our time base on hours of operation, modern shopping and buying require not much more than a thought and a touch screen or voice command. These changes are further hastened by the COVID-19 pandemic, impacting how the IT organizations of retailers approach technology, which had already significantly changed supplier-merchant-shopper dynamic, has, in the blink of an eye, been transformed ever further, likely forever. HR teams also face new challenges, from economic impacts such as layoffs to the traffic and volume of customers in their stores driving safety considerations.
Life seemed so different just a few months ago, didn’t’ it? How different? For some insights, I reached out to Michael Forhez, Global Managing Director for Consumer Markets at Oracle to offer his insights on where the market is going and how retail HR teams can adjust to the new normal.
Q: Michael, retail has seen better days. From a high-level, where do you see things going in the next few months and beyond?
A: Essentially, COVID-19 shut down both economic demand and supply—simultaneously, creating an unprecedented “Black Swan” occurrence. Combined, Social Distancing and unemployment represent the most significant challenges to a now globally entwined economy.
For the US, retail sales in March declined by the highest month-on-month rate since record-taking began in 1992, down 8.7%, as about 90% of the US population was subject to varying degrees of “stay-at-home” or “shelter-in-place” orders. This combined with a 13.3% unemployment rate and 21 million lost jobs in May served as a one-two punch of uncertainty and worry for the months ahead. Even as we emerge from shelter-in-place orders, or try to, everyone is wondering what this combination of events will mean for shopping, eating out, just going out. In my mind, any return to normalcy, and with it, the consumers’ propensity to spend, will be dictated by a combination of when we get back to work and we feel safe enough to go about our lives.
Q: There are many workers on the front lines considered “essential” but who could be seen as at risk. What thoughts do you have on staff protection?
A: We could use a lot of ink on that question. Annie Gasparro of the Wall Street Journal, however, wrote a comprehensive article about a human resources staffer, Brook Burk, who works at the Kraft Heinz Co. macaroni and cheese factory in Missouri. A small number of the 1,000 or so employees can work from home. The rest are needed on the production line. As Ms. Burk stated, “We do need them here. We do need them to feel safe while we’re here. Because we need to keep getting that food out the door.” Hers is a rather fascinating story of innovation, grit, and dedication—of learning the unknown.
Because doors need to stay open, retailers must find ways to safely welcome customers while understanding the risks involved. In the past few months, many grocers have installed shields at their checkout stands to prevent transmission of disease when customers pay for their goods. We imagine that these shields will remain so long as there is no vaccine.
On the back-end, tracking the impact of COVID-19 for a particular retail branch is also important to maintain workplace health and safety. These include:
Q: As more individuals stay home, relying on e-commerce for their needs, how does this change the retail world, from hiring to being able to offer customers a meaningful customer experience?
A: You’re asking how this changes the brand/retail world, and the answer is probably profoundly. As of this writing, though, there is no manual, but what we do know is that physical retail space and customer engagement will have to be rethought, complemented by the promises of digital transformation technologies. New business models will have to evolve, the supply chain will have to be re-configured, business leaders will have to shift their strategic thinking from inside-out to outside-in models.
Considering technology utilization, we are already amid a transition to 5G networks, AI, ML, and data Insight-driven models—and this alone will change the rationale for supply and demand, to demand and supply. Stated another way, brands must make what they can sell … not sell what they can make. Retailers must buy what they can sell … not sell what they bought.
For leadership, managers, and employees at retailers of all sizes, this new normal presents an opportunity to embrace technology that enhances the end-to-end experience, including:
In short, everyone will need to learn, adjust to, and master the unknown—just like Brook Burk did.
As I’ve been saying for a while now; all hail the consumer!
As our understanding of the COVID-19 pandemic matures, retailers will no doubt be required to adopt new procedures for ensuring the safety and well-being of their associates and customers. Technology utilization will also need to adapt to this new normal, with vast and lasting commercial and social implications for years to come.
Given the high interest in this blog, then, we’ll continue speaking on today’s shopper, why and how they’re changing so fast, and what retailers and their suppliers might do better in supporting them.
In our next discussion, we’ll explore how one particular business—after closely reviewing their policies, platforms, and practices- found a way to continue profitably serving their customers, all while renewing their mission and sense of purpose.
Finally, we’d like to have your comments, and if you have a relevant story, please pass it along to Michael Forhez.
Thanks for reading. Stay safe, stay well!