Thinking about a store reopening implies making big changes. Retail experts offer some recommendations to be prepared.
10 RECOMMENDATIONS FOR RETAILERS during reopening season.
The global problem generated by the COVID-19 pandemic has impacted the retail sector in a way never seen before and, in view of the imminent opening of stores, it is better to be well prepared. Companies will need to be vigilant in order to make quick decisions, be flexible, and process and design strategies that adapt to their realities and context. Technology, anticipating and being efficient in our management will be determining factors.
We face an uncertain store reopening scenario. The remainder of this year and the first months of 2021 will undoubtedly be a period of dynamic changes, in which physical sales channels will be affected, but so will the way of consumption and business models.
1. Make a diagnosis
Before any crisis we should always stop for a second to think and be able to answer the following questions: What do I estimate the impact will be? What do we need to analyze? Where are we? What is the first or next thing I have to do?
2. Make decisions according to the cashflow
Cash flow is the great ally for the survival of the company and its management, and it will be our main control point. Projecting cash flow will be vital to be able to make decisions in the medium term, to have a future perspective and to rethink those decisions.
3. Rethink the business plan and invest in technology
We must be cautious in making decisions, operating with precision to ensure interventions that do not penalize the evolution of our company after reopening. Retailers are prioritizing ROI and measurable business impacts. To do so, it is essential to maintain investments that bring profitability, both for short-term benefits and for decision making. This growing technological investment is driven by the need for retailers not only to minimize risk and costs, but also to improve business results, and this involves implementing data analysis tools, artificial intelligence, e-commerce platforms, etc.
Small and medium-sized retailers will seek to differentiate themselves from the big e-commerce giants such as Amazon in order to coexist profitably. The commitment to this technological evolution will allow the Retail sector to continue to grow by focusing on new digital possibilities, making use of advanced analytics and technologies such as Artificial Intelligence to manage stocks and collections, segment customers and better understand their behavior and needs.
These technologies will help them make more strategic decisions and predict and drive results to measure their digital transformation and the impact on their business.
4. Managing Inseason Stock
A major aspect of our management is product selection and its correlation with promotional strategies. The calendar today is profoundly modified, as consumers are at home, spend as little as possible and the concept of seasonality is almost non-existent. But, initially we can focus the selection on two basic aspects:
- Products that I can reconvert, and therefore do not need to sacrifice margin today as I expect to be able to maximize profit over a longer time frame.
- Non-reconvertible products that generate pressure on our pocket, as every day they reduce the possibility of maximizing the contribution. At this point it is advisable to classify our products by cost overrun scales and by objective option, which will help us to prioritize on which items we should intensify promotional pressure.
5. Re-plan production
We must also rethink the structure of our collections, understanding that our consumers currently have a more conservative, savings-oriented mindset. It is clear that the need to stock products in our collections will be less, as well as having products with a high seasonal load, at this time it is preferable to be cautious and remain short of stock, rather than generate higher levels of surplus.
6. Becoming an omnichannel brand
We must be able to communicate, sell and build customer loyalty through all channels, taking into account that an interaction that began in one channel can continue in another without losing its quality. It is key to offer our products through as many channels as possible so that our consumers can choose which channel they feel most comfortable buying through.
7. Explore Digital Channels + e-commerce
Betting on digital channels means an increase in traffic, the possibility of establishing our customer networks, taking advantage of the consumption footprint left by our customers, and the possibility of using the digital channels as a means to increase the quality of our products and services.
In addition, we must create indicators that help us evaluate the return on the investments we are making to promote the digital channel. It is clear that at a time of cutbacks we should not do without investments that help us to improve our digital channel, but it is important that we know how to make them profitable
8. Rethink customer service
The reopening of physical stores will find us with a decrease in visits due to health precautions, decreased customer tolerance due to the scenario, lack of tourism and greater focus on savings, among other factors.
The store should be identified as a hygienic and safe but fun place, focusing on the shopping experience and the promise of value that only the customer service staff can provide.
9. Train staff in sales
In this new scenario, when it comes time to reopen for business, conversion will be vitally important. That is why it is essential to have qualified and motivated staff that can convert each visit into a sale.
In addition, as it is expected that there will be a low flow of people, trying to increase the value of the sales ticket and advising the customer to reduce returns will be key resources.
10. Keep an eye on the competition
While it is true that we are facing one of the stages with greater collaboration between companies, when all this happens we will face scenarios where price competition will be very strong. The market will be collapsed with promotions that will make the concept of opportunity lose strength in our consumers. We must be more vigilant than ever about what the other person is doing.
This information comes from a recent webinar organized by AnalyticAlways with the aim of collaborating with the retail sector. The meeting was called “A new Stock Management, Cash Flow and Innovation”, and was attended by 6 executives from important Retail companies from Argentina, Colombia, Spain, Mexico and Peru who shared their experiences and ideas to go through and overcome this stage, and create new opportunities.