How retailers have been innovating in the midst of difficult economic times
It’s been 168 days since the start of lockdown and the country is slowly adjusting to the economy opening up and restrictions being lifted. Five months of lockdown have radically altered consumer behaviour. It is not only personal priorities that have been reassessed, but imposed forays into eCommerce have changed shopping habits. These changes have in turn had a ripple effect on logistics and supply chain management.
The retail industry has been among the hardest hit during this crisis, as people have been homebound and had their spending curtailed due to income insecurity. According to Statistics SA, household spending in the first quarter slumped by 49,8% in line with the closure of hotels, restaurants, transport services, recreational facilities and many stores. However, according to the FNB/BER Consumer Confidence Index (CCI), consumer confidence has increased from -33 to -23 in the third quarter.
The crucial question retailers need to ask during these difficult times: “How relevant is my product or service now, and how does it fit into a changed consumer mindset?”
The comeback kid
When news broke that Kodak won a $765 million government loan to produce generic pharmaceutical ingredients to fight the coronavirus, their share price skyrocketed. Kodak is pivoting their business to pharmaceuticals, as are many other brands who are finding that their product or service to be irrelevant
Zappos is now selling single shoes and mixed-size pairs for people with physical differences. The Single & Different Size Shoes Test is aimed at amputees, those with differing foot sizes, and others who have been neglected by the footwear industry until now. An increasing number of retailers are beginning to cater for the needs of niche consumer segments.
In spite of physical stores reopening, many consumers are yet to feel comfortable enough to venture out of their homes after months of being careful. The stores are open and ready to trade but consumers are still reluctant. Balmain has created a digital showroom replica of their Paris HQ. The showroom features virtual muses and giant projectors, alongside a 3D avatar of Olivier Rousteing, their head designer. Retailers are attempting to recreate the in-store experience that their consumers have been missing.
Food delivery platform, iFood, is about to start using a hybrid approach that includes both drones and last-mile ground transportation in Brazil. This approach will allow food to be delivered much quicker than traditionally. Retailers have had to reevaluate their supply chains and find alternatives to suppliers that are located across borders.
Re-opening for business is no longer a guarantee of instant recovery. Too much has changed: thriving businesses have had to close, approximately 3 million jobs have been lost in South Africa. Consumer mindsets as well as disposable incomes have shifted. Supply chains have been altered and new communication channels have to be navigated.
Flux Trends is hosting three interlinked masterclasses, all of which are key to reviving or re-thinking business models. This applies specifically for B2C companies and addresses the challenges that will play out in the next six to nine months – a crucial period for business survival and recovery. The first masterclass focuses on the retail sector. Retail experts from diverse professional backgrounds will share their insights with you on how to move forward with your business. Pose a question to one of the retail experts and have them answered during the session. If you would like to know more about navigating your retail business, book your ticket to this unique masterclass.
Article Source: https://www.iol.co.za/business-report/partnered/retail-business-as-unusual-395f979e-7014-4751-a9d0-bd6e40c74626