How COVID-19 is transforming the retail industry and what retailers need to keep up with

BY Australian Retailers Association
27 July 2020

COVID-19 is responsible for two factors that are transforming retail operations.

The first is the extra workload associated with keeping colleagues and customers safe in your stores. This includes more frequent cleaning and colleagues managing queues and customer flows. The more you can encourage customers to adopt the appropriate behaviours, the less your team will have to manage. Changes such as having designated in and outdoors combined with a one-way route around the store can help. That is easier to do in a grocery type environment where the aisle layouts lend themselves to a clear track around the store. It is harder to achieve in a more browsing style layout, such as fashion and beauty stores.

Footfall counting technology is being repurposed to help stores manage in-store customer numbers and even monitor customer flow around the store to maintain social distancing. These solutions could help reduce colleague hours required to manage customer numbers.

The second factor is that customers are behaving differently as the rhythm of all our daily lives and our perceptions of risk have been disrupted by COVID-19. Most analysts expect that younger customers may quickly go back to normal and even predict a mini-surge of pent up retail gratification. Older customers, who remain at greater risk, may be more cautious and spend less time in stores and coffee shops than before. Some customers have become fearful of shopping centres and places where they may be in a crowd and may continue to avoid shopping in-store. If your customer base and their behaviours are changing, you will need to review how you operate and look for opportunities to drive up productivity.

Here are some top tips to help your operation keep up:

  • Match your stock levels to requirements – Excess stock creates more work in-store and with disrupted trading patterns, likely, you haven’t got the balance right just now. When stock exceeds the shop floor holding, it must be moved and counted multiple times. The ideal is for delivered items to go straight to the shop floor. Focus on having the right stock available for your customers and minimising any store stock excess by rapid sell through or recall.
  • Streamline counts – Evidence is that the more counts are done, the less accurate the theoretical stock file becomes. Can you stop all routine inventory stock counts? For lines that go negative on the stock file, auto-zero them overnight. Reserve your efforts for gaps and focus on making sure all lines are available for your customers.
  • Match team resources to demand – The trading pattern and workload in your stores will be different just now, so you tried and tested shift patterns and rotas won’t be right. Too many colleagues on duty reduce productivity and too few risks a sub-optimal operation and less time spent with customers.
  • Eliminate all non-essential tasks – Most retailers have ways of doing things that are an ingrained habit. Review your operation and stop tasks that take up time and don’t directly drive sales.

Remember, being productive is not just about cutting costs, it’s about doing more with your existing resources. The best way to improve your productivity is to sell more and in these times of change, there will be opportunities for creative organisations to take advantage of. For example, there may be subtle alterations in your sales mix driven by customer changes that create opportunities for new products and ranges. New ways of fulfilment are being adopted as customers change how they shop, for example, many retailers have extended Click & Collect, created drive-through options, and enhanced online ranges.

This challenging period will likely accelerate the move to becoming more agile and integrating multi-channel operations.

Written by Simon Hedaux, Founder and CEO of Rethink Productivity

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ABOUT THE AUTHOR

Australian Retailers Association

Founded in 1903, the Australian Retailers Association (ARA) is Australia’s largest retail association representing Australia’s $320 billion sector, which employs more than 1.3 million people. As the retail industry’s peak representative body, the ARA works to ensure retail success by informing, protecting, advocating, educating, and saving money for its 7,500 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.

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