June Webinar Series: RISE Again Retail by the David Sobey Centre for Innovation in Retailing & Services
By the David Sobey Centre for Innovation in Retailing and Services, a research centre at Saint Mary’s University.
We may never go back to retailing as we knew it. The pandemic has shifted consumer behaviour and employee expectations have changed many retail business models. The pandemic has financially challenged most retailers. The one sector that has benefited from the lockdowns was grocery retail. As more meals were prepared at home, grocers did well. Metro and Sobeys reported same-store sales growth for a four-week period during March-April of 25% and 37% respectively and Loblaws reported a $751 million increase March sales.
Other retailers, considered non-essential, have been closed for nearly two months. As the economy gradually reopens, some of them will not make it. Others will survive but will be wounded by the prolonged store closure. Some will not just survive but will thrive. The retailers who were financially and strategically in a strong position pre-pandemic, will come out of this crisis in good shape.
With social distancing and other restrictive measures set to continue for a while, retailers must ensure that their employees and customers are protected. Masks, gloves, and increased use of cleaning products in stores will be the norm for a while. Many retailers are planning on limiting the number of customers allowed into the store. All of this will increase the cost of doing business and put pressure on margins. Even before the pandemic hundreds of store closures were announced in Canada and the US. We are likely to see more closures due to the increased financial stress caused by the pandemic. Reitmans, which operates 576 stores in Canada across several banners, has filed for bankruptcy protection. In the US, JC Penney, Nieman Marcus, and J. Crew have taken the same route.
What must retailers do to ensure a strong post-pandemic recovery? If retailers take the effort to understand the emerging post-pandemic customer, think strategically, act proactively, and embrace change, they can come out of this crisis in stronger shape. The ones who yearn to go back to the way things were will struggle. This is the lesson coming out of our extensive research during the past two months.
At the David Sobey Centre for Innovation in Retailing and Services, which is a research centre at Saint Mary’s University, we have been surveying Canadians every month to understand how their attitudes and behaviours may be shifting during the pandemic as well as their values and outlook. From April to May we saw changes in how people shopped, how often they shopped and what they bought. More consumers have shopped online in the past two months than ever before. This is likely to continue. Consumers expect to focus more on their personal experiences in the future as opposed to merely owning material possessions. Consumers are reevaluating their choices in life and want retailers to do the right things to earn their trust. Retailers must understand these shifting consumer attitudes and values and respond accordingly.
We have surveyed employees in Canada and US to understand their issues, perceptions and how they are being treated by retailers. We have also interviewed senior executives from over 30 retail companies – from large multinationals to smaller regional retailers. The ones who are doing well and are poised to do well in the future seem to have a few common traits:
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Core Values: Retailers with strong core values had a guiding light as they navigated through the dark and rough terrain created by the pandemic. Those who were short-term focused, opportunistic, and not really committed to some foundational principles struggled.
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Know Your Customer: Consumer response to the pandemic is not uniform. Some will go to malls as soon as they reopen, and others are going to avoid in-store shopping. Expectations and spending patterns may be different post-pandemic. Invest the resources to get to know your customer. You may have to engage with different segments of customers differently.
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Scrappy and Fail Fast: The change forced on the retail sector by this pandemic was at a level that has not been seen in the past. This required retailers to try different solutions to problems and innovate fast. Those who were scrappy and took fail fast approach have had more success. One retailer went from only physical stores to full-fledged e-commerce in two weeks. The online store was their lifeline as the stores remained closed for several weeks. Another retailer quickly trained store staff to become online personal shoppers. One apparel retailer whose stores were closed, launched an app within a week to enable a personalized mobile shopping experience.
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Employees First: The companies that received positive reviews in our surveys were ones who put the employees above short-term financial metrics. “Hero” pay became an industry norm in the past two months. But these companies went beyond. One hired a psychologist to provide ongoing counseling to employees. Another provided full pay for staff even though all their stores were closed. They decided not to let their employees take the government support.
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Long-term Play: We also saw great examples retailers who are thinking strategically and not just focused on weathering this storm. They see longer term opportunities in the market as weaker players exit. Shifts in consumer behaviour are opening new opportunities and a different role for their stores and online channels. They are positioning themselves to take advantage of these opportunities.
Using our research and insights from leading industry experts in areas such as retail strategy, leadership, retail innovation, and customer experience, the David Sobey Centre is pleased to offer a webinar series in June called RISE Again Retail. This is a series of six webinars, two per week, starting from June 9th.
We think it is a great opportunity for retailers, irrespective of size, to invest some time reflecting on how they should lead their companies through the next phase (Q3 and Q4, 2020) and then into the longer term. What does their strategy look like? Which opportunities for innovation should they address and how? What will the new customer experience look like and how do they meet the changing customer expectations? How can they build a strong internal culture that will sustain the company through all the change that is going to be inevitable?
These are some of the topics we will address in the webinar series. We are delighted that Sarah Jordon, CEO of Mastermind Toys, will be a special guest on the opening day. Speakers and instructors are industry veterans who will share their insights, engage participants in meaningful discussions and help participants formulate action plans. Those in leadership roles or anyone with a significant responsibility in a retail business can benefit from this program. Please visit us for information and registration.
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