Commentary: How to Optimize Physical Store Business During COVID-19 and Beyond
The economic impact COVID-19 is having on physical stores is unprecedented, as more than 250,000 locations across the U.S. have either temporarily or entirely closed since March.
Some of the biggest retailers, like Walmart and Target, are reducing the economic impact by adapting their physical locations to improve the online aspect of their operations. For smaller businesses that don't have the same resources, navigating the current crisis is a considerable challenge.
Most companies simply don’t possess the resources to turn their store into a fulfillment center. However, with some adjustments and well-executed strategies, a physical business can confront this crisis better.
What can brick-and-mortar stores do to deal with the crisis in the most effective ways, and what will the landscape look like beyond the pandemic?
Clean and optimize your inventory with a POS
Supply chain lines worldwide are being disrupted with overseas shipping and transportation difficulties. These extreme changes are affecting retailers differently, with some businesses experiencing a surplus of unsold inventory while others experience scarcity, leading to late or canceled orders. It's crucial to establish a clear line of communication with vendors to keep constant track of delayed orders.
Looking at what you have, what you’re expecting, and what you may no longer be receiving is the first step. Change the ship and receive dates on the purchase orders in your POS as you’re notified of canceled or delayed orders. With your physical store doors closed anyway, this is a great time to conduct a physical inventory audit to clear up any inventory discrepancies in your POS, and get a holistic view of what you’re sitting on. With all of this information at your fingertips, you can begin to formulate a strategic plan to move through the inventory you already have, how to adjust what you have on order, and what you’ll need to source for next season.
The online retail strategy for today and the future
One of the most immediate threats to companies during this pandemic is economic solvency, as many stores across the U.S. and the world have been forced to close. It's vital to establish a robust online presence, and decide which services (aside from your products) you can provide.
For example, with their operations halted in China, Nike sought to supplement their losses by making its workout app free to use and saw a 100% weekly increase in its weekly active users. While Nike's strategy may not fully cover the losses from its products, it does provide its customers with value, establishes trust by offering them something for free, and keeps the brand top of mind for when consumers do begin spending again.
As you develop your online strategy, it’s imperative to consider how consumer behavior has changed. Many retailers have seen an immediate boost in sales of high-demand items like household essentials or fitness equipment; however, whether or not these categories will continue to thrive as conditions change is uncertain It’s critical to run consistent sales, sell-through, and margin reports in your POS to keep an eye on these trends and pivot quickly should the need slow down.
The reopening of physical stores will be competitive. Brick-and-mortar businesses need to be meticulous in their data collection and analysis and invest in the retail technology that is going to allow them to do so. A robust cloud-based point of sale that you can access from home when your store is closed is the best tool available to confront unprecedented situations like today's crisis and identify trends that will help businesses through the storm.