Expert Insight: Retailers should plan for the new normal now
The last few weeks have created an unprecedented situation and rapid changes for all of us, perhaps, none more so than chain retailers. While some businesses—like pharmacies and supermarkets—have been thrust into the eye of the storm struggling to keep up with new demands, others have simply had to shutter their stores and wonder when they will see a customer again.
While it may seem counterintuitive to focus on anything but execution, I believe now is exactly the time for leaders in both of these categories to re-examine and refresh their overall strategy by keeping a sharp eye on how customer behavior and sentiment is evolving, and planning for the new normal BEFORE it arrives.
The truth is that most businesses wait too long between resets. I have worked with many retail CEOs to help reinvent their business strategies. This usually happens months or years after it became clear that their model was misaligned with consumer expectations, that competitive dynamics changed, or that social sentiment had shifted leaving the brand’s messaging behind.
Today, all three of these things are happening to all of us at the same time, and the decisions you make now will greatly influence how your business will fare in the aftermath of this crisis. Here are some pieces of advice I have given my CEO clients in the last few weeks.
Look Beyond Cost Control
Obviously, managing costs and cash flows are crucial in a time when retail businesses are facing steep declines in revenue. You will have to make difficult calculations, requiring you to weigh risk and reward amongst unknown variables (such as how long the current situation will last). Yet, if cost control wholly shapes your operating strategies during these tumultuous times, it will be difficult, if not impossible, to position yourself for longer-term success when the crisis abates.
Help Consumers Function
Regardless of industry, your relationship with customers is predicated on your ability to provide them with products or services during the best and the worst of times, and it is the latter that really speaks to who you are as a brand. Some retail businesses have become lifelines for their customers—embrace this and focus on their health and the health of your employees.
Others will need to expand, restrict, or entirely reimagine what you offer. Remember, trusted relationships are often forged or deepened during difficult times like wartime, depressions/recessions, and moments of social upheaval. Customers will remember what you did for them.
Like it or not, we have officially crossed the Rubicon on the digital/direct economy. Do not be hesitant to make additional investments into digital or e-commerce experiences. Move fast. Be scrappy and iterate quickly. If e-commerce is going to take you too long, make do with email. Customers will understand, and you’ll learn what they really need.
Brick-and-mortar stores will be back—and I believe they can be stronger than ever as we will all crave human experiences on the other end of social isolation—but you need to meet your customers’ needs in the meantime, and digital/direct is the way to do that.
Perhaps the most uplifting news in the last few weeks has been about those businesses stepping up to meet our collective needs, not because they will necessarily profit from it, but because it’s the right thing to do. Whether that means giving hazard pay and extra sick time to your hourly employees who now find themselves on the frontlines, providing meals to first responders, or donating much-needed personal protective equipment to healthcare workers. On the other side of the crisis, what you did during this time will be remembered and rewarded with customer loyalty.
Have Empathy for Your Consumer, Not Your Competitors
In crisis, market share shakes loose. While this is a time to show empathy toward your consumer and generosity toward your communities, you do not have to do the same with competitors. Focus on what you need to do to win market share. Now is a prime time to buy more customers as costs for media buys and search engine ads are going down. This is a rare and affordable opportunity to double down on customer acquisition.
Let Customers and Employees Guide You
Now is not the time to live in an executive bubble. People are looking for authentic leadership and you cannot afford to be (or appear) out of touch with your consumers or your team members. Lead by example, show up on the front lines and be an active doer in the organization. It’s okay to be vulnerable and not know the answer, but be there. Help your team move from paralysis to action by doing just that.
Plan for the new normal, now.
With a crisis of this magnitude, it is unavoidable that customer attitudes and behaviors will shift permanently. Once the first few rounds of decisions have been made, pull your team together (virtually, of course) and re-ask the most fundamental questions:
1. How do we see the world-changing, and what are the implications for our customers and for us?
2. Which customers are we focused on and what do they care most deeply about?
3. How can and will we truly win with them, and meaningfully set ourselves apart from their other choices?
4. Where will growth come from now and how will we access it?
5. What are our priorities now?
While the timing for this dialogue may initially feel off, it is completely on point to resetting direction amongst a new set of social and market dynamics, aligning and re-energizing your total team, and focusing on doing the things that will capitalize on the opportunities in front of you.
The future is uncertain, yes, but change is opportunity.
Joe Jackman is CEO of Jackman Reinvents and author of “The Reinventionist Mindset; Learning to Love Change and the Human How of Doing It Brilliantly.”