When the pandemic first hit in the spring of 2020, we knew all companies would need to focus on three goals:
- Recover and resolve - Focus on staying alive over the next one to two quarters.
- Be first and be resilient - Develop a strategy for the second half of 2020 by building resilience, competitive advantage and modernized compliance into a new-foundation operating model.
- Prepare for new future - Think about how the foundations of your business will need to change post-crisis.
From mid-2020 and now into mid-2021, retail and CPG companies have been focused on initiatives to reengineer processes and deploy systems and technologies to improve agility and resiliency.
But, as vaccinations become more widely distributed, and as the COVID crisis begins to abate – and as economic growth returns – retailers and CPG companies will need to seize new opportunities. There is no question the pandemic changed the retail landscape forever. It accelerated e-commerce penetration by three to five years. In short, consumers have embraced digital buying, and new consumer buying behaviors have changed the customer journey. What does that mean for retailers in 2021?
Smart retail investments for the future
It means smart investment in technology, capabilities and genuine innovation becomes crucial. Post-pandemic technology investment priorities should include new tools and services focusing on four main areas: campaign management, store operations, e-commerce and supply chain management.
- Campaign management: investments here need be focused on increasing your ability to capture, share and respond to insights from customer data. This is critical to better position you to communicate directly to consumers with localized and personalized marketing campaigns. Digital marketing also will be important in promoting contactless store experiences like curbside pickup and reassuring customers about in-store safety protocols.
- Store operations: Automation has become more widely accepted by both consumers and retail workers. Every aspect of the store, from shopping carts to coolers, will become more intelligent. In-store consumer behavior and traffic data will inform planograms and visual merchandising strategies to prevent overcrowding. Self-checkout will become more common, with scan-and-go or camera-based systems contributing to more frictionless retail experiences. Robotics will become increasingly common in store aisles, handling repetitive human tasks like auditing store shelves and freeing up labor for customer-facing tasks.
- E-commerce: Though all signs point to a sustained embrace of online shopping, e-commerce operations will become less strained as consumers start returning to stores. E-commerce tools (along with digital marketing) will also drive demand back to stores and enable smoother experiences when customers arrive. Mobile-enabled shopping solutions will play a bigger role in the consumer experience, allowing shoppers to navigate stores, learn more about products and add them to their basket. Having spent the past year largely buying via e-commerce platforms, shoppers increasingly expect on-line AI-based product recommendations and relevant suggestions to be part of what they consider a seamless omni-channel experience.
- Supply chain: The new future will require significant reengineering of the supply chain as companies rethink the location of inventory in their store distribution network and their e-commerce fulfillment capabilities. AI and machine learning will be deployed across the supply chain, optimizing the network as stores morph into hybrid store fronts and e-commerce fulfillment centers. An optimized supply chain will allow brands and retailers to order and position products so they more closely match demand, and consumers will be less impacted by out-of-stock products as “endless aisle” capabilities and delivery options expand.
Retailers and consumer goods brands must focus their business and technology strategy on what makes them stand out from the crowd. Creating a holistic, cross-business approach to digital transformation is no small undertaking, but it will help you get closer to your consumers and grow. And brands that fail to keep pace with the acceleration of digital transformation will fall quickly behind in the “new future.”
About the author
Mike Witty has 25 years of experience assisting retail and consumer product companies define their customer experience and supply chain strategies. He works with large national and multi-national companies to create digital and analytic strategies and to design, integrate and implement technologies to improve both the external customer experience and internal operational efficiency. Mike also partners with clients to lead target operating model transformation initiatives and the rollout of change management programs to mobilize process and organizational change across their environments.