6 Takeaways from the 9th Annual Meeting: The New Normal

Senior leaders from 43 retail companies met in October 2020 to talk about the pandemic and its attendant changes to retail store operations. Here are notes from the meeting. 

Retail leaders are “ruthlessly prioritizing” while making major changes to their operations, creating The New Normal for retail. Participants closed many thousands of stores during the first months of the pandemic, which has had a dramatically bad impact on the industry. Unprofitable stores were shuttered permanently, and new formats are being introduced. Sharply reduced travel has had major impacts internationally and on popular stores in tourist destinations, and uncertainty about school has retarded sales of college apparel. Luxury brands have taken a big hit. Assortments are changing and new products are being rolled out.

Retailers have responded to these unprecedented challenges with energy and a sense of determination. One retail company prides itself on being “scrappy” and “nimble” and others echoed that sentiment. 

There are six elements to retail’s New Normal.

FIRST, Health and safety are paramount. Everyone has stocked up on masks, shields, hand sanitizer, and disinfecting sprays. Some are conducting temperature checks; others ask associates to assert that they haven’t been in contact with someone who’s sick (some HCM packages can automate this.) POS stations are distanced with Plexiglas shields. Many have floor signs asking for social distancing. Retailers are conducting health and safety training, rearranging break rooms, temporarily closing bathrooms, setting up cleaning stations and practicing enhanced cleaning protocols, Companies have hired greeters to say hello and familiarize customers with new protocols. Some stores have hired professional cleaners. Company task forces that make health and safety recommendations are meeting again to talk about the holidays.

SECOND, digital transformation is advancing at an unprecedented pace. Retailers are adopting new technologies and developing new processes within weeks, when once they would have taken months or years. Fear of the virus has affected customer behavior, as customers become more “purposeful” and spend considerably more time online, and less time inside the store; they come to buy, not browse. Conversion rates are way up.

Networks have been beefed up both inside the store and outside, where curbside delivery happens. 

BOPIS, curbside delivery, lockers, ship-from-store and same-day delivery are now very important for nearly every segment; some stores have seen triple or quadruple increases in new delivery methods, despite (in some cases) very small back rooms. One company stood up curbside delivery within ten days; another said that a ten-month project was accomplished in ten days. With traffic so heavy on Web commerce sites, fulfillment from stores has become critically important.

Contactless payment technologies are in great demand. Some companies have enabled self-checkout through their mobile app. Several newer payment technologies were mentioned in the meeting.

Retailers want to replace fragile pin pads that break during disinfection procedures. 

Associates need to be empowered with mobile technologies, sometimes multiple applications, for many uses. Most participants mentioned numerous new technology projects. 

Unpredictable and disrupted supply chains have caused retailers to search for new technologies, and new suppliers of merchandise.  

THIRD, it's all about associates. Retaining associates is more important than ever. Hiring sales associates has been challenging during the pandemic, particularly with schools and daycares shuttered. It has been difficult to reestablish teams after March layoffs. Some team members refused to come back because of fears they’d be infected. Holiday hiring has already begun, and it hasn’t been easy.

Communication with associates has been difficult; “cascade” communications in the early days of the pandemic were confusing, especially in light of constantly changing state and jurisdictional regulations and company policies. New technologies are enabling companies to communicate more clearly with associates and more often. Retailers are also examining the cadence of their communications with workers; few use email.

To keep associates, some companies schedule them at more than one store to alleviate staffing shortages and allow associates to make more money. There are also some new initiatives to help associates, including a pay-on-demand program where associates wouldn’t have to wait until payday to collect the money they have earned; one company is doing it and about 18% of eligible associates have made use of it. 

There is new interest in learning more information about potential hires. Companies would like to ask them more questions, get a better idea of their skills, and put together profiles of the people they are hiring. 

Retailers are keen on retaining associates and engaging further with them, and are investing new energy in appreciation practices for stressed and fatigued workers, including bonuses, elevated employee discounts, and extra pay for overtime. 

Training for associates is more important than ever; in many cases it’s being conducted via Zoom or Webex or Microsoft Teams. Those technologies are also being used for communications with managers, district leaders, and HQ staff. District managers are also conducting virtual store visits. 

There is increased interest in remaking payroll and scheduling for 2021.

FOURTH, store processes are changing in a number of ways to ensure safety and more efficient operation:

Some fitting rooms are closed. Others are sanitized after each use; some have attendants to ensure distancing. They may reopen for holiday as customers want to try things on. For those that are closed, retailers have relaxed return policies; one retail company went from a 90-day return policy to a 180-day one.

Beauty testers are off-limits, and the in-store beauty experience is changing.

Many retailers are quarantining returned products for a period of time; one participant processes returns in empty stores. People are using cleaning sprays and steam.

Stores had reduced hours for cleaning; they are now staying open later to accommodate busy people who are working from home. It is unclear whether stores will return to abbreviated hours. 

No participants were planning to open on Thanksgiving.

Retailers established queues outside the store to maintain limit the number of people in the store; now that the weather is getting cooler, retailers are looking at new ways to keep customers warm and comfortable as they wait.  

Participants want to be certain that pickup protocols, both inside and outside the store, are frictionless..

Participants anticipate big changes for the holiday selling season, including an earlier start from customers, more demand for online shopping and shipping, and unpredictable demand. 

Some stores are adding virtual appointments with associates, or physical appointments. (Finally, sales associates can see the inside of customers’ closets.)

One company has been doing live videos with merchants to introduce product and guide guests to the website.  

FIFTH, retailers’ relationships with customers are changing fundamentally. Clienteling is more important than ever. Participants want to get to know customers better, provide better service, make more meaningful offers, and establish true loyalty. Their behavior is changing dramatically during the pandemic; one participant reported that 65% of revenue used to come through stores, but now online produces 65% of revenue. Companies are seeing an increase in texting and phoning to drive sales. Some are upgrading POS to gather better information about customers.. Loyalty programs have become more important than ever. Retailers are also looking at new ways to communicate with customers, doing more on social media, publishing how-to videos,        

Social selling empowers associates to meet with customers over Zoom and FaceTime.

SIXTH, lessons from companies that have failed during the pandemic. Several of our participants worked for companies that have closed all their stores. They shared some tips.

·       The pivot to digital is essential. Retailers that downplayed the role of ecommerce don’t have a clear road to survival.

·       Leadership is keenly important. Companies that are thriving have assertive leaders who empower their staffs. 

·       Three-month-old data is “deadly.” Make sure that your data is timely and clean.

·       Shop your own site. Try out the search function and see how long delivery takes.

·       Aim for perfect industry accuracy for ecommerce; ensure that you can distinguish product in transit from product in the store. 

·       Incent sales associates; they are critically important. 

 Sponsor Segments

Our sponsors offered timely and important advice. . 

MARTIN REYNOLDS, BLUEYONDER: The Reality of COVID: The Next Normal

JOHN ORR, CERIDIAN: The Future of Work and the Role of HR

LISA WOOD, CDW CDW’s 5th annual Retail Tech Study 2020

DEAN FREW, SML-RFID: Case Studies on how retailers used Item-Level RFID inventory management to help efficiently open stores.

GUY YEHIAV, ZEBRA: How Prescriptive Analytics is Empowering Store Operations

KEVIN TAPSCOTT, REFLEXIS: Leveraging Technology to Ensure Successful Store Operations

TRISTAN ROGERS, CONCRETE: How to adapt to and profit from reduced footfall in

stores. 

NEIL JENSEN, WORKDAY: Your people: a differentiator that can make a meaningful impact.

KIM GLASSCOCK AND SUDHIR BALEBAIL, IBM: Home for the Holidays. Holiday shopping will likely be a little different than last year.  

GREG PRYOR, WORKDAY: Ideas for a Changing World

ANNE-QUELINE KELLER, ALTERYX: Retail Technology Investment Post-COVID

Special thanks to Brent Biddulph at Cloudera for sending along Lowe’s gift cards!

Participants talked about meeting up briefly after the holiday season to compare notes.