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Innovations in retail sparked by the COVID-19 pandemic

“Necessity is the mother of invention.”

The truth of this old expression is being demonstrated in many areas of our lives right now, not least the use of social distancing. The pandemic has also spurred many retail innovations as businesses respond to the rapidly changing environment.

There’s some incredible innovations happening internationally and I thought I’d share some examples of customer-led innovations in case these spur ideas for retail leaders. I have drawn examples from five challenges facing retailers right now.

Communicating directly with customers via digital channels

Many retail CEOs are now communicating directly with their customers, sometimes every few days. This task is made simpler for retailers who already have a direct relationship with customers through a loyalty program, and an up-to-date digital connection, for example an active email address. A stand-out here is Loblaw in Canada, which invested significantly in its App in recent years and now has several million active users accessing their personalised specials each week. This direct digital connection with millions of its customers ensures that written and video updates from CEO Galen Weston are much more likely to reach Loblaw’s shoppers.

Increasing capacity for home deliveries of essential groceries

The pandemic has led to a sudden surge in demand for home delivery of groceries and retailers are finding it tough to keep up. Most home delivery slots are booked up weeks in advance because of capacity bottlenecks in both picking and delivery operations. One excellent Australian innovation to address this challenge has been the Woolworths’s Basics Box. Woolworths partnered with DHL and Australia Post to package up a bundle of essential groceries, delivered to the doorstep for an all-inclusive cost of $80.

By standardising the box contents, and including only ambient products, Woolworths was able to shift picking to a warehouse and deliver the box via the postal service, easing the burden on its own stores and fleet of vans. This model could be applied in other markets and could be implemented alongside the in-house operations most grocery retailers currently use to service online orders, enabling an overall increase in capacity.

Finding ways to bring forward cashflow

The situation has also generated initiatives for retailers to use digital gift to crowdfund sales in advance or co-ordinate a campaign to support team members unable to work. There are many examples of this around the world, one example being the Australian joint initiative between Carlton and United Breweries and the Australian Hotels Association, For The Love Of Your Local. Customers of local venues can buy a pint in advance and CUB will match the support by offering an additional pint.

Re-purposing under-utilised stores

Many retail and food businesses have experienced a dramatic decline in demand or even had to close their core operation for serving customers, for example walk-in cafes and restaurants. Many have responded by shifting focus to Home Delivery or Pick-Up and a few have gone even further and transitioned to selling essential groceries to their local community. An example from the UK is My Pub Shop, a site which allows pubs and other businesses to take Click & Collect orders online for basic products such as bread, milk and eggs.

Supporting team members to do the right thing

One of the positives to emerge from the crisis is an increased respect for the contribution of front-line team members in retail businesses. There have been many initiatives around the world to support store team members and keep them safe, from protective screens to temperature checks at the entrance.

A significant challenge identified early on was that approximately 20% of customer-facing workers do not have access to paid sick leave. This created a risk because it meant many workers could not afford to stay at home when they felt unwell. Many retail employers have responded by changing their policies so that team members on flexible or casual contracts will still be covered if they take sick leave. Although this created an unbudgeted cost for the retailer, this move was widely recognised as being taken in the interest of society. I hope that decisions such as this will be rewarded in the long-term by greater loyalty from both employees and customers.

In summary, I hope this sharing of a mix of low-tech and high-tech innovations inspires a few retailers to consider how their business can best respond to this crisis.

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