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What challenges has Covid-19 thrown at the non-food retail industry?

shopping trolley
shopping trolley
Sales of non-food items have surged since Covid-19 arrived.

The Covid-19 pandemic has changed the world this year, and many ramifications are being felt, differing industry to industry, month to month, and even within sub-segments of an industry.

Nothing is the same when comparing to same time last year, and your business model is no different. It must be pulled apart and redefined to maintain relevance with consumers, and build efficiency and adaptability in your supply chain, whilst ensuring the new needs of the post-Covid world are met.

The non-food consumer goods industry has experienced complex effects.  Some sub-segments are booming, such as sporting equipment, home improvement items and PPE and sanitiser, whilst others are suffering.  As the global recession deepens, luxury items will be a hard sell, and with the introduction of community lockdowns, traditional brick-and-mortar purchases had to be replaced with effective and enticing digital solutions almost overnight. So much change in such a short timeframe. Let’s look closer at a few of the changes being made and the flow-on effects they may create.

  • Supply Chain is key.  This year has really exposed the supply chain as a crucial and yet vulnerable aspect of a company’s operations. Those businesses who had a transparent and thorough understanding of their supply chain, and plan B’s and C’s in place for possible events such as this pandemic, have probably weathered the storm best so far. As retail pricing and cost pressures have driven much of Australia’s non-food manufacturing overseas over the past few decades, the need to rely on other countries to keep a business going has really exposed a weakness where previously it may have been a strength. To move forward, a strong supply chain will consist of transparent and rapid-response elements at every point in the chain.  A recent McKinsey survey of manufacturing and supply-chain professionals found that 93 per cent plan to focus on resilience of their supply chain. Blockchain technology, for example, will become an important tool for businesses to gain efficiency, agility and innovation within their supply chain, as it provides transparent and accurate end-to-end tracking. 
  • Ensuring continuity of service to stay open for business. You can have your supply chain flowing and increased consumer demand for your product, but if your employees are not healthy and safe, a virus outbreak at the workplace can result in immediate closures and costly ramifications. Business leaders need to show care and responsibility for their employees in these times, promoting an environment that is safe for employees to work to keep the company going.  Seeking expert advice on the specific environmental monitoring programs needed for the operation of your business is crucial to reducing risk through a pandemic.
  • Understanding the impacts on supply chain changes. More than 75 per cent of businesses have “one or more direct or Tier 1 suppliers” from China, and 938 of the Fortune 1000 companies have Tier 2 suppliers there! That would have resulted in many changes to procurement sources this year. But in the scramble to get supplies, has thought gone into the ramifications from a product-compliance perspective? Changing sources of finished products’ components may mean labelling changes, including Country of Origin declarations.  Additionally, has the required testing been done on electrical components for example, to ensure compliance to Australian standards? The last thing any manufacturer needs now is a recall situation for a product found non-compliant. Ensuring Australian standards and compliance are maintained with any supply chain change is a critical part of the process.
  • Keeping your most important asset safe – the consumer! This year has brought out vulnerabilities in both companies and consumers.  Without consumers, your business won’t succeed. Selling any product brings with it great responsibility for the health and safety of the consumer. With all the change your business has had to go through just to survive this past year, it is important to do the due diligence end-to-end, identifying what impacts the change has along the line.  

Mérieux NutriSciences has been assisting companies with their non-food consumer goods testing and compliance for decades! Whether it be chemical, physical and microbiological tests in our laboratories, including efficacy testing for sanitisers and disinfectants, digital solutions such as Blockchain and Environmental Monitoring Program EnviroMap®, or labelling verification, SDS reviews and compliance training, the team at Mérieux NutriSciences can help meet your regulatory needs!  

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