Retail is facing more change, uncertainty, risk, and reward than it has in memorable history. Our Retail Restart Playbook provides in-depth answers and operational considerations for retailers as they reopen stores and restart business post coronavirus closures.
You survived. Now what? A restart playbook for retailers, wholesalers, and brands.
"Over the last month, retail has raced to navigate and confront the crisis and made herculean efforts to support employees and customers. The weeks and months ahead will be similarly challenging, but the winners will be the planners and pragmatists. Over the next few weeks, we will tackle one set of operational considerations at a time in a way that will help accelerate hands-on progress."
-David Bassuk and Joel Bines, global co-leaders of AlixPartners' Retail practice
navigating the coronavirus crisis
Retailers know that reopening stores isn’t as simple as switching the lights on from off. A thoughtful, practical, and cascading plan will be necessary. The following set of considerations demands complex coordination behind the scenes with the most important goal of prioritizing safety for the community.
If you’re a retailer that was forced to close stores for the last two months, you’re fighting on three fronts: customers will have less money for discretionary spending, what customers are choosing to spend their money on is changing, and you now have a glut of unsold inventory sitting in your stores and distribution centers. To build a new plan in these uncertain times, it is crucial to have open communication between stores, category planners, and the finance team.
Focusing on regaining control over your product-to-market processes will not be as simple as going back to doing things the way they have always been done, and will demand significantly more open communication and harmonized decision making. How can retailers use this situation as an opportunity to bring agility and cohesion into their product-to-market process?
Maintaining healthy margins is crucial for retailers confronting increased expenses in keeping customers and employees safe, significant markdowns on excess inventory, and lowered discretionary consumer spending. But as you make merchandise decisions for reopened stores and e-commerce channels, your current product cost and existing commercial agreements may not deliver adequate margins anymore.
While it may be tempting to launch deep discounts on leftover product from spring and summer collections, doing so indiscriminately can dilute gross profits even as other factors continue to erode margins. Instead, regaining control over your business will require a thoughtful approach to pricing and promotions.
Current cost pressures may lead some retailers to reduce spending on marketing too aggressively, leading to a decrease in margin-positive transactions or profitable customer acquisition. Marketing organizations will need to be more agile in how they operate in order to stay relevant in what will likely remain a volatile environment.
CHAPTER SEVEN—ECOMMERCE AND SUPPLY CHAIN
Addressing the costs and complexities related to omnichannel execution has become imperative since the COVID-19 crisis began How can retailers chip away at ecommerce’s higher fulfillment costs while also making these channels a more integrated part of their business?