COVID-19 hit the world like a tidal wave, and while the initial impact may be over, retailers are continuing to deal with the choppy waters it left behind. According to RELEX CEO Mikko Kärkkäinen, the “new normal” that many retailers are anticipating is still 12-18 months away.
In his May 2020 presentation, The Retail Impact: Lessons Learned from the Global Health Crisis, Kärkkäinen covered:
- COVID-19 impacts on the retail market across different regions
- Demand impact across different channels and categories
- How some retailers kept availability above 90% through the pandemic
- What consumer behavior could look like as restrictions are lifted
- How to prepare for the new normal
In this webinar, Kärkkäinen takes a critical look at what happened when the pandemic began to affect the global retail market and how businesses attempted to adapt to a quickly changing and unpredictable environment. In addition, he details the best practices put in place by successful retailers around the world, from continued deep visibility into supply chain processes to the addition of new sources of essential items to changes to delivery management that maximized efficiency.
Surprisingly, Kärkkäinen notes, the dramatic change in customer behavior was driven not by government restrictions but by media reports and the public’s overall perception of the pandemic. In many regions, RELEX analysis consistently showed that consumer behavior changed two to three weeks before any restrictions were put in place. The result? Retailers had to pivot early on, as consumers stockpiled essential goods, decreased their store visits, took advantage of delivery and click-and-collect shopping models, and increased their basket values. The situation forced retailers to make rapid decisions to keep stores stocked and customers satisfied while balancing limited capacity and a finite amount of space on shelves and in warehouses, DCs, and back rooms.
Retailers who best managed the crisis were able to lean on AI, machine learning, and automated forecasting capabilities to identify and minimize bottlenecks and make critical tweaks to their supply chain. These retailers used this data to prioritize inventory, combine deliveries, maximize capacity and availability, and alter stock to better meet revised consumer demands. Kärkkäinen looks back to make recommendations for building better aggregate forecasting capabilities to manage workforce and other capacity and supply chain issues for the next phases of the pandemic.
Right now, Kärkkäinen notes, the world is taking steps toward the new normal, but we won’t arrive there until we have access to medication or a vaccine. Until then, retailers must continue to improve their omni-channel approach while investing in the critical tools and processes required for accurate scenario planning and fast responses to supply chain crises as they arise.
What does Kärkkäinen believe will happen in retail over the next few months and years? How can retailers set themselves up for success while facing uncertainty? Watch the full presentation to learn more.