3 Ways to Innovate Your Way Out of a Retail Downturn
Any economic downturn can be difficult for retailers. Low consumer spending and reduced operating budgets make it difficult to meet customer expectations and stay profitable. For example, the Great Recession in 2008 accelerated retail transformation, as many brands went out of business and others shifted to e-commerce channels.
However, for savvy retailers, a downturn offers opportunities, not just risks. In 2008, jeweler Kendra Scott lost wholesale partners, so she opened her own brick-and-mortar and online stores instead. As a result, her brand is stronger than ever.
This current crisis may seem bleak, but by advancing your store operations to the next level, you can build retail success for decades to come.
1. Lead with New Strategies
During the current economic downturn, by-the-numbers management may not work without a willingness to innovate and interpret. For example, cutting staffing to save on labor costs may backfire if your remaining workforce is stretched too thin to effectively fulfill the time-consuming omnichannel orders necessary during social distancing. COVID-19 has created an unprecedented and uncertain situation, so previously tried-and-true solutions may be insufficient for this challenge. Simply cutting costs and trying to weather the storm won’t reassure nervous consumers or accommodate their changing shopping habits.
Instead, you will need empathetic and intuitive leadership. From corporate store operations to your individual store managers, getting everyone on the same page and working towards the same goals is crucial. Clear communication will be key for success; create a single source of truth, be open, and collaborate with store staff. Frontline teams need support, now more than ever, to ensure they can adequately execute emergency initiatives and reassure customers.
2. Adapt Your Store Operations for New Success
Even as stores reopen, social distancing is still impacting store operations dramatically. And the long-term impacts on customer behavior and shopping patterns are still to be seen. Smart retailers are innovating store operations to provide the best possible customer experience, even in the face of a crisis.
Some of these changes are necessary to get shoppers safely in and through stores—for example, changing store layouts—while others offer alternative ways to shop—for example, shopping by appointment. Many of these innovations will continue to shape retail for years to come, so it’s key to implement them with a long-term strategy in mind.
Store associates need to both execute these programs quickly—so shoppers can return to your stores—and consistently to ensure that customers can reliably benefit from them at every store. Additionally, given the increased demand for alternatives to face-to-face interaction, consider upskilling associates and training them for more distanced models of customer service. A unified real-time store execution platform can help you guide associates through these rapid changes—and help store and field managers attest completion and compliance.
3. Experiment Intelligently
Under unprecedented and unpredictable circumstances, you need to make educated guesses about what comes next and implement pilot programs accordingly; but it’s just as important to intelligently measure the outcome of your innovations. Test initiatives are only as reliable as your data and execution.
During a chaotic period, it can seem daunting to create consistent test initiatives and accurately benchmark the results. However, artificial intelligence can make these decisions much easier. From planning, to implementing, to analyzing results, AI-powered solutions can offer data-driven recommendations, minimize human error, and correct for outliers and other anomalies. Understanding what really works in your stores will be vital to emerging post-pandemic with strong retail operations and engaging in-store programs.
No one knows for sure what the next chapter of retailing looks like, but Reflexis is here to help you prepare with streamlined, intelligent retail operations. Reach out to firstname.lastname@example.org to learn more!