Companies must adopt a recovery position in the Post COVID-19 black swan based on the jolt effects felt by retailers around the world in order to prepare new sets of contingency planning measures and cope with the looming signs of uncertainty. This entails, on one hand, reexamining their survival strategies, store network, existing point of sales and pre-established business models; and on the other hand, to look for any dead angles, emerging whitespace, be it during the early recovery phase or after a prolonged period of consumer confinement and quarantine shopping that spared no one including online sales which have also contracted 5 to 20 percent across Europe, 30 to 40 percent in the US and 15 to 25 percent in China.
Based on various market studies and survey results published by leading firms like The McKinsey Global Institute’s insightful and elaborate State of Fashion in 2020, we have compiled and summarized the most critical insights on what it takes to boost retail business immunity systems and to hopefully turn COVID 19 crisis into a game-changer. One thing seems to be certain; the one size fits all type of cure for the retail world doesn’t exist. Each country, each retail vertical will have to abide by its own rules and socioeconomic stimulus measures to boost, reignite consumer confidence, and help companies adapt to the changing dynamics in the disruptive age.
According to McKinsey’s latest report, revenues for the global fashion industry (apparel and footwear sectors) will contract by 27 to 30 percent in 2020 year-on-year, although the industry could regain positive growth of 2 to 4 percent in 2021. For the personal luxury goods industry (luxury fashion, luxury accessories, luxury watches, fine jewelry, and high-end beauty), we estimate a global revenue contraction of 35 to 39 percent in 2020 year-on-year, but positive growth of 1 to 4 percent in 2021.
This unprecedented humanitarian and economic crisis have shattered all previous growth forecast for 2020 and pre-established paradigms, leaving retail business owners traumatized and awed by the steep impact of prolonged lockdowns, distancing measures, and shifting grounds. The growing dependence on remote and wireless management, cloud computing, e-commerce, virtual shopping, robotics, video streaming, and smart chain supply logistics among so many disruptive technologies and behaviors are the new normal except for early adopters of smart digitization.
While none of us could predict precisely how long social distancing measures and lockdowns will be re-extended or how recurrent the pandemic is going to be within the next few months, it seems obvious that the retail world is just about to feel the post-traumatic side effects triggered by the lack of readiness to change and to digital-first mindset.
Business owners and captains of industries need to gather all their lieutenants to think about fast-forward tactics to put in place before a new COVID 20 upgrade pops up in the midst of the recovery plan. Being agile is the mother of all necessities. Therefore, it’s time to get ready for a post-coronavirus market. This is a tipping point, where survival of the fittest will most likely favor mutant business warriors and chameleon organizations.
Without a drastic paradigm shift and proper reassessment or transformation of current business models, processes, organizational behaviors, experts are afraid that retailers in the brick and mortar will most likely be the ones to suffer most from the black swan effect due to the stay home, stay of away from physical shopping outlets, food courts, and malls. Two to three months of a lockdown combined to an ongoing recession will mutatis mutandis lead to massive foreclosures across the retail world.
Once the dust settles on the current pandemic, fashion apparel, footwear, jewelry, beauty, and non-essential supplies will have a window of opportunity to step-up their digital transformation projects, ramp up their existing software solutions, omnichannel systems, and digital platforms. Investing in the right eCommerce solution and partner to expedite the transformation processes is the only option for those who will get a chance to be bailed out or have enough stamina to weather further havoc.
While coronavirus is a major disruptor, it’s also an opportunity for retailers to revamp their business models, to boost their immune system and to step up their contingency planning strategies. Companies surviving the immediate crisis will have to make bold and rapid interventions to improve their agile architectures.
The road to recovery according to the market studies mentioned above will entail among many pre-emptive tactics and the following step-up measures.
Here the Top Ten Survival Tips:
- Digital Acceleration as a Pre-emptive Measure to Boost Business Immunity
Social distancing has heightened the critical importance of digital channels, smart stores, broadband networks, social data, collaborative shareware, and collective intelligence tools more than ever and lockdowns have heightened the importance of omnichannel systems as an urgent priority across the entire value chain. With no leeway or limited options to recover lost sales, pure offline players whose revenues depend on brick-and-mortar footprints were hit hardest. The good news is that the retail tech sector is one of the most avant-garde ecosystems when it comes to innovation for the world’s largest employing sector.Take, for example, Multidev Technologies’ early adopters. With turn-key systems like ChainDrive and eComDrive, the company’s leading clients and brands have not been hampered as much by the shopping quarantine as they managed to capture disposable screen-time traffic when most of staying home households turned their focus on indoor-shopping and social media platforms to quell their thirst for binge shopping.
- Sense & Sustainability
As deep discounting will continue to plague the retail industry for the remainder of 2020 due to several ‘’ depressionary’’ factors such as the increasing proclivity towards bargain shopping. This latter consumer behavior will most likely be exacerbated by the rise of anti-consumerism, in inventory gluts, and nosediving consumer confidence. To reach increasingly frugal and disillusioned consumers, brands must find inventive and sustainable ways to regain value and rethink their broader business mission and how to adjust to the changing landscape.
- Think Organic, Health and Wellness
In the absence of an imminent cure or a vaccine, consumers turned to health, wellness, and organic stores for supplements and ancestral medicinal herbs and recipes to boost their immune systems and wellbeing. Unlike other discretionary purchases, organic stores with or without online apps were less harmed by the sanitary crash.
- Frugal Innovation is the mother of necessity
To cope with the new paradigm and emerging consumer shifts, companies must introduce new tools and strategies across the spectrum to invest in frugal practices. Retail players must harness innovations and scale up those that work in order to make radical and enduring changes to their organizations — and to the wider industry — after the dust settles.Recycling unsold inventories, upcycling previous fashion collections, wardrobes, home furnishings, shipping materials, packaging, and managing waste might well be the new normal as most of the consumers have learned to spend more time fixing their households, gardens, attics, and basements…
In the absence of sufficient personal protective equipment, many designers, entrepreneurs, liquor distilleries converted their existing facilities into makeshift works shops to turn snorkeling gears into alternative ventilators and stocks of alcohol into hand sanitizers, etc.
- Live streaming: The Rise of Social Commerce & Indoor-Based Shopping
Between January and February 2020 during the peak of China’s outbreak. WeChat offered features that allowed store assistants to message directly consumers and complete purchase orders, generating much-needed oxygen. Popular social media platforms like Instagram, WeChat Groups, and WeChat Work, allowed companies to expand their reach, engage clients and beef-up their customer relations let alone their brand equity.Other digital solutions used by retail assistants during the lockdown in China included live streaming sessions on WeChat or media platforms such as Yizhibo, Joor, Hero, and Slack which turned empty retail/wholesale showrooms into virtual boiler rooms hosted by store assistants. Brand-to-shopper video chats and broadcasted influencer-curated assortments were well-received on chats like Taobao as the number of Chinese brands live streaming skyrocketed by a whopping 700 percent. This paradigm shift forced traditional brick-and-mortar retailers in China to re-train their store personnel on how to become Livestream hosts and how to sway and convert outdoor-based shoppers into a fan-based indoor audience of active shoppers.
- Virtual Reality, Robotics & Gamification in The Cyberian Republic
Unable to invite the international media to its Japanese headquarters during the lockdown, ASICS’s publicists made their presentation in VR and shipped Oculus Quest headgears to journalists to watch the hologram.From 3D printers to make alternative respiratory ventilators to chatbots, the impact of robotics, AI, real-time social data, and cloud computing are reshaping entire building blocks of the new economy.
- Survival of the fittest & Darwinism
Once again, the Darwinian tenets will prevail as resilience will be subject to how agile retailers can be at the new starting block when quarantine measures are lifted. The sooner, the merrier as the time left to catch up on lost sales, foot traffic, and business opportunities will mostly favor early adopters of agile bootcamps, scrum, lean thinking organizations with enough collaborative skillsets to fuel collective intelligence and holistic change.
Written by Dr. Jamal Boukouray, Ph.D. Have you read?
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