As retail businesses slowly begin to re-open, the question everyone is asking is what will be the new normal. It will be critical to consider not only how the pandemic has affected the habits of shoppers, but also what they will be expecting from retailers when they start returning to the physical store. Several key things to consider are:
1) How much of the current change in consumer habits will be permanent
2) How can small businesses adapt for growth post COVID-19
3) The importance of marketing and engaging with customers online
Change in Shopping Habits
With the ongoing uncertainty, there are key categories that will remain important for consumers over the next 6-12 months. Health is the new wealth, and there will be increasing demand for products related to personal care, wellness, and nutrition. After all, “in-homing” may end up being a permanent change for some companies and workplaces. Interior design services and home furnishing businesses have and may continue to experience a growth post COVID-19 as people redesign their living spaces. Categories such as electronics, home and kitchen appliances, media and gaming, toys, sporting goods, DIY, and crafts are expected to be in demand over the long-term.
New Behaviours and Shopper Expectations
Shoppers will not go back to their old ways post COVID-19. Even when safety is no longer a concern, some of the short-term behaviours adopted may become permanent — 29% of shoppers have stated that they are now making online purchases for items they would have previously only purchased in stores. On the other hand, shoppers will also crave that face-to-face human interaction they’ve missed after months of social isolation. This means that the focus should still be on creating a great in-store customer experience if you want to maximize the potential of your store. There will also be new expectations on what a great shopping experience will look like which is why the seamless management of both online and physical shopping is so important during and even after the pandemic. This can be something as simple as being able to handle inventory levels in real-time across all of your sales channels to avoid selling your customers products you don’t have in stock.
Consumers will also be looking at retailers to provide comfort and a sense of well-being post COVID-19 as the current demand for cleanliness is unlikely to go away any time soon. Frequent cleaning and investing in equipment such as hand sanitizer posts, plexi-glass screens, and contactless self-checkout options will be necessary as currently over 85% of US consumers prefer to shop in stores with no-touch options. Investing in new processes and training is also critical to ensure employees follow new procedures to make customers feel comfortable as they shop in physical stores.
Adapting for Long-Term Growth
Many retailers are now focused on trying to apply quick fixes to move online during the pandemic. But this is very different from planning for the “New Normal”, where your business will need the flexibility to serve your customers wherever and however they need to be served. Businesses will also need to consider the higher delivery and labour costs involved with digital commerce, and try to find new ways to up-sell and improve the size of baskets online or encourage curbside pickup in order to increase profitability. Modern retail software platforms such as TAKU support retailers with a single view of all the data across all of your sales devices (checkout tills, mPOS), all of your sales channels (in-store, online, social media, marketplaces), and all of your delivery methods (shipping or pickup). Unifying all of your sales, customer and inventory data will be critical to your being able to react quickly to meet the new expectations of the post COVID-19 shopper.
Re-Assess your Business to Remain Relevant and Manage Risk
For some retailers, now is also the time to review your business model, and reinvent. Local distilleries, apparel, and home furnishing stores have all adapted to help produce PPE to support frontline workers, and the general public. Meanwhile traditional wholesalers have started selling direct-to-customer. Restaurants have begun selling meal-kits, and creating mini storefronts for essential ingredients. More service-oriented businesses such as beauty salons or after school programs are now offering DIY kits or programs that enable consumers to use their products while in-homing. This type of creativity and resilience helps businesses to broaden their offering, and manage their risk in preparation for the potential second wave when flu season is back again.
As every country is at a different stage of the pandemic cycle, shopper trends will also differ by market. A key opportunity for growth will be to leverage technology that gives you operational flexibility and the ability to sell outside of your current market. With a second wave expected in the fall, and the economic pressures that are already being felt across markets, diversifying and broadening your consumer base online will be essential to managing your business risk locally.
Importance of Marketing
It is critical to continue to connect with your customers and community so they know when and how to support your business, even after your store re-opens. One advantage of marketing during a downturn is that it is now also cheaper for businesses to buy digital advertising. Companies have also rallied together to help small businesses which have struggled to quickly adapt to selling online during this pandemic. Local free marketing platforms such as Support Retail help small businesses by providing consumers with a tool that allows them to easily find local retailers by type, location, or alphabetically. Support Retail also helps provide free social postings for local retailers via its Facebook, Twitter or Instagram pages.
Facebook and Instagram have also introduced new features to help local businesses that have limited marketing budgets to set-up a more effective e-commerce strategy. #supportsmallbusiness hashtag, “support small business” sticker, “business nearby” feature, and business messenger inbox are just some of the tools developed to help users rally around local retailers. These tools enable small businesses to reach their audience online, and also run focused campaigns to local communities at a lower cost.
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After temporary shutdowns, provinces, states, and cities are getting ready to reopen again. Depending on your location and the industry that you’re in, you may or may not be on the path to resuming your operations. Whatever the case may be, there is a lot you can do to prepare your store for re-opening. Reference our checklist below when the time comes to start selling from your store again.
As the number of new COVID-19 cases slows globally, state and provincial governments have started re-opening the economy in phases. For many places, the first phase involves re-opening stores for pickup only. Depending on where you are located, this can even refer to curbside pickup only if you have an entrance that opens up to the street. In the US, States are managing the reopening of the economy and stores in different ways. Read more about how each of the 50 states are re-opening in the US.
For more information on Canadian workplace safety & guidelines for curbside pickup and re-opening phases during COVID-19, you can visit the different provincial resources below:
Set up curbside pickup on your e-commerce store. Find out how to easily set up an online store and offer curbside pickup on TAKU eCommerce here. Free access until July 1, 2020.
Enable staggered pickup times. Avoid big lineups and crowds by requiring customers to make an appointment to pick up their purchases. E-commerce providers such as TAKU eCommerce allow customers to choose a pickup time and date at checkout. Alternatively, you can use apps such as Eventbrite, Calendly or Acuity Scheduling, many of which are free for a single store account.
Install a stand with a transparent physical barrier for protection. Consider installing a stand outside your store with plexiglass to accept payments.
Encourage “Contactless” Payments (e.g. tap or Apple Pay) and discourage the use of cash to protect your staff wherever possible. You may even want to increase your “contactless” limit with your merchant processor but remember that you are liable for any potential chargebacks on “contactless” payments.
Get creative with window displays and merchandising. Re-do your window displays to show off new or popular merchandise, discounted items, and relevant products (masks, grocery staples, hand sanitizer etc.).
Place signage in the window: Put up signs to let customers know you are open for curbside pickup and/or delivery. You can also use signage to remind customers about social distancing procedures, your updated return/exchange policy, and store cleanliness or sanitation measures.
Offer customers hand sanitizer wherever touch is unavoidable.
Review receipt management procedures to train staff to put receipts directly into shopping bags instead of handing them to customers or, even better, ask if they are ok to receive their receipts by email. Remember that privacy regulations require that you get positive customer consent to save their emails for future use so an email marketing tool to capture consent that will allow customers to unsubscribe themselves.
Encourage social distance outside of the store by increasing the space outside the store where shoppers are waiting to pay. It’s as simple as adding tape on the floor to clearly show where shoppers need to stand. Costco has famously used pallets outside of their stores to enforce social distance requirements in an orderly fashion. Consider assigning an employee to assist customers waiting in line.
Make merchandising improvements at your storefront: Re-do merchandising displays and organize your store to display what you offer right at your storefront.
Organize back office tasks: Remember to review your fulfillment processes as your cashiers will need to have easy access to product or curbside orders at the front of the store to minimize their walking around the store. This way, when shoppers arrive to pick up their purchases or buy things, the checkout process will be faster.
Sanitize surfaces: Regularly sanitize high contact surfaces like PIN pads, checkout counters, door knobs, handles etc. Some customers will need to touch your PINpad to pay. Consider wrapping your PINpad with plastic wrap so that you can wipe it down with sanitizer between every customer but still protect the device.
Stagger employee shifts. In order to promote social distance, schedule a maximum number of employees per shift (2 or 3 employees per shift etc.)
Implement proper hygiene and social distances practices. Communicate new health and safety procedures to staff. Ensure proper hand washing, sanitizing, and overall cleanliness. Place signs in the store to remind employees to wash their hands, sanitize, and keep at a safe distance from one another.
Conduct a physical inventory count to verify inventory amounts. Record losses of inventory that is damaged / expired / spoiled. You’ll want to make sure that the inventory you have counted matches stock levels in your POS or inventory management system.
Review your inventory to decide what needs to be discounted and promoted immediately to bring in cash flow and to minimize your most outdated stock.
Contact your suppliers and vendors to get an update on order lead times and ensure accurate delivery schedules. You don’t want to sell what you can’t fulfill.
Contact your employees:Confirm readiness to return to work and good health.
Communicate shift schedules with employees once you’ve confirmed who is ready to return to work.
Inform staff of health and safety procedures going forward. Health and safety will be the top priority of both employees and shoppers for now. If it is not possible to always maintain the required distance from customers, you will need to look at both re-designing the layout of your store, the checkout procedures and supply masks, gloves and hand sanitizer where required for everybody’s protection.
Implement proper hygiene and social distancing policies: Post signage throughout the store, in break rooms, stock rooms, and the bathroom reminding staff to wash their hands and stay at a safe distance from other team members / customers.
Review loss prevention and security policies with employees. Don’t forget to review your POS access rights to make sure the staff permissions are still accurate.
Store Exterior and Interior
Ensure the storefront is clean by washing windows and doors, sweeping the sidewalk, and getting rid of any debris/garbage outside your store. Any areas of high traffic will need to be cleaned repeatedly throughout the day.
Place signage in windows and doors: This includes reopening signs, any promotional/sales signage, and health and safety or social distancing policies.
Sanitize doors knobs, handles, countertops, PINpads, etc. Any areas of high touch by employees or customers will need to be sanitized repeatedly throughout the day. Consider wrapping your PINpad with plastic wrap so that you can wipe it down with sanitizer between every customer but still protect the device.
Ensure the store interior is clean by sweeping and sanitizing floors, walls, fixtures, surfaces, displays, shelves, and windows.
Verify product tags and pricing and print new tags if necessary. Ensure all products are accurately priced and discounted items are tagged.
Have the store’s new merchandising plan and products tags ready for staff/merchandisers. You’ll want to ensure staff are scheduled to help merchandise the store before you open.
Fill shelves and displays with stock.
Place promotional signage around the store.
Hang health & safety and social distancing policies around the store so that customers will be able to easily read and understand the new procedures.
Re-stock employee equipment: Receipt papers, tags, printer paper, hand sanitizer etc.
Re-stock washroom equipment: Soap, toilet paper, towels, and hand sanitizer
Security, Technology, and Utilities
Ensure that your utilities are working properly:This includesheating, ventilation, and air-conditioning (HVAC), phone, internet, electricity, and plumbing etc. If any of your utilities were disconnected while you were closed, it’s a good idea to call the utility companies to make sure they are working before you re-open.
Check all surveillance and security cameras to make sure they are working properly.
Ensure alarm systems are working and consider updating alarm codes if needed.
Verify that your POS system, credit card terminals, and scannersare ready to process sales. Before opening, ring in a test sale to make sure your POS is good to go.
Make sure that your payment terminal (PINpad) is capable of accepting contactless payments. Know what your contactless limits are and increase them if you are comfortable with the higher risk (contactless “tap” payments are subject to chargebacks).
Post COVID-19 Health and Safety Measures
Install plexiglass barriers at checkout counters to protect cashiers who are ringing in sales. Look at merchandising display stores for pre-made versions designed for retail as it may be more costly to install and/or cut your own. The cost of standard plexiglass sheets has gone up significantly.
Promote physical distancing by placing shelves and displays 6 ft. apart and by placing signs around the store.
Purchase non-medical protective equipment (gloves & masks) for employees:You may want to encourage customers to wear masks as well. This is particularly true if you serve a demographic that is considered high risk.
Use signage and social media to communicate physical distancing policies: Place signs both inside and outside of your store so customers are aware of the measures you are taking.
Review your fitting room policy if you are a clothing or apparel store. Many stores are no longer allowing fittings and instead relying on better descriptions or even fitting technology.
Modify your return and exchange policy: You may want to put a hold on return and exchanges for the time being given the hygiene concerns.
Limit the amount of customers allowed in-store: To promote physical distancing, have a limit on the amount of shoppers allowed in store at a time. This can be handled manually at the store or by offering online bookings for specific time slots through apps such as Eventbrite or SimplyBook.me for scheduled shopping solutions with personalized check-in.
Regularly clean and sanitize all surfaces, especially your PINpads which can be wrapped with plastic wrap so that they can be wiped down with sanitizer between every customer while still protecting the devices.
Make hand-sanitizer available to customers.
Adjust your store hours:Consider shortening your opening hours to help staff keep up with the extra cleaning required and to give them time to replenish stock.
Promote on digital channels. Take advantage of digital channels such as social media, email, SMS etc. to let your customers know that your store is re-opening. Mention how your store is implementing health and safety procedures and physical distancing. Shoppers will still be hesitant to leave their homes. Give shoppers peace of mind that your store is safe.
Run promotions. It will take time for things to return to normal. Incentivize shoppers by offering promotional deals or by highlighting relevant products (e.g. face masks).
Update Google My Business. Make sure to update your Google My Business listing and let customers know you are open for curbside pickup or delivery. If you are planning on shortening your store hours, you should also adjust your hours of operation on your listing.
Get added to local directories. Adding your business to local directory listings (Bing, Yahoo etc) will make it easier for shoppers to find you online. Directories like Support Retail were created during the pandemic as a free tool to help connect local businesses to shoppers in the area.
We hope you found this article helpful!
For more information on how to take orders online and offer curbside pickup, click here.
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For retailers dealing with the impact of COVID-19, shutting down may not be an immediate option, particularly if they are an essential business in their community. Over the past 10 days, we’ve spoken with many small businesses who are looking for ways to better manage the impact. Scroll down for tips on how you can minimize the impact of COVID-19:
Sell Online and Stay in Contact with your Customers
Offer Contact-less Options. It is expected that shopper behaviour will be significantly impacted by COVID-19 at least until there is a vaccine developed next year. This means that shoppers will have health and safety top-of-mind for the foreseeable future. Prepare now to make sure you are prepared before your competitors. Take this time to set up “Leave At My Door” delivery options or “pre-scheduled contactless curbside pickup” with orders placed online, by phone, fax or email. These are great options as you have confirmed pre-paid sales before you pack an order, you minimize staff and customer exposure and you avoid the cost of packaging products for shipment.
Make sure you have a Google My Businessprofile and keep your store hours up-to-date. For a limited time, Google will be showcasing any Posts made on merchant GMB profiles to people searching locally to ensure that local businesses get more coverage in their community. GMB Local Posts are a free (!!) and effective way to stand out in local searches and update shoppers about any new offers, delivery options, etc
Connect with local businesses to pool resources. Large retailers who rely on delivery such as Amazon can’t ship products in a timely manner anymore. There may be an opportunity for your local businesses to step up, particularly if you supply complementary products by offering local delivery together.
Keep an eye out for government Requests for Proposals if you’re in a position to re-tool your business to help address the challenge of COVID-19..
Look for ways to leverage the new “Stay-at-home Economy,”the new market created by demand from family, friends and children in self-isolation as a result of coronavirus. There are reports of sizable increases in at-home related categories including: personal fitness gear, home office equipment, indoor games, home and garden supplies, educational materials and books, hobbies, entertainment-related electronics, direct-to-consumer (DTC) friendly products suitable for mail-order subscriptions such as coffee, etc.
Keep an eye on your POS sales datato see if there are new trends to make sure you are stocking and promoting the products that shoppers want now vs. what they wanted to buy a few months ago.
Take advantage of marketing offers to get free ad creditsto reduce the cost of staying in contact with customers. For example, Google has announced $340 million in Google Ads credits available to all SMBs with active accounts over the past year. Credit notifications will appear in your existing Google Ads accounts and can be used at any point until the end of 2020 across Google advertising platforms.
Be flexible and don’t be afraid to take action.A flexible and adaptable mindset is what will get you through this crisis. The situation is changing day-by-day which means you will need to make adjustments in your response. Even if you come up against resistance in the beginning, shoppers will eventually come around because people still need to buy and consume things.
Expect long-term changes in shopper behavior.While some pre-crisis shopper behavior will return, this pandemic will have long-term impact on general shopping behavior. Make sure you’re aware of those changes and adapt your business to match them. My parents are both over the age of 70 and have never ordered anything online in their lives. While they still prefer shopping in stores, needless to say, they are both avid online grocery shoppers now and will likely continue to buy more online in the future as they find it more convenient for re-stocking.
If sell B2B, find a way to pivot to target recession-resistant or essential companiesas they will be the most likely to invest in new products or services.
In-Store Management Tips
1) Encourage Visible Hygiene Management in store by having all staff use gloves or wear masks. Have hand sanitizers readily available at the checkout area, near doors with handles, etc. If possible, have staff wipe baskets or trolley handles before passing them to shoppers.
2) Have clear signage to help customers understand the impact of COVID-19 on your store and what to expect for their shopping experience. Download these signs from CFIB to customize for your own business: Temporary Closure Notice, Safety Notice to Visitors
3) Pre-pack bulk goods such as fresh produce wherever possible to minimize touch. Stop offering samples unless they are pre-packaged.
4) Encourage Social Distance In Store by increasing the space in the checkout area between cashiers and where shoppers are waiting to pay. It’s as simple as adding tape on the floor to clearly show where shoppers need to stand as Walmart has done. Costco has famously used pallets to enforce social distance requirements in an orderly fashion.
5) Merchandise for fast retail as most shoppers will be shopping for necessity versus discovery. Keeping in mind the social distance required for safety, you will want to consider moving fast-moving goods in an easier to access location.
6) Put up transparent barriers wherever possible to minimize transmission while protecting staff.
7) Encourage “Contactless” Payments (e.g. tap or Apple Pay) and discourage the use of cash to protect your staff wherever possible. You may even want to increase your “contactless” limit with your merchant processor but remember that you are liable for any potential chargebacks on “contactless” payments.
8) If you are an essential business that is still sourcing, pay special attention to your supply chain. Anything sourced from areas dealing with a surge in COVID-19 cases will need alternatives in place. If necessary, even look at your suppliers’ suppliers for critical products.
9) Minimize Any Processes that Require Touch such as loyalty programs that require a tablet or credit card terminals that require optional prompts. Print out a QR code or signage for your web site and encourage users to sign up on their own phones.
10) Review Receipt Management Procedures to train staff to put receipts directly into shopping bags instead of handing them to customers or, even better, ask if they are ok to receive their receipts by email. Remember that privacy regulations require that you get positive customer consent to save their emails for future use so use an integrated email marketing tool to capture consent that will allow customers to unsubscribe themselves.
11) Sell In Store Gift Cards with an Incentive (e.g. extra $15 for every $100 gift card) to encourage shoppers to come back to the store when things are back to normal.
12) Offer Free Pens to shoppers who don’t have their own. It’s a cost-effective gift that discourages the use of public pens and helps customers remember you. Remember to minimize touch when offering them.
13) Communicate Proper Treatment Procedures when staff are sick. Make sure all managers and staff know what to do when they are sick. There is a lot of information out there – be sure to refer to the most credible medical sources in your country. In Canada, that will mean the public health authorities for your province or territory. In the US, the CDC is a reliable authority for guidance. For further details, you can also review the steps to prepare worksplaces for COVID-19 published by the WHO.
14) Minimize the Number of Shoppers In-Store to protect your own employees and make sure that shoppers are both comfortable and safe while in your store.
👇👇👇 Scroll to Download our COVID-19 Survival Tips for Retailers!!
There’s no denying that we now live in a physically and digitally connected world. The benefits of being globally interconnected are visible in the growth and stability of the world economy over the past decade since the 2008 global financial crisis. But history and economies are cyclical. We were already looking at a potential downturn before the recent coronavirus global pandemic started but retailers are now looking at the most unpredictable global business environment in decades. This is where retail crisis management helps to give businesses options to manage the unknown.
For businesses that were launched in good times, owners will now need to quickly adapt to the challenges of managing uncertainty and risk. Like any other business, owning a retail store comes with its fair share of risks. Even at the best of times, store owners must deal with operational risks that impact cash flow. After all, the US economy was strong for the majority of 2019, yet U.S. retailers still lost 50.6 billion due to inventory shrinkage alone.
With the help of new technology, there are ever more ways to tackle theft and organized retail crime, but they are not the only challenges facing retailers today. Whether it’s a natural disaster in the form of a fire or flood, supply chain disruptions, or an employee ranting about the company on social media, unexpected retail risks can have a huge impact on your bottom line.
Fortunately, there are some things you can do to help minimize the risk of unexpected emergencies, plan for interruptions to your retail business, and do your best to protect your employees, assets, and reputation.
I’m not by any means a risk management expert. I am, however, a repeat small business owner. So I know what it’s like to face the terror of a sudden downturn AND not be prepared to deal with negative cash flow. If any of the tips below help others minimize their stress or better prepare for the next crisis, that’s good enough.
Environmental disasters are external crises that are generally out of the control of any one private business. These include forest fires, hurricanes and, of course, global health pandemics. Because these are environmental and often cannot be predicted, these are often the most costly. They usually impact the economies of entire countries, can cost billions of dollars in damage to affected businesses and homes, and require a long recovery time. Besides the $1 billion in lost sales experienced by retailers during hurricanes Katrina and Harvey, these disasters resulted in $125 billion in property damage.
Business Insurance for Major Disasters
Nobody really likes to purchase business insurance but it’s often critical to the survival of a company in the face of a business-interrupting disaster. Even if you don’t live in an area that is prone to serious storms or other seasonal events, you need to make sure you have enough insurance to cover fire/water damage for your inventory, assets or property. Not only is this type of coverage mandatory on some leaseholds, it’s the only way to protect yourself against legal claims if there is 3rd party damage during an incident, which is also a key part of retail crisis management.
It’s important to remember that environmental disasters can be considered “acts of God” or “force majeure” and can nullify some insurance depending on your carrier and the type of plan you have. While some companies will step up at times of crises, you shouldn’t count on the possibility of coverage in the middle of a disaster if your plan has such exemptions. This is exactly why you should always read your insurance policy to understand what type of financial coverage you are actually buying. If the language in the fine print is too much, write to your insurance broker to make sure they give you a clear written response on what coverage you get with your insurance premiums
Technology, Flexibility and Adaptability
Adaptability for a business today is often tied to flexibility and technology. How flexible your processes are will determine how quickly you can adapt to different market environments. For retailers, this means using technology and tools that will allow you to immediately change how you are selling or taking payment with customers. The latest cloud systems not only automatically back-up your data, they work on any device and allow you to sell wherever your customer is. So when your store suddenly loses power, you can switch from your till to your mobile phone to keep selling.
For retailers dealing with the impact of COVID-19, for example, shutting down may not be an immediate option. Small businesses who cannot afford to shutdown or are looking for better ways to manage the impact are encouraged to:
Encourage Visible Hygiene Management in store by having all staff use gloves or wear masks. Have hand sanitizers readily available at the checkout area, near doors with handles, etc.
Encourage Social Distance In Store by increasing the space in the checkout area between cashiers and where shoppers are waiting to pay. Stop offering samples unless they are pre-packaged.
Encourage “Contactless” Payments (e.g. tap or Apple Pay) and discourage the use of cash to protect your staff wherever possible. You may want to increase your “contactless” limit with your merchant processor but remember that you are liable for any potential chargebacks on “contactless” payments.
Minimize Any Processes that Require Touch such as loyalty programs that require a tablet. Print out a QR code or signage for your web site and encourage users to sign up on their own phones.
Sell In Store Gift Cards with an Incentive (e.g. extra $15 for every $100 gift card) to encourage shoppers to come back to the store when things are back to normal.
Offer Free Pens to shoppers who don’t have their own. It’s a cost-effective gift that discourages the use of public pens and helps customers remember you. Remember to minimize touch when offering them.
Communicate Proper Treatment Procedures when staff are sick. Make sure all managers and staff know what to do when they are sick. There is a lot of information out there – be sure to refer to the most credible medical sources in your country. In Canada, that will mean the public health authorities for your province or territory. In the US, the CDC is a reliable authority for guidance. For further details, you can also review the steps to prepare worksplaces for COVID-19 published by the WHO.
Limit Stock Quantities for any essential household and medical products to avoid stock outs.
Not all emergencies are external. There are a number of internal risks within a company, many of which aren’t any less significant to the survival of a business than, for example, a natural disaster. You’ll want to work with workplace safety experts if your workplace involves food, hazardous materials or any type of production but for most of us in retail, cash flow, reputation and operations crises are usually top-of-mind for small business owners.
Cash Flow is the Lifeblood of a Business
I’m not the first business owner to say that timing is everything when running a business. During good times, this can refer to being in the right place when unusual opportunities present themselves. During bad times, this refers to whether you are financially in a position to survive when there is an interruption to the business. And more often than not, retail crisis management refers to your cash flow position because you need to have access to liquidity or credit to be able to get through an unusually slow period – you can’t sell hard assets quickly or for a good price in the middle of a crisis. So yes, while a natural disaster is completely unexpected and is out of anybody’s control, what you can control is the position you are in when disaster strikes.
I’m certainly not trying to preach about the virtues of keeping unused cash in the bank (assuming there is even any) instead of reinvesting in the business, etc. But if you haven’t already, you may want to get approved for a line of credit only for emergencies when the business is booming or you have the opportunity to. The key is to get credit when you don’t need it and to not use these emergency resources for any daily operations. Yes, hindsight is 50-50, and this won’t help you if you’re already dealing with an emergency but history does repeat itself so can better prepare yourself for the future.
Operations Resilience Planning
Operations covers many different parts of a business. It’s not possible to list every area a business owner or manager can review but, by and large, most retailers should always have some sort of plan in place for:
Succession or delegation if management is incapacitated
Data loss or privacy breaches
Supply chain breakdown
1) Management Incapacitation
Nobody ever wants to think about a scenario in which they aren’t around. But the fact is, if you are a small business owner, you are likely an employer and others depend on you for their livelihood. You can plan for every possible risk but if you cannot issue payroll, approve payments or make important decisions when they need to be made, you’re exposing your business to extra risk. Make sure you have a contingency plan in place for your own responsibilities including who is authorized to access company bank accounts during an emergency. Speak to your accountant or lawyer to learn more about the options.
2) Data Loss or Privacy Breaches
Just as many people rely on smartphones to remember all of their contacts, the data you use to run and track your business is irreplaceable. In a retail business, this usually refers to your POS data. Not only is the information stored in your POS system critical to your business decisions (e.g. how much product to order based on sales, etc.), it’s also a legal requirement in most countries to both collect sales taxes and report profitability.
Not only do natural disasters damage physical structures like storefronts and warehouses, they can also lead to a loss of important company files and data. Environmental disasters aside, as a business, you are also exposed to ransomware or database hacks on a daily basis. Luckily data security is definitely something you can more affordably control now in the age of cloud computing. It doesn’t matter what type of technology you use in your business operations. Don’t take a chance with unexpected damages or hardware failure with your business data. Store it in the cloud, or better yet, use a cloud POS system so that you can run your business from anywhere. After all, even if your data is secure, you need access to your POS system and other retail management tools to be able to continue operating.
With GDPR in Europe and ever more privacy regulations everywhere around the world, it’s important for small businesses to start on the process of developing and implementing a privacy strategy to protect their reputation with customers. There’s no point stressing out over the fact that you may have missed certain regulatory deadlines. Regulators and customers everywhere would rather see that a company has a plan and is working on improving rather than giving up or saying “it doesn’t apply to me.” For some basic steps you can take to get started on how to better manage privacy in your small business, you can refer to this blog post.
3) Supply Chain Breakdown
If just one link in a retailer’s supply chain is broken, it can have a significant impact on business operations and profit. Which is why retailers need to be able to react quickly to unexpected supply chain events – whether it is a natural disaster, supplier failure, political or labour strife.
While there is no way to prevent these events from taking place, there are measures you can take internally to minimize the impact of such disruptions and be better prepared including:
Retail Crisis Management is Risk Management
Having total supply chain visibility involves looking at possible environmental, social, and political risks. Identify possible “what-if” scenarios – what happens if a supplier is facing a weather disruption and loses power? Do you have an alternative source? What if there are transportation delays? What if political events drive up prices of raw materials? These “what-if” scenarios are numerous and may seem unlikely to occur in the first place. But it’s important to know what that list looks like first so that you can start to develop contingency plans to have more options when an unexpected crisis does take place.
Look at manufacturing and distribution coverage
Depending on the size of your business, broaden your connections by reaching out to suppliers in different networks and regions. Seeking out alternate suppliers in different locations will help you re-route orders if one of your suppliers is negatively impacted by an external event.
Unexpected issues and events can arise when inventory is being transported to and from distribution centers. For instance, merchandise can be stolen, delays can occur, and weather disruptions can cause damage to roads and transport routes. To prepare for these risks, it’s important to have transport flexibility. In other words, if one avenue of delivery is disrupted, ensure that you have the capability to switch and depend on another logistics channel. If instead, you opt to go for a third-party logistic provider, it’s a good idea to ensure that they can also provide the same kind of flexibility.
Remember that changes in lead times with suppliers during a major disaster will likely change the speed and cost of transport you will need. Do a cost analysis of what your business can afford to spend to get products to you and make sure you have the credit or cash flow necessary to fund the upgrades. During an emergency, you may need to consider foregoing profits or even taking a loss simply to keep enough revenue flowing through the business to cover fixed overhead costs.
Brand reputation and reputation management are critical to a retailer’s success. In fact, a report done by Total Retail shows that 90% of shoppers have chosen not to purchase from a company because of its bad reputation. Which is why consumers are increasingly relying on reviews to determine the quality of a business.
But, certain circumstances can arise that can quickly impact the viability and perception of your brand – e.g. a distraught employee publicly telling off a customer, poor management of health risks, etc. – creating distrust amongst consumers, and so on.
Help your retail business build a reputable brand and better prepare for compromising situations:
1) Be transparent about company policies and preventative procedures
In the case of an external crisis, consumers start distrusting businesses. Under these circumstances, it’s best to get ahead of the situation by reassuring employees, suppliers, partners and shoppers that you are taking preventative action or being as proactive as you can. During the recent coronavirus pandemic, StichFix made sure that members were aware of the rigorous cleaning process their clothing goes through between rentals to minimize any fears customers had about the cleanliness of renting clothes.
2) Manage negative reviews promptly
Gathering customer reviews is one of the best ways to make a good impression on a potential shopper. And even if you receive negative feedback, remember that it’s normal (and more realistic) for companies to receive a few bad reviews, just as long as you respond promptly and clearly show to customers that you are taking action. To learn more about customer review management and how to respond to reviews, click here.
3) Clearly communicate staff expectations
Setting clear company expectations with every new employee will pay off in the future when you’re trying to contain a potential public relations emergency. You may not be comfortable with the unconventional employee handbook Telsa gives its employees but the point is that you can’t expect employees to know what you expect without giving them some guidelines. Depending on the size of your business, it shouldn’t be an extensive document but it’s worth those late nights or legal fees to get one prepared since you will be sharing it repeatedly in your company. And, of course, communication doesn’t stop with orientation or handbooks. Part of retail crisis management is clearly communicating with employees and setting a good example during and after any crisis. There’s no better way for senior management to walk the talk.
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This week, I sat down with Karen Wong, the CEO and Founder of both ACE POS solutions Ltd. and TakuLabs. Ltd. She stresses that while the retail industry is going through many changes, the reality is that, physical retail is far from dead.
About Our Founder
Before co-founding Takulabs, Karen has been a part of several ventures – from being a small retail business owner herself, to working in marketing,manufacturing, and wholesale. Her passion lies in helping retailers sell more by building solutions that drive store growth.
The goal of this video series is to share Karen’s broad knowledge of retail and marketing with fellow store owners.
This talk will dive deeper into the importance of physical retail and the pros and cons of physical retail vs. e-commerce.
Do You Think Physical Retail is Going to Die?
Everybody has probably heard of the “retail apocalypse” – meaning physical stores are dying. The headlines are all about how the big chains are closing down. But in my opinion, it’s heavily overblown. The reality is that 85% of retail is still physical!
It’s not just about one channel. Increasingly, it’s all about being accessible to customers wherever they are. Because customers don’t just want to engage through shopping – they want to engage through discovery.
What is Shopping and What is Consumption?
There is a difference between shopping and consumption.
Shopping means that there is a discovery process. It means you are looking for something but you need more information.
Consumption means you that you are just refilling the pantry. You buy the same brand every time so you just need to find a place to buy it from. In this case, people may just go online.
Why do you Push Physical Retail so Much?
A lot of our customers are established businesses. That means that they are already profitable businesses with fixed costs. But these fixed costs are covered by the fact that they have ongoing business that covers those costs.
Retailers should be leveraging their business while trying to grow their physical and digital channels.
Right now, many of our customers have those established doors and there’s so many reasons you want to push physical retail vs. only e-commerce.
When people say that “I have to go digital, I need to open an e-commerce store”, my first question to them is: have you optimized everything you are doing in your physical store?
You already pay those fixed costs. Everything you sell, you make a higher margin because your fixed costs are already covered.
What are the Pros and Cons of E-commerce vs. Physical Retail?
There are so many pros and cons to e-commerce.
Pros: everybody wants to be found immediately and they want their catalog up there – because shoppers like to see that information. But at the same time, there are huge costs associated with e-commerce.
People are much more price conscious online vs. in-store.
Free shipping is a massive cost.
People are more inclined to return items online. The return rates are proven to be more than double than what they are in-store. People are more likely to return online because there isn’t that interaction where people have guilt involved – when you are returning something to the store and you know it shouldn’t be returned.
So you have to think about these additional costs of going digital. Even though there are supposedly no overhead associated with those sales.
What are the Benefits of Leveraging Physical Retail?
Other things you want to think about is that if you don’t leverage physical retail, you are missing out on things such as impulse buys. When a person comes into the store looking for one thing, they often leave with multiple things. It happens to me and still happens to me all the time!
You should also consider thinking about cross-selling and up-selling. You have people in the store and you yourself (if you are in the store) are probably the best person to tell people “that item that you’re looking at really goes well with this”. Or maybe even get them to buy something even better than what they were originally considering.
The Future of Physical Retail
All of these things and moments are part of the reasons why I don’t think physical retail is going to die. It’s just going to be a major core or focus of retail as we move forward.
I mean after all, you are seeing more and more pure e-commerce businesses are opening physical stores because they’ve realized they can make more money in physical stores than they can online.
It means more engaged customers that come back with repeat business.
Data Analytics in Retail
Another thing that you want to note is data analytics in retail(this is where I talk a lot to customers about using technology). Those stores are famous for using data and using the data well to make sure that everything they are doing in that physical store is being driven by some type of statistic or analytics.
This is kind of my reason for encouraging customers to really reconsider re-vamping or reviewing the operations of their physical store first.
But what are the benefits of having cloud technology in your retail space?
3 Key Benefits of Cloud POS for Retailers
1) The ability to sell and operate from anywhere
Web-based POS solutions store data in the cloud which makes them available around the clock for authorized users to pull reports or manage inventory right from the comfort of home or while on a business trip. In comparison, traditional, installed software requires managers to be on-site in order to gain access to important business information such as sales and inventory reports.
With a well-designed cloud POS system, retailers also have the advantage of running their POS software on any hardware from iPads to Windows computers. This flexibility means that retailers are not tied to a specific operating platform. Retailers using traditional POS software and are looking to make the switch to cloud, can do so easily with their existing hardware.
2) Reduced Ongoing Costs
In the long-term, cloud POS software is more cost-efficient than traditional software. This is due to the elimination of many hidden ongoing maintenance costs associated with installed software. In comparison, cloud-based POS solutions requires minimal upfront investment, have little to no downtime during updates, and reduce the amount of in-house technical support and post-sales support required.
3) Access to Real-Time Business Information
Cloud POS software also comes with the benefit of easier access to real-time information. In other words, inventory and sales data is updated as products are received or sold rather than every few hours or daily. If used well, more timely data can help to eliminate significant inventory costs by minimizing stock-outs or overstocking slow sellers. This is particularly important for retail businesses that have multiple locations where consolidated sales and inventory data is critical to purchasing decisions. At the same time, a well-designed cloud POS software will have real-time marketing integrations that help drive more local traffic to your retail store.
For more information on how retail technology can be used to drive growth and improve operations, sign up to receive our monthly blog updates.
I’m Karen Wong, contact me if you’d like to connect. Follow me on LinkedIn.