Ahead of non-essential shops in the UK re-opening on Monday, supply chain expert Blue Yonder and IT services company Insight, warn that flash sales are a quick fix, which will result in longer term problems
Wayne Snyder is VP Retail Industry Strategy EMEA at Blue Yonder says: “Retailers need to act flexibly and treat this as a ‘Temporary Normal’: the ‘New Normal’ will come further down the road, when COVID-19 is no longer a threat. They must adapt to this unique scenario, making themselves flexible enough to respond to changes in shopping behaviour, while also keeping staff and customers safe. For example, how are stores going to manage limited physical interaction with shoppers and what will be the impact of certain items being placed in quarantine for a number of days? A lot could be learned from shops that remained open and adapted their operations during lockdown, whether that’s stripping back the range of products and services on offer, or offering Click & Collect pick-ups outside stores.”
Big-bang sales will cause longer-term problems
“Retailers will be keen to get tills ringing, but their brand propositions and profits could be eroded by blockbuster sales. Rather than making broad-brush reductions, retailers must consider the best approach for individual items whether optimising price changes, extending product lifecycles to the Autumn, or identifying which items could be stored and sold next year. Some markdowns will be necessary, but these should happen on an item-by-item basis, rather than a wide-ranging half-price sale across everything. It is here where AI and machine learning can drive a much more intelligent approach to pricing, making recommendations on a range of factors including weather, availability, consumer demand and wider news events. This will make a crucial difference at a time when retailers need smart pricing strategies, to ensure unsold stock doesn’t sit on shelves in store or in warehouses.”
Increased automation will help retailers get back up to speed
“During lockdown, consumers have forgiven retailers’ supply issues, but this honeymoon period won’t last much longer. A recent study from Warwick University found retailers’ attempts to react to changes in demand and supply during the pandemic were hampered by a reduced workforce, and over-reliance on manual processes. To meet this challenge, many retailers will invest a lot more in their supply chains to drive greater flexibility, visibility and automation. As we return to some normality but with backdrop of the pandemic still in people’s minds, consumers will expect goods to be available in store to avoid making wasted trips, a store layout that keeps them safe, and a more unified digital experience overall. If retailers cannot get back up to speed and give people what they want, when they want it, many of their customers will not be back.”
José Manuel Benedetti, principal architect at Insight, says retailers can use technology to identify potential illness in staff and customers, but need processes to react in a way that is both safe and appropriate. He also says retailers should consider whether some of their behind-the-scenes staff need to be physically present at all. He adds:
“Shop staff will understandably have their reservations about returning to work, so making them feel safe needs to be a top priority. Screening, such as temperature checks, will help employees feel confident they and their colleagues are not showing signs of the virus. However, physical checks at an entrance can cause as many problems as they solve; creating crowded bottlenecks and making employees nervous. Instead, smart thermal cameras can see if employees have a raised temperature as they enter or move around the store; raising the alert if an employee might be sick and letting the retailer respond – from further tests, to checking where the employee has been and who they might have had contact with.
“Retailers also need to be wary of their responsibilities to customers, and their customer-facing staff. Smart thermal cameras can help identify customers who might be sick, but they can also help make sure customers observe social distancing. By alerting shop staff when a customer is potentially ill, or isn’t social distancing, the retailer can make sure it acts in the right way: avoiding confrontation while also minimising the risk of infection. What any system needs isn’t just the right technology. It needs the right processes in place to treat staff and customers respectfully. For instance, retailers shouldn’t make a huge public reaction when they identify a potential COVID case, and need to be aware of how they use, store or delete the data they gather.
“Finally, retailers can reduce risk by asking whether workers need to always be physically present to do their jobs. While there will always need to be customer-facing staff, many behind-the-scenes processes could be carried out differently. For example, warehouse stock checks could be automated using RFID tags, and if there appears to be a problem, smart glasses or AR headsets can give a remote first look. Essentially, remote working isn’t only for office jobs – retailers can feel the benefit too.”