How the pandemic is reinventing retail

The third year of the COVID-19 pandemic begins with the retail industry weary of the battle but surviving and in some cases even capitalizing on an epic worst-case management crisis. The good news is that the 2020 retail apocalypse, after clearing the ground for weak competitors, has prompted surviving brands and businesses to rethink and reinvent the way they do business.

We know what is wrong. Now what?

A key concept that will shape the future of the industry is collaboration, both within companies as well as between retailers and their sources, partners and customers. This is new, a fundamental change from the way the industry has operated for a century.

My first introduction to the dysfunctional aspects of retailing dates back to the early years of my career, when I was working for a supply chain technology company. We focused on logistics, product and demand forecasting, just-in-time inventory management, etc.

Forecasting in retail is tricky, especially in apparel where collections are known to be dead on arrival because consumer tastes changed after orders were placed. It became clear to me then that the problem was the way retailers have always been managed, in silos.

Manufacturing, logistics, merchandising, sales – each department in the companies we often worked with had their own data, their own spreadsheets, and their own forecasts. Often they disagreed and this is where the problems would inevitably start. Each ministry had its own version of the truth, and as the saying goes, we are all entitled to our own opinions, but not our own facts.

We have helped corporate clients break down barriers, applying new technologies and enabling a collaborative working environment.

The result was a “one-size-fits-all version of the truth” of a forecast, which led to reduced error rates.

In the wake of Covid-19, the goal today is company-wide transparency and to ensure that the customer experience is as smooth as possible. The future of retail begins with the kind of customer and transaction data mining that has made Amazon the monolith it has become.

For example, Ian Wilson, CEO of the UK chain Hotter Shoes, explained in a recent interview how the direct-to-consumer sales company analyzed its database of 4.6 million people who purchased its products. At first, the base was mostly 55 and over and the average age was 73, a potentially difficult demographic for future growth.

“2020 has been a year of survival for us,” Wilson said. “The pandemic gave us a license to try new things. We are looking at how we can use this database to sell them other products besides shoes.

The company focused on recruiting younger clients and reduced the average age to 63. Hotter also used its customer database to test new styles of shoes and even manufacturing modifications to popular items.

It is this collaborative and connected model of examining a business challenge and finding a “single version of the truth” (aka “single customer view”) to agree on that paves the way for resolution. of the problem.

In the most dramatic way possible, the pandemic was what Austrian economist Joseph Schumpeter meant in 1942 when he coined the phrase “creative destruction” to explain why innovation follows economic disasters. The retail theme for 2022 will be pervasive innovation, less waste and more sustainable businesses. I wish us the best for 2022 and beyond.

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