For more than a year, pandemic-induced social and economic upheavals have been wreaking havoc on the retail landscape, forcing businesses to grapple with shifting industry regulations and drastic changes to supply chains, revenue streams, and consumer behavior.
Despite the fallout from Covid-19 which has led to business closures and the permanent loss of thousands of retail jobs, a number of retailers have not only survived or recovered but thrived during the pandemic.
Why have some businesses done so well while others have struggled? Having lots of cash reserves helps, of course, but whether it’s a large enterprise, small business, essential or non-essential business, retailers that have succeeded during Covid-19 have some things in common.
Top retailers stayed on top
Other than minor shuffling amongst some of the top retailers as Amazon moved into first place after achieving 40% growth year-over-year in the second quarter of 2020, the pandemic and its restrictions have reinforced the dominance of retailers that were already at the head of the pack.
Big Box stores Walmart, Target, The Kroger Co., Costco, general pharmacies Walgreens and CVS, and hardware and home improvement retailers Home Depot and Lowe’s all remained in the Top 10, and have all experienced significant increases in sales year-over-year.
All Top 10 retailers were considered essential during pandemic lockdowns and stay-at-home orders, but they also made changes to their operations during Covid-19, including improving their digital presence and modifying customer service, pickup, and delivery options.
Focusing on the customer
Since the start of the pandemic, the average consumer has changed, and this new consumer now expects more: more value, more personalization, more flexibility. Consumers are interacting differently with brands across both online and in-person channels, and retailers have had to adapt to make sure to meet customers where they’re most comfortable.
A recent report by Raydiant shows that a majority of consumers no longer prefer to shop in person; at the end of 2020, 46% preferred in-person to online shopping, a drop of 9% from the previous year. For the brick-and-mortar retailer, this isn’t necessarily bad news, as long as the physical store is supported by an integrated online presence, and vice versa.
Going digital – and staying there
The further removed we become from the era before Covid-19, the clearer it is that digital adoption is here to stay, but physical stores are still at the heart of the shopping experience.
Consumers are indeed spending less time in stores, but when they do visit, they’re more likely to make a purchase. A report from Global Data also reveals that, even during the peak of lockdown, only 30% of retail sales were transacted online. Of those purchases, many were ‘click-and-collect’, indicating a preference for local, physical retailers purchases, even when buying online.
Ensuring the integration of online and in-store sales platforms to ensure that stock levels are reflected in real-time across all channels, ensuring a high level of customer service, and projecting a consistent brand message have all characteristics of successful retailers throughout the pandemic.
When they do go in person, customers are now more likely to research the business online beforehand, including looking into the store’s health and safety protocols. Klēn makes it easy for you to not only communicate all your business’s health practices and safety measures to your customers but also makes it easy for them to provide direct, real-time feedback about their experiences and expectations.
It costs at least 5 times as much, and up to 25 times as much, to acquire new customers as it does to retain existing ones, but 58% of consumers will switch companies because of poor customer service. Even though 86% of companies see the customer experience as driving loyalty and retention, many companies devote significantly less attention and fewer resources to customer service and loyalty than to customer acquisition.
Early on in the pandemic, Lush, a cosmetics brand, continued to provide excellent customer service even as they worked out bugs in their online ordering and in-store pick-up systems, which has helped build their loyal following and turned many customers into brand advocates. Outdoor retailer REI has seamlessly integrated omnichannel offerings with a strong loyalty and rewards program, incentivizing consumers to keep coming back.
Having a handle on cash flow and credit
Even in relatively good economic times, small businesses rarely have large sums of cash to spare. During unpredictable fluctuations brought on by a global pandemic, the need for cash reserves and a clear understanding of available credit options is critical to creating a viable game plan and forecasting potential financial issues.
Adapting to changing consumer priorities
According to McKinsey’s Consumer Insights Survey, 76% of consumers tried new brands during the pandemic, citing value, availability, and convenience as their reasons; 64% intend to continue with their new patterns of behavior post-pandemic.
As spending patterns have changed to reflect new consumer priorities around health, social and economic upheavals, businesses have had to appeal to new needs and concerns and operate within the bounds of rapidly changing rules and regulations.
Retailers have had to meet customers where they are, whether it’s with meal kits, online customer service, or curbside pickup, and to stay relevant to and provide value, even as priorities and expectations continue to shift.
Communication and transparency
Especially during uncertain economic times, customers need to know why they should trust an individual business with their hard-earned income, and now more than ever, they also need to trust them to look after their health.
By clearly communicating about health and safety measures to customers and employees while creating or bolstering operational efficiencies for long-term flexibility, businesses are better positioned to continue to succeed and weather future disruptions well after the current pandemic has passed.
Through their consumer app, Klēn provides a direct channel of communication for businesses to keep customers looped into any changes to health and safety measures, and gives businesses quick access to the new government and industry guidelines and CDC recommendations so they can focus on implementing best practices to keep their staff and customers safe.