March 2020 really was the month that the world woke up to COVID-19 as numerous countries beyond China faced down this terrible disease. Our new reality is very much setting in and for many people I speak to, whether its Chief Supply Chain Officers through my work here at Gartner or friends and family via Zoom, Houseparty or an old school phone call, people increasingly speculate as to when things might return to ‘normal’. Predictions are often made for 6, 9, 12 or even 18 months time, however, the reality is that the sheer scale of uncertainties associated with COVID-19 is so vast that we simply cannot yet know. Consider, for example, that until the COVID-19 outbreak the highest volume of people filing for unemployment benefits in the U.S. over the last 50 years was slightly less than 700,000 yet last week this number rose to 6.65 million people!
For many retail supply chain leaders, this challenging world drives us towards safety in what we know. We fall back on our tried and tested ways, trying to create models and scenarios that predict the future. We build business continuity plans. We spend our energy on the nitty gritty detail. But we also need to remember that given the huge volume of uncertainty we face today that this must also be a time for new, more agile approaches (check out this excellent video or article from 538 that details why its so hard to build a model predicting COVID-19). That by taking small steps then reassessing and iterating very frequently we can enact change in our organizations that brings positive results for our consumers. Just as importantly, we need to ensure that despite many of us working remotely we still effectively and regularly connect to people. We need to think about our network. Who can open a door to something which can help our business or our society? Just look at the numerous great things vertical retailers such as Gap, H&M, Hanes Group, Kering Group (owner’s of Gucci), Uniqlo, Zara and many more are doing in terms of producing personal protective equipment.
Not surprisingly, agility was recognized as a critical supply chain capability in a series of interviews I’ve conducted in the past 2 weeks with numerous retail leaders. Specifically they identified it’s importance in:
- Dealing with the significant disruptions associated with COVID-19 such as the ability to rapidly stand up a new distribution center to support excess inventory in an apparel business, or the ability to closely work with suppliers to identify, produce and distribute the critical products consumers have been demanding in grocery.
- Enabling a retailer to succeed through the transition, given the huge uncertainties around demand, supply and workforce that will continue to exist within our society until a vaccine is identified or herd immunity is reached.
- Positioning a retailer to accelerate as we approach and enter into a ‘new normal’ where the threat of the virus has been extinguished.
(If you’re interested in broader insights on Supply Chain Agility, this is a topic I’ve been writing about and discussing for some time. My most recent research on the topic, produced in collaboration with the brilliant Pierfrancesco Manenti can be accessed by Gartner clients here: The Agile Supply Chain Imperative: Defining How Companies Can Sense and Respond to Change)
Finally, below is this week’s selection of interesting links related to COVID-19 from across the web that I hope you’ll enjoy:
- Great insight into what everyone’s getting wrong about the toilet paper shortage
- A useful tracker of how retailers are treating their key stakeholders (employees) amid COVID-19
- Interesting analysis of Nike’s successful COVID-19 response efforts in China.
- Data showing consumer intent to spend dropping by more than 50% in Italy, Spain, U.K. and U.S. across numerous product categories including apparel, footwear furnishings and restaurants.
- Excellent research by my colleague Courtney Rogerson, accessible by Gartner Clients only, that details how Freight volumes were signalling a global economic contraction before the COVID-19 outbreak and includes the below graphic.
Until next week – stay safe, look after your family and social distance.
Note: I’m currently planning to publish a blog each Monday morning for the next month on retailers and COVID-19, so if you’ve found this one useful please do look out for a notification from my account on LinkedIn.
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