The Great Retail Reset – Thinking Across Multiple Time Horizon’s as We Look Towards Our ‘Next Normal’
For the past few weeks in this blog I’ve been focusing on the near to medium term retail response to COVID-19. How are retailers getting through this crisis? What actions are they taking? And can we gain directional insights from China post-lockdown?
However, I believe it’s time to start to look further towards the future. Not because we know exactly what it will look like, but because our ability to think across multiple time horizons provides opportunity during crisis. Having our eyes open to these opportunities will be critical for success whether our ‘next normal‘ is established in 6 months, a year or some time beyond that.
So what are the three critical time horizon’s we’re focusing on here at Gartner?
For many of us this is the time we’re still in or perhaps just coming out of that’s involved a number of short duration, high effort temporary fixes and immediate actions. Sudden shocks to the operating environment have occurred and may have been negative (forced store closures) or positive (demand spikes for necessity items) or even tangential (transitioning from production of apparel to PPE).
Leaders are already in this phase and are looking towards the medium term. For many they are thinking about what does the recovery curve look like (see below examples) and trying to make a more organized and coordinated effort to prepare for the future. Efforts are being made to prepare for an economic restart as retail stores start to re-open (this has already begun in some markets such as South Korea, Austria and even Italy). Focus is being applied on restoring operations to a scalable state while identifying capabilities that have to be strengthened or rethought.
This is the more long-term view where strategic analysis of the current ways of operating takes place. Rehabilitative fixes are applied – for example the acceleration of efforts to integrate online and physical retail via a single pool of inventory to support sell-through and, where possible, minimize mark-downs.
Learning’s and emergent patterns are leveraged from prior phases to support the establishment of a new business foundation. Business and operating models are analyzed and potentially reset as leaders prepare for what is likely a new reality.
This is where the rubber will really hit the road and leaders will be able to find opportunity during the disruption. Perhaps it might be a new approach to your product portfolio? How products are distributed? Increased collaboration? Or even changes to items are sold? Perhaps there are other big changes you’ve desired that can drive real value for your organization but have historically not been palatable to key stakeholders?
Food For Thought
Below are this week’s selection of interesting reads related to COVID-19 from across the web:
- Last week the Chinese Government released their monthly economic report showing, among other things, a 19% year-on-year decline in retail sales of consumer goods for the first quarter of 2020.
- An interesting insight from the Wall Street Journal (paywall) on how Amazon is adjusting to the COVID-19 pandemic.
- A report by the Hong Kong Retail Management Association has indicated that as many as 1 in 4 Hong Kong retail stores may close by the end of 2020.
- Insight into the actions being taken by Levi’s to stand up their fulfillment from store operation and potentially start selling inventory stuck in stores that cannot open to the public.
Gartner is producing a wide array of content focused on all of the above areas with a significant of research made publicly available here. For Gartner retail clients, one of the best, most useful documents published in recent days is by my colleague Bob Hetu: Beyond COVID-19: Impact Severity and Recovery Framework for Apparel and Footwear Retail
Until next week – stay safe, look after your family and social distance.
Note: I’m currently publishing this blog each Monday morning (US Eastern Time) so if you’ve found this one useful please do look out for a weekly notification from my account on LinkedIn.
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