Why Some Retailers Are Thriving Amid Disruption

Retailers who have successfully adapted to the current crisis offer a model for a quick digital pivot.

Big retailers who were not positioned to pivot during a crisis are now closing down. Other retailers have been forced to change course and adapt to digital work at short notice and some of them have done so successfully at a great cost.successfully.

J C penny closed down its operations and filed for bankruptcy. Target and Walmart quickly adjusted to the new situation and saw the sales pickup. In China, Peacebird, with 4600 brick and mortar stores saw a drop in Jan but recovered quickly in Feb. Forest Cabin, took to social media and managed to recover quickly. Caribbean Fashion, took to WeChat channel without leveraging the price discount and recovered. Ideal, a multi-brand jewelry store turned its sales team into Livestream broadcasters to manage a virtual store to navigate the crisis.

The resilience of these companies is due to a simple fact, they have transformed their traditional models rapidly by leveraging a range of digital practices. This is what retailers must do to survive and prosper. John Lewis, a UK based retailer is setting up an online hub advising parents, Target and Walmart are doubling their effort to increase curbside pickup, Nike launched Air Max March Party. The five lessons that retailers should follow to revive their business

Accelerate operations through multichannel marketing

Speed is paramount as retailers switch from offline to a mix of online and offline sales. Business leaders should reframe their current thinking of multichannel approaches to retail and adapt to live streaming to create direct real-time engagement.

Retain for revamps

many retailers are busy laying off employees while a few are reskilling their employees. Some companies are using the online corporate university to train the employees less experienced in social media marketing. Companies should take steps to retrain their employees across different positions.

Empower teams

Give the sales team more autonomy to decide on how to market and sell their products. The company can track the success rates of different formats and share the information, empowering the employees to use the collective data and knowledge. Companies may set up a scoring and measurement system for the front-facing employees, tracking the conversion rates to identify on-line sales practices that result in actual sales. Such activities motivate sales teams, provide resources, and offer quick feedback loops.

Fuel offline traffic

Physical stores are struggling against online players. It is an important asset to connect with customers despite the arrival of e-commerce. Couples with technology, brands can provide a seamless experience. Online success may fuel offline foot traffic. Different channels must be optimized and integrated.

Virtualize back-end supply chain

Retailers can gain agility by investing in virtualizing their back-end inventory systems, sharing the data with suppliers who can integrate it into their supply management systems. This would facilitate transitioning from push to a pull strategy and let the demand determine when and how production should be ramped up. 

This illustrates the wisdom of the saying "No crisis should go to waste."

Why Some Retailers Are Thriving Amid Disruption

Mark J. Greeven, Howard Yu, and Jialu Shan •MITSMR June 29, 2020