[COVID-19] New Retail Practices
Updated: May 26, 2020
The current epidemic has had unparalleled consequences on the retail sector. Now that the world's economies are putting an end to confinement measures, with Montreal soon to follow, it's time to look at three retail practices brought on by the coronavirus that are here to stay.
A Rise in Contactless Payments
With the looming fear of community transmission, cash payments were one of the first things to go in the retail sector. From a sanitary standpoint, it makes sense to privilege contactless payment options such as tapping a credit/ debit card or using a mobile payment app. This practice was also helped by the raising of the tap limit by Visa and MasterCard. After nearly two months of practicing social distancing, it's fair to say consumers have gotten used to this payment method, and they'll probably keep this habit in the coming months as the specter of further contamination waves remains very real.
From a business intelligence standpoint, this is a true blessing for the data-driven enterprise. If your business hasn't integrated customer data into its decision process, now is the time to get on it. All these transactions are a valuable source of information on your customers and their purchasing habits. With a bit of analysis, you'll be able to optimize your product offerings, get to know your customers better, adapt your promotions based on real sales data rather than hypothetical insights from your market studies... the possibilities are endless! But, hey if you don't believe us, check out this 2015 report from McKinsey on the impact of Big Data on the future of marketing and sales.
If you want to find out more about this topic, check out this article or our Services Page to learn more about how we can help you use sales data to enhance your business' performance in convenience stores.
Rethinking the in-store customer journey
In an effort to promote social distancing in stores, retailers have tested out one-way aisles to avoid proximity between shoppers. Whether this is actually respected by customers is another story, but this new reality means the customer journey in-stores is not the same as it was a few weeks ago. And that means that the prized shelf-space you negotiated to maximize your brand exposure in the store's aisles might not be so valuable anymore.
What's worse is that in smaller stores, this one-way traffic might not even be official; however, wary customers may deviate from their path to avoid close contact with each other. As a distributor/ vendor, it's up to you to find out where the new strategic locations are and get them for yourself before your competition has time to act. You also have to consider what shoppers are buying to face the pandemic: essentials are practically being fought over, so placing your products near these items might be worth considering. This requires having a sizeable workforce to visit all the stores in your network, but the gains will be worth the effort, especially if these measures are maintained for the next few months.
If you're concerned about losing your hard-fought shelf-space, visit our Services Page to find out how we can help adapt your store presence to these new measures.
Fewer visits, bigger quantities
Customers are making less frequent trips to stores, especially larger ones, to avoid contact with others as well as the waiting time brought about by the limitations of the number of shoppers inside stores. In an effort to maximize the purpose of each visit, they are also buying bigger quantities, which stores are now realizing as April's revenues are down after March's stockpiling frenzy.
As a distributor/ vendor, you may have noticed that your larger SKUs are currently more popular than smaller ones as a result of this behavior. If that's the case, then it's time to negotiate more shelf-space for your larger packs in order to satisfy customer demand. You can also set up cross-selling promotions for your smaller SKUs to boost sales or with new products to get consumers to try them. Less frequent store visits are also an opportunity to bolster down your supply chain so your products are in stock when customers actually visit the store: you don't want to lose to them to your competition simply cause your products are out of stock! Now more than ever, it's important to be in close contact with your sales points to get the pulse of local demand, be able to adapt your product offering to any changes and make sure your products are ALWAYS available.
In conclusion, these three changes brought on by the new coronavirus are probably here to stay for the months to come, so it's up to you the seize the opportunity and adapt your business to these changes. While we all hope things will eventually go back to normal, the reality is we're going to have to live with this new reality and there's no real choice besides adapting to and embracing change. Crises have a tendency to speed up evolutions in the marketplace, the real question is are you going to try and capitalize on them or are you going to sit on the sidelines hoping everything we'll get back to normal?