The global retail industry is experiencing an unprecedented crisis in the wake of Covid-19. Consumers are staying home and tightening their spending as they face uncertainties related to their health, wealth, and jobs.
This physical and psychological hunkering down is hitting retailers hard, as U.S. retail sales dropped a historic 8.7% in March, and moving forward are expected to drop 20% (at least) according to the National Retail Federation. Retailers are in turn laying off staff and scrambling to understand their options. Where are the opportunities for retail marketers and how can they minimize losses?
Deepen Your Customer Insight: Knowledge of your customers has never been more valuable to your business. Marketers need to analyze data about their customers’ behaviors and buying habits on a daily basis to learn what is changing and what is not. What new unmet needs have emerged? What new pain points have surfaced? What new markets are emerging for your company?
Cover The Basics: Let customers know if your business is operating and how you are keeping them and your employees safe. Many retailers have already sent emails notifying consumers about new sanitation procedures and other safety protocols. At Trader Joe’s in Chapel Hill, NC, for example, store managers stand outside the store limiting the number of customers entering and greeting queued-up customers with a cart they have wiped down with disinfectant.
Delivering food? How are you ensuring you are not spreading the virus and what tangible actions can you take to communicate this to your customers? Gloves and masks are clear signals, but don’t forget to add your own special touch to the encounter. Durham, NC restaurant Viceroy included a pretty bar of soap from a local vendor to remind people to wash their hands and to show it is supporting other area merchants.
Look For The Digital Meet-And-Greet: Social distancing has resulted in a huge spike in social media traffic. If that is where your customers are, that is where you want to be. Many companies worry that they will appear opportunistic if they engage with their customers during this difficult time. We think that is a mistake. If you have a relationship with your customers, they will want to know what you are thinking and planning, what is happening with employees, and that you miss them. For retailers with a lot of “brand love,” this will be a reminder of those positive feelings.
Adapt Your Offering To The Digital World: For companies without robust digital offerings, how can you move in this direction? Many brick-and-mortar retailers have set up online payment methods. Those without online stores are emailing customers to update them on new products in stock. Mail shipments or curb-side pickups are the new point of transfer.
Others are creating whole new ways to connect, such as local bookstores setting up digital book clubs, hair salons offering custom color kits, and acupuncture clinics running Zoom meetings to teach patients about remedies and techniques they can use on their own. Arts organizations are findings ways to provide fans with live-streamed concerts. Orange Theory Fitness quickly made its operations fully digital.
As you take these steps, ensure you are translating your value proposition to the digital world with fidelity. This means that the defining benefits of your business should come through. You might be surprised that digital offerings have some unanticipated benefits, such as giving customers extra time to learn more about your offerings (that might not be possible in a busy store), getting the back story on the source of a product or a provider’s training, or being able to pick a sales rep that they want to interact with.
Focus On The Experience: Companies should immediately evaluate their customer journeys and re-imagine those that could be redesigned for a digital-first/digital-only world. This includes everything from expanding capacity of your offering or customer service to putting a pause on certain late fees/cancellation fees. CX teams should consider what they can do to ensure a positive experience — and do it quickly because the pain customers will experience from the pandemic is likely to increase over the coming weeks and maybe months.
Experiment With Offerings With Long-Term Potential: Retailers can use this crisis as an opportunity to experiment with entirely new offerings that might be sticky — meaning they could survive the crisis. We see examples in the form of Netflix Party, which allows consumers to virtually watch movies with friends; breweries pivoting toward delivery; and restaurants introducing dining bonds, helping them to keep their businesses alive and giving consumers access to gift cards that increase in value after vesting.
Now is a good time to experiment. As you do, pay close attention to the response — who is responding, what else are they buying, and who is not responding? If you can do interviews to go deep with buyers and non-buyers — even better.
Don’t Let Your Brand Community Wither: What can you do to engage with your customers who love your brand but can’t visit your stores? Here is where you should strive to really be creative. Run contests for the next sandwich stack or donut flavor. Encourage at-home fashion runways with your merchandise. Ask consumers to post recipes for using your products in novel ways. Invite them to post karaoke or short skits about your brand. These acts engage your bored customers, but another important benefit is that they will keep your employees busy and focused on brand-building during these rough weeks. This means your company can surface post crisis with stronger customer and employee engagement.
Contribute Toward The Fight: Marketers who just push products in this environment will be met with a backlash. They need to express empathy and communicate social initiatives, too. In the U.S., companies like Carnival are offering their cruise ships to provide additional capacity for hospital rooms, distilleries are making hand sanitizer rather than alcohol, and Novartis and Bayer are donating millions of doses of chloroquine, which is being trialed for treatment of Covid-19.
More creative approaches have also surfaced, such as the swimwear startup Summersalt repurposing its customer service agents (many of whom have counseling backgrounds) to provide emotional support. Familiar Creatures, a Richmond, Va.-based advertising agency, is supporting local restaurants and breweries through a “Keep Calm and Nom Nom” campaign, which includes a website where customers can buy gift cards to keep these businesses afloat through these difficult months.
Plan For Life After Covid-19: We are only a few weeks into the period of social distancing and sheltering in place. While it’s still unclear when and how this will end, you need to be ready to reopen your stores. How will Covid-19 change your customers’ habits for the long run and what are you doing to get ready for this shift? Marketers must display a sincere desire to watch, listen, and learn. One thing we know already is that digital experiences are here to stay.
This is a moment of peril for retail marketers, but one that also contains a kernel of opportunity to come to the other side of these choppy waters with a more loyal customer base and stronger business model. We recommend that you jump in, learn fast, and think long-term even as you focus on survival these next few months.
originally posted on hbr.org by Christine Moorman and Torren McCarthy