Many countries around the world are now entering the next ‘Delay’ phase of tackling the Coronavirus outbreak. Key fellow thought leaders have published further revealing and informative updates and guidance for businesses this week in the wake of these fears. There is little to cheer Bricks and Mortar retailers beyond announcements in the UK Chancellor’s March 11th 2020 Budget, which at least proposed support packages for staff sick pay refunds, among other measures.
While online purchases will compensate for the forecasted huge drop in Customer footfall, retailers with little or no online offer will inevitably suffer. It has never been more imperative to look to expert retail productivity experts SWL for data-driven insights into modifying your operational strategies to dynamically manage variations in sales volumes.
Below are brief abstracts of several excellent articles, from MIT, McKinsey & Co, RetailDive and BusinessInsider.
MIT’s Michael Hudecheck et al give guidance on ‘Best Practices to Guide Countries Through the COVID-19 crisis.’ They draw on successful strategies employed in China, where the spread of the virus shows sings of being contained, with just 36 new cases reported on 12th March 2020. These strategies include:
Develop an Infrastructure for Remote Work
MIT believe there are measures managers can implement in order to maximise the effectiveness of this remote work option:
- ‘If you are not already doing so, allow your employees to telecommute. Train your leaders, and implement rules on acceptable working hours
- Identify employees who are most crucial to maintaining business continuity.
- Develop a disaster scenario that incorporates telecommuting. How would your organization operate if there was a quarantine that shut down geographic areas where you operate? ‘
Be Ready for Operational Shocks
‘Our [MIT] data shows that the lack of available operating funds is one of the most frequent concerns expressed online by Chinese SMEs.
If you believe your organization could find itself in troubled waters because of COVID-19, start the following now:
- Have at least one to three months of cash on hand.
- Know what your options are for extending loans, terms, and other short-term obligations.
- Have an adequate buffer stock of crucial parts and other inputs on hand
- Try to get an understanding of how prepared key suppliers and other stakeholders are for an unexpected event. ‘
Become a Community Player
‘Charity is an important response to natural disasters such as COVID-19. In addition to simply being a good practice for ethical reasons, there are empirically established correlations between charitable activities and future financial performance, improved relations with government authorities, and reputational legitimacy. Companies that recognize the stress on social systems during medical emergencies are more likely to do better afterward than companies that do not. Corporate charity provided by local companies has a particularly strong and positive effect.
China’s largest private companies have taken the lead in providing outreach during these first few months of the crisis, and the reputational effects are apparent on traditional and social media. If the COVID-19 epidemic comes to your town, you should be prepared to help. Here are three ideas drawn from the Chinese examples:
- Target non-profits and community outreach organizations in your local area. Corporate generosity has a much larger impact when it is provided directly to a local community.
- Encourage volunteering by your workforce. Employees who have the option to participate in corporate volunteer programs are more likely to participate repeatedly.
- Let others know what you’ve done. Release a succinct external announcement when you make donation. Don’t boast: Provide only the most pertinent details, including the amount of funds committed, the key beneficiaries and recipients, and what you aim to achieve with your donation. Include a quote from your executive leadership team.’
In this week’s article by McKinsey & Co, illustrations are made based on three ‘prognoses’ of how this global pandemic will pan out. Each projects very different potential implications on worldwide trade, supply chain, customer demand, GDP and economic recovery.
1) Quick recovery
2) Global slowdown
3) Pandemic and recession
What actions can our businesses take?
Importantly, the report provides seven actions for businesses to help mitigate against these unique challenges:
- Protect your employees. They can start by drawing up and executing a plan to support employees, actively benchmarking their efforts against others to determine the right policies and levels of support for their people, and providing autonomy to them so they feel empowered to deal with any quickly evolving situation.
- Set up a cross-functional COVID-19 response team. These ‘should define specific goals for the next 48 hours, adjusted continually, as well as weekly goals, all based on the company’s agreed-on planning scenario.’
- Ensure that liquidity is sufficient to weather the storm. ‘Companies should define moves to stabilize the organization in each scenario (optimizing accounts payable and receivable; cost reduction; divestments and M&A).’
- Stabilize the supply chain. Companies need to define the extent and likely duration of their supply-chain exposure to areas that are experiencing community transmission, including tier-1, -2, and -3 suppliers, and inventory levels.
- Stay close to your customers. ‘Companies that navigate disruptions better often succeed because they invest in their core customer segments and anticipate their behaviors. In China, for example, while consumer demand is down, it has not disappeared—people have dramatically shifted toward online shopping for all types of goods, including food and produce delivery. Companies should invest in online as part of their push for omnichannel distribution; this includes ensuring the quality of goods sold online.’
- Practice the plan. ‘Companies can use tabletop simulations to define and verify their activation protocols for different phases of response (contingency planning only, full-scale response, other).
- Demonstrate purpose. ‘Companies need to figure out how to support response efforts—such as by providing money, equipment, or expertise. For example, a few companies have shifted production to create medical masks and clothing’.
Read the McKinsey article in full here
Retaildive and Businessinsider contributions:
Another useful and informative article on the outbreak’s implications for business can also be found at retaildive.com, who highlight several areas of concern:
- Supply chain disruptions
- ‘Aggressive shopping’
- Threats to luxury
- Avoiding brick-and-mortar stores
- A boost for e-commerce
Read the RetailDive article here
‘Coronavirus will be like adding jet fuel to an already exploding segment of retail. Amazon and a handful of others will be the beneficiaries of a windfall.’
Other insights and updates on US retailers from Businessinsider.com
Link to Businessinsider insight
Fellow thought leaders and specialist retail productivity experts SWL can help your business operations to navigate this daunting minefield. Contact us now to discuss how you can maximise productivity in these uncertain times.