THE RETAIL WORLD 2020 - ISSUE 05 RETAILING IN A TIME OF CRISIS - A WORLD RETAIL CONGRESS PUBLICATION

Page created by Lauren Berry
 
CONTINUE READING
THE RETAIL WORLD 2020 - ISSUE 05 RETAILING IN A TIME OF CRISIS - A WORLD RETAIL CONGRESS PUBLICATION
THE RETAIL WORLD 2020
 RETAILING IN A TIME OF CRISIS
 ISSUE 05

A WORLD RETAIL CONGRESS PUBLICATION
THE RETAIL WORLD 2020 - ISSUE 05 RETAILING IN A TIME OF CRISIS - A WORLD RETAIL CONGRESS PUBLICATION
CONTENT
         INTRODUCTION
                                                                                                                                             ANALYSIS: E-Grocery: The $200 Billion Opportunity Ahead . . . . . . . . . . . . . . . . . . . . . . . . . .  4

                                          A
                                                                                                                                             OPINION: A wakeup call to the fashion industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
                                                     cross the world,      But what has also become dramatically clear in the time
                                                     retail is gradually   between the last issue of this report and this one is that        ANALYSIS: Developing Local Responses to COVID-19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8
                                                     re-opening for        the world has become galvanised by a powerful movement
                                                     business. As you      to address racism, lack of diversity and opportunity. As
                                                                                                                                             ANALYSIS: INNOVATION SPOTLIGHT: UNITED KINGDOM | Partnering for success. . . . . . . 10
                                         will read from the country        Matt Shay, the President of the National Retail Federation,       ANALYSIS: Serving the Anxious Consumer after COVID-19 . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
                                         reports in Issue Five of          states in this report, Black Lives Matter is an issue of
                                         our ‘Retailing in a Time of       fundamental importance that the US retail industry                INNOVATIONS: Retailers respond to coronavirus through innovation . . . . . . . . . . . . . . . . . . 16
                                         Crisis’ series, retailers are     is taking a proactive stance on to help tackle the long-
                                         working hard to remodel           overdue issues of racism and inequality. His message will
                                         and repurpose their stores        resonate with retail leaders around the world.                  COUNTRIES
                                         to incorporate the required
                                                                           This issue also hears from the President of Lane Crawford         GLOBAL
                                         and necessary safety
                                                                           & Joyce, Andrew Keith. He is leading a global campaign            Spar International: How the West can learn from the East . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
         measures. What we can see right around the world is
                                                                           within the fashion industry to take decisive action against
         that this is what consumers expect as a minimum before
                                                                           the issues around the environmental impact of the sector,         Walgreens Boots Alliance: Going above and beyond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
         they will even enter a store. Where they are confident in
                                                                           its wastefulness and unnecessary discounting that has
         entering a store or a mall, people are spending money as
         we hear in this report from Australia to the Middle East,
                                                                           led to what Andrew describes as ‘a broken model’. All of          ASIA
                                                                           these issues were seen as top of the agenda before, but           China: Livestreaming becomes a new revenue generator . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
         Europe and Latin America. There is pent up demand and
                                                                           he argues that the arrival of the COVID-19 crisis presents
         people will spend with retailers and brands they can trust.                                                                         India: Indian markets open up to a tough reality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28
                                                                           the industry with an unprecedented opportunity to bring in
         Despite this very welcome move towards the re-opening             real change.
         of stores, no-one believes that it is a return to ‘normal’.
                                                                           If these extraordinary times are creating unbelievable            MIDDLE EAST
         This is more like the ‘end of the beginning’ phase in this                                                                          Saudi Arabia: Adjusting to new retail norms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
                                                                           challenges, it is good to see that retail leaders are working
         global crisis which is reshaping everything. A strong theme
                                                                           out how best to respond for the good of their customers,
         from many of the reports in this Issue is the dramatic
         shift to online by consumers around the world. With that
                                                                           their employees but also it seems to the wider societies,         EUROPE
         has come an enormous challenge for retailers to build
                                                                           economies and communities they serve. We hope that                Europe | EuroCommerce: A crisis affecting 29 million retail workers . . . . . . . . . . . . . . . . . . . 32
                                                                           you find the insights, case studies and ideas contained in
         their capabilities and resources to meet this demand that                                                                           Denmark: A feeling of normality for Denmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
                                                                           Issue Five of our reports to be inspiring and provocative.
         for many retailers is 100% higher than 12 months ago.
         But we are also hearing about incredible examples of
                                                                           Thank you to all of our contributors for their on-going           France: A boom in food, beauty and toys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  36
                                                                           contributions to this report.
         leadership and also resourcefulness, innovation and skill                                                                           Germany: Germany’s plan to save more and spend less . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
         shown throughout retail organisations of all sectors and
         geographies as they re-set their business to satisfy the                                                                            Italy: Deep discounts fail to lure the Italian shopper as economic fears grow . . . . . . . . . . .  40
         demands of their newly omnichannel customers.                                                                                       Russia: Russian retail adapts and innovates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  42
                                                                           IAN MCGARRIGLE                                                    Spain | El Corte Inglés: Customers returning with confidence . . . . . . . . . . . . . . . . . . . . . . . .  44
                                                                           CHAIRMAN | WORLD RETAIL CONGRESS                                  Spain | Tendam: The excitement of serving customers again . . . . . . . . . . . . . . . . . . . . . . . . .  46
                                                                           IAN.MCGARRIGLE@WORLDRETAILCONGRESS.COM
                                                                                                                                             United Kingdom: Re-open for business at last . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  48

                                                                                                                                             OCEANIA
                                                                                                                                             Australia: Waking up from isolation to the new reality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  50

                                                                                                                                             LATIN AMERICA
                                                                                                                                             Latin America: Tentative steps for Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
                                                                                                                                             Brazil: Brazil’s digital revolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56

                                                                                                                                             NORTH AMERICA
                                                                                                                                             United States | NRF: Retail’s role in fighting racial injustice . . . . . . . . . . . . . . . . . . . . . . . . . .  58
                                                                                                                                             United States | Coresight: Coronavirus fallout could prompt
                                                                                                                                             sourcing shift away from China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  60

2 | Issue 05                                                                                                                                                                                                                                                                             Issue 05 | 3
THE RETAIL WORLD 2020 - ISSUE 05 RETAILING IN A TIME OF CRISIS - A WORLD RETAIL CONGRESS PUBLICATION
ANALYSIS

                                                                                                                           C
                                                                                                                                    OVID-19 has caused an unprecedented spike in            •    Lasting increases in e-grocery penetration following

                  E-GROCERY: THE $200 BILLION                                                                                       online grocery demand. Almost overnight, the
                                                                                                                                    barriers (real or perceived) that had previously
                                                                                                                                    limited adoption of online grocery were eliminated.
                                                                                                                                                                                                 past crises - MERS in South Korea caused a
                                                                                                                                                                                                 permanent uptake of 4-5% in online penetration, with
                                                                                                                                                                                                 total online penetration reaching roughly 20%. South

                  OPPORTUNITY AHEAD                                                                                        This resulted in a demand spike that has accelerated
                                                                                                                           online grocery penetration by three to four years across
                                                                                                                           all markets and driven a growth in grocery ecommerce
                                                                                                                           penetration of 2-3x pre-crisis levels. To meet this demand,
                                                                                                                                                                                                 Korea continues to be the most advanced e-grocery
                                                                                                                                                                                                 market in the world.
                                                                                                                                                                                            However, we believe some customers will revert to
                                                                                                                           retailers have rapidly overcome technology hurdles and an        pre-pandemic behaviours. As confinement measures
                    Chris Biggs, BCG Managing Director & Senior Partner, and Dan Bodley, BCG                               unclear path to profitability to quickly launch offerings.       wane across countries, we expect a moderate reversal in
                    Managing Director & Partner, offer their perspective about what the future                             The result is an unprecedented evolution in the e-grocery        e-grocery sales due to:
                    may look like for e-grocery and why retailers should act now.                                          market: adaptation of innovative operational models,             •    Reduction in online transactions across all segments
                                                                                                                           new click-and-collect emergency stations, changing over               – Our survey found 91% of consumers plan to reduce
                                                                                                                           of stores into ‘dark stores’, the release of pre-packaged             or maintain online grocery spend when the mandates
                                                                                                                           essentials boxes, and CPG companies and wholesalers                   lift. The slowdown in expected sales is a mix of overall
                                                                                                                           launching direct-to-consumer ecommerce offers.                        spend decrease due to economic hardship, poor online
                                                                                                                                                                                                 experiences, consumer preference, and lack of online
                                                                                                                           Now that stay-at-home mandates are easing in many
                                                                                                                                                                                                 presence of discount store formats. In addition, those
                                                                                                                           markets, grocers are looking to answer two key questions:
                                                                                                                                                                                                 consumers who have temporarily moved all their food
                                                                                                                           How much of the current spike in e-grocery adoption is
                                                                                                                                                                                                 purchases online due to safety reasons are likely to
                                                                                                                           likely to stick, and how much can they afford it to stick?
                                                                                                                                                                                                 eventually return to a mix of on- and off-line shopping.
                                                                                                                           We analysed three potential scenarios for the future of
                                                                                                                                                                                            •    Shift from grocery to restaurant spend – The large
                                                                                                                           e-grocery. This illustrative example focuses on the US market:
                                                                                                                                                                                                 portion of the overall grocery demand spike caused by
                                                                                                                           •    Scenario A: Permanent shift – assumes continuous                 the shift away from restaurant spend will revert over
                                                                                                                                penetration, reaching 3.5x the pre-crisis level, with            time – impacting both stores and the online channel.
                                                                                                                                slower growth but high adoption rate, as 90%+ of
                                                                                                                                current online customers stay online                        This channel shift may well be the single largest growth
                                                                                                                                                                                            opportunity in grocery retail over the next three to five
                                                                                                                           •    Scenario B: Modest demand reversal – assumes
                                                                                                                                                                                            years. Even if only half of new COVID-19 e-grocery demand
                                                                                                                                penetration reverts to 2x pre-COVID-19 levels, as 50%
                                                                                                                                                                                            converts permanently, we will witness an unprecedented
                                                                                                                                of converted consumers do not remain loyal to the
                                                                                                                                                                                            acceleration in the online grocery market, with $200bn
                                                                                                                                online grocery channel
                                                                                                                                                                                            globally moving to the channel by 2021.
                                                                                                                           •    Scenario C: Limited adoption – assumes penetration
                                                                                                                                reverts to near pre-COVID-19 levels, retaining only         But, that growth can come at a cost. Most grocers
                                                                                                                                25% of pandemic-induced consumer demand                     struggled to earn profits and a return on capital on their
                                                                                                                                                                                            ecommerce business before COVID-19, and the additional
         RANGE OF POSSIBLE SCENARIOS GOING FORWARD                                                                         While each market will differ based on customer
                                                                                                                           preferences, competition, and demographics, in most
                                                                                                                                                                                            volume has not solved underlying business model issues.
                                                                                                                                                                                            Retailers must actively seek new strategies to attain
                                                                                                                           markets we anticipate demand will fall somewhere                 sustainable profitability of e-grocery and not dilute
                                                                Flatten              Fight   Future                        between the permanent shift to online and a modest               margins. There is not a one-size-fits-all model. We expect
                                                                                                                           reversal scenario.                                               several ecosystems will co-exist, with new innovative
                                                                                                                           We believe COVID-19 has caused a permanent increase              solutions continuously challenging the status quo. Grocers
      E-Grocery sales penetration                                                                                                                                                           must choose an operating model tailored to the value
      (indexed to Feb '20 = 1.0x)                                                                                          in e-grocery adoption, and much of the demand surge
                                                                                                         Scenario A:       observed in the past three months will remain online. Our        proposition best-suited to their customer base, and then
                                                                                                         Permanent shift   view is informed by:                                             invest in the right technology to execute that model. They
                                                                                                                                                                                            must also evaluate the trade-offs between the ease of
                                                                                                                           •    Ordering groceries online as habit forming –                implementation, long-term scalability, and profitability.
                                                                                                                                Experience shows that after customers complete five
                                                                                                                                online orders, they become channel-loyal. Over one in       It is critical that grocers also take the time to re-imagine
                                                                                                                                three digital purchases in fresh and packaged foods         the role of stores given this online shift and adjust them to
                                                                                                         Scenario B:            was from first time users. A survey administered            rising e-grocery penetration. The challenge is significant,
                                                                                                         Modest reversal        by BCG in May 2020 of 17,000+ consumers globally            particularly as e-grocery still has unique operational
                                                                                                                                revealed 25% of consumers consider online shopping          challenges due to the temperature control requirements
                                                                                                         Scenario C:
                                                                                                         Limited new            a new habit developed during the pandemic.                  for perishable products, weight-to-value ratio, and need for
                                                                                                         adoption          •    Post-lockdown growth – Early results in the US              in-person hand-off of products in many cases.
                                                                                                                                market indicate that as the panic stockpiling period        With new e-grocery players entering the market and current
                                                                                                                                passed, total transactions in bricks-and-mortar             leaders quickly scaling their capabilities, now is the time
                                                                                                                                stores decreased. However, the number of e-grocery          to act. Players who act now – understand their customer
                              Historical actuals
                                                                                                                                transactions continued to rise.                             and market needs, find the right business model to reach
Sept 2019                                                                 May 2020               2021+                                                                                      profitability, build the right technology – will capture a
                                                                                                                                                                                            disproportionate share of this $200bn opportunity.
Source: U.S. Census Bureau, Forrester, Brick Meets Clicks, BCG Analysis

                                                                                                                                                                                                                                                     Issue 05 | 5
THE RETAIL WORLD 2020 - ISSUE 05 RETAILING IN A TIME OF CRISIS - A WORLD RETAIL CONGRESS PUBLICATION
OPINION
                                                                                                                                                         In an industry renowned to be competitive at best, the          Lane Crawford, we are verbally communicating this with
                                                                                                                                                         high level of sharing and openness across both forums,          our customers in-store. We have marked merchandise that

               A WAKEUP CALL
                                                                                                                                                         has been remarkable. Following the announcement of              will not be discounted in store with a dot system, so our
                                                                                                                                                         both forums proposals in May within days of each other,         style advisors can walk their customers through buying
                                                                                                                                                         industry players from across the Globe have signed on           better. From AW20, we will only stage an end of season
                                                                                                                                                         in support. Not surprisingly, the single most uniting           sale on seasonal product from AW20.
                                                                                                                                                         element in both forums for retailers is the prevalence of

               TO THE FASHION
                                                                                                                                                                                                                         We are working on sourcing in more conscious ways: we
                                                                                                                                                         discount. Investing a huge amount of money and resource
                                                                                                                                                                                                                         will be working with more brands in Greater China; we are
                                                                                                                                                         in travelling the world and selecting and merchandising, is
                                                                                                                                                                                                                         looking at how we can repurpose existing merchandise
                                                                                                                                                         no longer viable because of the amount of product sold at
                                                                                                                                                                                                                         with brands; and for the small amount of product we
                                                                                                                                                         discount. The model is broken.
                                                                                                                                                                                                                         produce ourselves, we are working with manufacturing

               INDUSTRY
                                                                                                                                                         Both forums have a slightly different approach. Dries’          partners with responsible supply chains.
                                                                                                                                                         Forum has focused on highlighting the urgent and critical
                                                                                                                                                                                                                         Our buying teams’ travel will be significantly reduced as
                                                                                                                                                         need to simplify our businesses, making them more
                                                                                                                                                                                                                         we work with partners remotely and digitally with online
                                                                                                                                                         environmentally and socially sustainable, and aligned more
                                                                                                                                                                                                                         showrooms and more Zoom calls, with the potential to
                                                                                                                                                         closely to customers’ needs. We’ve proposed to put the
                                                                                                                                                                                                                         also include customers. It is clearly important that buyers
                                                                                                                                                         Autumn/Winter season back in winter (August/January)
                                       Andrew Keith,                                                                                                                                                                     still have the ability to see and touch product so travel
                                                                                                                                                         and Spring/Summer season back in summer (February/
                                                                                                                                                                                                                         won’t be entirely eliminated but this will also be of huge
                                       President                                                                                                         July); to create a more balanced flow of deliveries through
                                                                                                                                                                                                                         benefit to buyers around the world whose lives were
                                       Lane Crawford & Joyce                                                                                             the season to provide newness but also time for products
                                                                                                                                                                                                                         miserable because they were always travelling and for
                                                                                                                                                         to create desire; and discount at the end of the season
                                                                                                                                                                                                                         many weeks at a time - there’s nothing glamorous about
                                                                                                                                                         in order to allow for more full-price selling – January for
                                                                                                                                                                                                                         it. Our buyers are young, and they are very enthusiastic
                                                                                                                                                         Autumn/Winter and July for Spring/Summer. We also
                                                                                                                                                                                                                         about the discussions we are having on defining a more
                                                                                                            Wirestock Images / Shutterstock.com          agreed to work to increase sustainability through the
                                                                                                                                                                                                                         sustainable approach to what we do.
                                                                                                                                                         supply chain and sales calendar through less unnecessary
                                                                                                                                                         product; less waste in fabrics and inventory; less travel;      Longer term, we are working on how we reduce single-use
                                                                                                                                                         make use of digital showrooms in addition to personal           plastic in our business; reducing our carbon footprint; and
         COVID-19 has accelerated the transformation of retail but it is also putting a powerful                                                         creative interactions; and review and adapt fashion shows.      recycling waste as part of our efforts to be a responsible
         spotlight on some major industry issues that need to be addressed. The oversupply, the                                                                                                                          business. We have already taken steps to reduce our
                                                                                                                                                         The Forum will not police the industry or actions and
         waste, the discounting and the environmental impact of the fashion industry is one of                                                           because of anti-trust laws, we cannot set down or agree to
                                                                                                                                                                                                                         carbon footprint by shifting from air to sea freight and
                                                                                                                                                                                                                         on-ground to electric and bio diesel. With the objective
         those enormous issues. Andrew Keith, President of Lane Crawford & Joyce, is leading a                                                           a global approach to discounting. Those who are aligned and
                                                                                                                                                                                                                         to recycle our own waste, starting in our warehouse with
         global campaign driven by a belief that now is the time to fix the broken fashion industry                                                      who have signed on will take action in their own businesses.
                                                                                                                                                                                                                         plastic hangers, polyfoams, Styrofoam, plastic film,
                                                                                                                                                         We all know each other and are in contact so there will be an
         model. Writing exclusively for the World Retail Congress, he sets out the case for change.                                                      organic sharing of the progress we’re each making.
                                                                                                                                                                                                                         bubble wrap, cardboard and plastic, we have established a
                                                                                                                                                                                                                         recycling platform with third party logistics and specialist
         For too long, retailers across the fashion industry have         Since then we have seen the rise of ecommerce platforms,                       #rewiringfashion is addressing not only discounting but         recycling partners, that other businesses are now
         been buying too much, buying product they had no way of          driving growth strategies on breadth and depth of product,                     also fashion weeks and show schedules, and looking at           leveraging. And we are now piloting a new service for Lane
         selling, and confusing the customer by selling product that      and discounting continuously through the season before                         ways in which the supply chain of the industry can be more      Crawford members to take back used beauty plastic and
         had nothing to do with their seasonal needs at that time.        going to an early, deep seasonal sale because they have so                     sustainable. Discussions continue with subgroups focused        glass packaging, our own packaging and used electronics
         As a consequence, customers have been falling out of love        much stock to clear. Most are not profitable.                                  on those areas. At this stage there isn’t an alignment          for recycling, using our online returns collection logistics,
         with what we do and retail is in crisis.                                                                                                        among designers on the fashion week and show schedule           and encouraging customers to drop off at our stores.
                                                                          Price and discounting are not a luxury strategy. If
         In late March, when a global ecommerce platform started          customers don’t value what we sell because we don’t value                      – each business is unique and every designer wants to
                                                                                                                                                                                                                         Certainly, we are looking at a very different retail landscape
         discounting new spring summer season stock as the                what we sell, we have killed desire. And if we’re producing                    look at how they show and sell most effectively. However,
                                                                                                                                                                                                                         whether these two forums drive it or not.
         pandemic took hold globally, I could see the floodgates          too much for longtail platforms and people who are not                         there is an alignment between the young, independent
         about to open on markdowns – and a forewarning from              prepared to pay for it, we’ll kill the planet. Forget our                      designers – they will show in March and September and           The new world and our customers will keep us on track.
         our last global crisis. Yes, we were all suffering - I run two   businesses. Game over.                                                         sell in June and July.                                          The levels of disruption we are facing all around the globe
         luxury multi-brand retail businesses, Lane Crawford and                                                                                                                                                         mean that businesses must be quick and responsive,
                                                                          Rather than taking the pandemic as the death knell, it is our                  From the second half of 2020 we will see travel to buy
         Joyce, with operations in mainland China and headquarters                                                                                                                                                       defining new ways of producing and how they flow their
                                                                          wakeup call, a time to reset and redefine a new way forward.                   scaled right back; less money spent on extravagant fashion
         in Hong Kong, which has had no respite since social unrest                                                                                                                                                      merchandise. Brands will work with retailers who will be
                                                                                                                                                         shows; product delivered at the appropriate time in the
         broke out in June 2019. But for the short-term gain, the         Spurred on by that sale flashpoint in March, I found                                                                                           responsible with their products. Customers will purchase
                                                                                                                                                         season; less discount; and designers really thinking about
         industry would likely suffer irreversible damage.                through discussions with like-minded brand partners                                                                                            with more conscience and be conscious of how they spend
                                                                                                                                                         how to connect with their customers in new ways.
                                                                          and retailers, that we were of the same view. Led by                                                                                           as levels of disposable income are affected.
         In 2008 during the Global Financial Crisis, one of the                                                                                          At Lane Crawford and Joyce, a significant portion of the
                                                                          fashion designer Dries Van Noten, I participated in a series                                                                                   Clearly there is no business as usual. Now is the time
         world’s most revered department stores went on discount                                                                                         Spring Summer 20 merchandise will not be marked down
                                                                          of discussions with key industry players to determine                                                                                          to future proof our businesses. Now is the time to stop
         in the US and every other retailer was forced to follow. The                                                                                    because they are timeless, wardrobe essentials. Though
                                                                          a proposal for the future, while also participating in                                                                                         producing and buying so much needless product and
         American retail market has seemingly never recovered,                                                                                           it may sound counter-intuitive, we are encouraging
                                                                          #rewiringfashion, facilitated by the Business of Fashion,                                                                                      stuffing it in landfill.
         unable to sustain healthy, full-price businesses because                                                                                        customers to buy better and buy less, and to think about
                                                                          which set forth its manifesto.
         customers have been conditioned to expect discounted                                                                                            how they use what they purchase. Luxury should last. In
         merchandise all season round, no longer just at the highly
         anticipated end-of-season sale.
                                                                                                                                                  If you wish to be part of this movement for change please sign the open Forum letter at forumletter.org and join #rewiring fashion
                                                                                                                                                  at www.rewiringfashion.org. Or start your own forums within your sector – it has been a very powerful process coming together
                                                                                                                                                  and if the luxury fashion industry can down its daggers, anyone can.

6 | Issue 05                                                                                                                                                                                                                                                                      Issue 05 |   7
THE RETAIL WORLD 2020 - ISSUE 05 RETAILING IN A TIME OF CRISIS - A WORLD RETAIL CONGRESS PUBLICATION
ANALYSIS
                                                                                          The next wave of COVID-19 restrictions are likely to play                                                                    footfall management, returns procedures and cleaning
                                                                                          out locally rather than nationally.                                                                                          intensity requirements could all be nuanced, and labour
                                                                                                                                                                                                                       flexed accordingly.
                                                                                          It is becoming clearer that demand will not return to retail

           DEVELOPING
                                                                                          stores and brands in the same profile as pre-crisis, and                                                                     Larger retailers are feeling increasingly empowered to
                                                                                          that it will also not return at the same pace everywhere.                                                                    lobby local governments on re-opening strategies and on
                                                                                          Consumers will continue to be reticent to travel to and                                                                      industry standards and protocols for operation; where
                                                                                          shop in locations that they deem to be riskier, and                                                                          retailers are able to point to robust analysis on the level
                                                                                          restrictions on travel (both international and local) will                                                                   of risk at their site, there may be scope to dial down

           LOCAL RESPONSES
                                                                                          continue to hamper accessibility to certain location types.                                                                  restrictions and requirements to maximise sales and
                                                                                                                                                                                                                       profitability where risk is inherently low.
                                                                                          Furthermore, infection rates have and will continue
                                                                                          to vary substantially across individual areas – as of 18                                                                     Local risk information can be used to drive customer
                                                                                          May, normalised infections (per 100k residents) in some                                                                      demand, informing outbound marketing strategy and

           TO COVID-19
                                                                                          parts of London were twice that in Bristol - and the R                                                                       messages, directing customers across channels and
                                                                                          rate is strongly influenced by local mobility patterns.                                                                      locations appropriately and providing reassurance on the
                                                                                          There is increasing pressure on centralised governments                                                                      real level of risk at sites.
                                                                                          to empower local authorities and organisations to
                                                                                                                                                                                                                       And clear indicators combined with effective
                                                                                          manage risk at the local level, in an effort to increase the
                                                                                                                                                                                                                       communication can provide instant reassurance to
                                                                                          effectiveness and efficiency of outbreak management.
             By Tom Charlick        By Katherine Fiander                                                                                                                                                               colleagues that retailers are actively monitoring and care
                                                                                          We are already starting to see some retailers planning                                                                       about the level of risk to their health and that when the
                                                                                          differential openings and operating hours across their                                                                       doors are open, it is safe to be there.
                                                                                          estate as a result.
                                                                                                                                                                                                                       In the medium-term, better local understanding of traffic
                                                                                          But we believe that the retailers who will manage this                                                                       flow and risk will enable retailers to make more informed
                                                                                          period most effectively will be the ones that go further,                                                                    decisions around what the store portfolio of the future
                                                                                          step-changing the extent to which they monitor and                                                                           should look like – more residential and less commuter sites
                                                                                          analyse traffic and risk at a local level.                                                                                   for example.
                                                                                          Retailers are starting to work through the opportunities                                                                     As the challenges of the COVID-19 pandemic on the retail
             One of the effects of the COVID-19 crisis has been a focus on ‘the local’.   that can be unlocked through local monitoring and decision                                                                   sector continue to shift and evolve, we are moving into
                                                                                          making. The potential applications and benefits of this                                                                      a local phase – and retailers who adopt a data driven
             Consumers in lockdown have rediscovered their local services and retailers   approach are numerous:                                                                                                       approach will be one step ahead.
             too are having to think more locally. OC&C Strategy Consultants’ Katherine
                                                                                          Data on expected store-level demand levels and
             Fiander, Associate Partner, and Tom Charlick, Partner look at what this      local risk can inform decisions around future opening
             means for retailers.                                                         patterns and operational requirements; opening times,

                                                                                                    TRACKING RISK AT A LOCAL LEVEL ALLOWS RETAILERS TO MAKE MUCH
                                                                                                    SMARTER DECISIONS ABOUT STORE OPENING AND OPERATIONS
                                                                                                     Daily R-Rate1 vs. 7-Day Incidence2 Average Across LTLAs                                                                                            Examples: Sunderland and Enfield

                                                                                                                                                                                                                  2.
                                                                                                                                                                                                                          In 6th 20th April Sunderland was
                                                                                                                                                                                                                         moving through the high risk area

                                                                                                                                                                            90
                                                                                                     Enfield - would be                                                                Medium Risk                                                           High Risk         Enfield
                                                                                                     closed for 1 week                                                      80                                                                                                 Sunderland
                                                                                                     (using the Risk matrix
                                                                                                     with R>1 and incidence
                                                                                                                                                                            70
                                                                                                     >50/100k)

                                                                                                                                                                            60
                                                                                                     Sunderland - would be
                                                                                                     closed for 3-4 weeks

                                                                                                                                             New Cases per 100k Residents
                                                                                                                                                                            50

                                                                                                                                                   Over Last 7 Days
                                                                                                                                                                            40
                                                                                                                                                                                   Low Risk
                                                                                                                                                                            30

                                                                                                                                                                            20

                                                                                                                                                                            10

                                                                                                                                                                             0
                                                                                                    3.                                                                           0.0      0.2   0.4   0.6   0.8        1.0    1.2     1.4     1.6    1.8      2.0        2.2
                                                                                                         Both locations are very similar at
                                                                                                                                                                                                                                               1.
                                                                                                          the moment Low Risk segment                                                                                   R-Rate 2                     Both locations started from
                                                                                                                                                                                                                                                    approximately the same place

                                                                                              1. Displayed R-Rate is a simplified approximation using confirmed cases as displayed, not controlling for risk of infection by social exposure or relative share of immune people
                                                                                              2. Incidence refers to new cases per 100k residents over last 7 days
Photo by CJ Infantino on Unsplash                                                             Source: OC&C analysis

                                                                                                                                                                                                                                                                                            Issue 05 | 9
THE RETAIL WORLD 2020 - ISSUE 05 RETAILING IN A TIME OF CRISIS - A WORLD RETAIL CONGRESS PUBLICATION
ANALYSIS

                                                           In their latest special report highlighting how retailers are developing innovative solutions
                                                           in response to this global crisis, AlixPartners focus on some outstanding examples of best
          INNOVATION SPOTLIGHT: UNITED KINGDOM             practice in the UK.

          PARTNERING FOR
                                                           NEW PARTNERSHIPS AND PROTECTIONS
                                                           There was a tremendous drive in innovative partnerships
                                                           of the kind that would not be expected in the normal
                                                           course of evolution, but became the answer when retailers
                                                           had to move fast and react to the requirements of the

          SUCCESS                                          extraordinary situation. Various retailers, including Marks
                                                           and Spencer, Aldi, Co-op, and Morrisons partnered with
                                                           food delivery company Deliveroo to offer quicker last-mile
                                                           shipping to customers. Similar innovative collaborations
                                                           and partnerships as well as new business models are
           Matt Clark                 Dan Coen             likely to continue to emerge as recovery continues. There
                                                           were also efforts to support gig economy workers at the
           Managing Director,         Managing Director,
                                                           frontlines making ecommerce home delivery possible.
           AlixPartners               AlixPartners         Hermes was one major example, with the luxury retailer
                                                           setting up a £1m support fund to assist its couriers in
                                                           cases where they had to self-isolate.

                                                           TECHNOLOGY ADOPTION ACCELERATES                               UNPRECEDENTED TIMES, UNPRECEDENTED ACTION
                                                           Cashless transactions were the call of the hour.              Several rival grocery retailers and supermarkets came
                                                           Sainsbury’s SmartShop app had existed prior to COVID-19,      together to ride out the increased demand for certain
                                                           but adoption accelerated much more rapidly than the           products and manage supply chain concerns. In a
                                                           retailer could have predicted as it aggressively marketed     remarkable move, Morrisons, Sainsbury’s, Costcutter,
                                                           the contactless shopping service during the crisis. Using     Co-op, Tesco, Lidl, Aldi, Waitrose, Marks and Spencer,
                                                           the app, customers were able to scan their shopping as        Iceland, Asda, and Ocado, jointly published an open letter
                                                           they walked around the supermarket, pack their purchased      that detailed steps they were all taking to maintain both
                                                           products up on their own, and walk straight out of the        consumer safety and flow of goods. The letter also asked
                                                           store without them or their shopping coming in close          customers to refrain from stockpiling popular items such
                                                           contact with anyone. Safe for the customer, easy for the      as toilet paper and canned tomatoes. While the move was
                                                           retailer. Ocado, meanwhile, set up virtual queues to help     coordinated by the British Retail Consortium, it wasn’t
                                                           keep its website up and functioning during the surge of       something anyone could have predicted prior to the crisis.
                                                           online orders. Expect the pace of technology adoption
                                                           in various areas of operations to rise as the industry
                                                           continues to emerge from the crisis.

Photo by Liviu Florescu on Unsplash

                                                                                                                                                                               Issue 05 | 11
THE RETAIL WORLD 2020 - ISSUE 05 RETAILING IN A TIME OF CRISIS - A WORLD RETAIL CONGRESS PUBLICATION
ANALYSIS

        SERVING THE ANXIOUS                           EY’s Future Consumer Index now surveys consumers in China. As the first country to
                                                      be hit by the COVID-19 crisis and the first to emerge from it, what lessons are there

        CONSUMER AFTER
                                                      from the behaviours of China’s consumers? Thomas Harms, EY’s Global Retail Leader,
                                                      highlights the key findings from their research.

        COVID-19                                      W
                                                                        ith the coronavirus pandemic continuing to play out around the world, retailers are trying to anticipate what
                                                                        will come next. How will the attitudes and behaviours that consumers have adopted in lockdown change, as
                                                                        their freedom is slowly restored?
                                                                     To understand the new consumers COVID-19 is shaping, EY has widened the scope of the EY Future
                                                      Consumer Index to include consumers in China. By looking closely at China’s emergence from lockdown, we can get a
          By Thomas Harms, EY Global Retail Leader    perspective on how the pervasive sense of caution might persist or evolve in other countries, as they remove or ease their
                                                      restrictions.
                                                      OUT OF LOCKDOWN, BUT NOT OUT OF THE WOODS
                                                      The EY Future Consumer Index suggests that as Chinese consumers are able to return to ‘normal life’, many remain deeply
                                                      concerned about picking up where they left off. If we see this trend repeat in a significant way across other markets,
                                                      organisations around the world will have to adapt to serve a far more worried and cautious consumer. When people make
                                                      decisions about what they buy and how they spend their time, risk will be front of mind.
                                                      CONSUMERS ARE CAUTIOUS, BUT THEY’RE READY TO SPEND
                                                      Overall, Chinese consumers are now spending more in a wider range of categories. But some categories are rebounding
                                                      much faster than others.

                                                            CONSUMERS IN CHINA ARE SPENDING SIGNIFICANTLY MORE IN CERTAIN
                                                            CATEGORIES THAN THOSE IN OTHER COUNTRIES
                                                                % of consumers “spending more” next month                                                       China   Rest of the world

                                                                                        0%                       20%                             40%                              60%
                                                                          Fresh food

                                                      Household and hygiene products

                                                                  Personal care items

                                                                         Frozen food

                                                               Canned and dried food

                                                               Clothing and footwear

                                                                Beauty and cosmetics

                                                             Non-alcoholic beverages

                                                                 Alcoholic beverages

                                                     Methodology
                                                     We surveyed 12,843 consumers across the US, Canada, Brazil, UK, France, Germany, India, UAE, Saudi Arabia, China, Japan, Australia and New
                                                     Zealand during the week of 4 May 2020. The survey questionnaire covered current behaviours, sentiment and intent.

Kapa1966 / Shutterstock.com

                                                                                                                                                                                            Issue 05 | 13
THE RETAIL WORLD 2020 - ISSUE 05 RETAILING IN A TIME OF CRISIS - A WORLD RETAIL CONGRESS PUBLICATION
We see the same encouraging signs when we look further into the future. China’s consumers are far more likely to be in the
           segments we call ‘Back with a bang’ and ‘Cautiously extravagant.’ And it’s interesting to note how few are in the ‘Return to                                       LESS EXTREME SENTIMENT IN CHINA SUGGESTS THAT CONSUMERS
           normal’ segment.                                                                                                                                                   MAY RECOVER OVER TIME
                                                                                                                                                                              Extremely uncomfortable     uncomfortable
                  CONSUMERS MAY BEGIN EASING CUT BACKS AND SPENDING                                                                                                                                                              N. America & W. Europe                                     China
                  MORE AFTER COVID-19 IF CHINA IS A LEADING INDICATOR                                                                                                       Going to a theatre/cinema                         58%                            20%              29%                         35%
                                                                                                                                                                            Exercising in a public gym                        55%                           21%         14%           28%
                                                                                                                                        China   Rest of the world
                                                                                                                                                                                 Going to a bar or pub                    53%                              22%            25%                       36%
                                                                                                                                                                         Travelling on public transport                    53%                             20%      11%               27%
                 Back with a bang                          Cautiously extravagant                       Get to normal   Stay frugal                   Keep cutting
                                                                                                                                                                                 Eating in a restaurant                 48%                           22%               14%            28%
                                  28%                                                 37%               7%                            25%                3%                Trying on clothes in a store              47%                             21%           6%           25%

                      15%                                               21%                                     22%                   27%                   15%                         Going to a mall           37%                          28%                 5%     16%
                                                                                                                                                                          Going to a hairdresser or spa          37%                          24%                   13%               27%
           This is further evidence that Chinese consumers feel positive and are looking to a bright future. But the Index suggests                                        Shopping in a grocery store         15%              23%                                     15%
           they are changing their preferences and behaviours fast, and very few plan to go back to life as they used to live it.

                  LIVING MORE RISK-AWARE LIVES                                                                                                                       IMPERATIVE TWO: ACCELERATE DIGITAL
                                                                                                                                                                     In the heavy lockdown stage retailers showed they could be very agile, creating simple but effective ways to minimise
                  52% said they will change the way they shop                                                                                                        in-store physical touch and proximity, for example. But as we move into the next phase of the crisis, digital will be critical.
                                                                                                                                                                     Companies need to quickly redefine their digital strategies and hit the accelerator. ‘How can we e- everything?’ is the
                  OF THOSE                                                                                                                                           question asked by one of our clients.
                   70% said they will be more aware of hygiene and sanitation when they go shopping
                                                                                                                                                                     What could this lead to? We expect to see greater use of the smartphone as an interface generally. New shopping
                   60% will consolidate their shopping trips into less frequent, but larger purchases
                                                                                                                                                                     experiences will become possible as personal technologies become more integral to everyday life, people become more
                   44% will do more of their grocery shopping online.                                                                                                comfortable sharing personal data, and other barriers to adoption fall away. Ideas from the margins could enter the
                                                                                                                                                                     mainstream. Consumers may be more willing to share their biometric data to get clothes that fit perfectly without having
                                                                                                                                                                     to try them on. Haptic technology could allow people to ‘feel’ products without physical contact.
           THE ANXIOUS CONSUMER HAS RISK FRONT OF MIND
           One critical question is whether the new behaviours and sentiments described by our segments will stick. We think that                                    THREE OPPORTUNITIES TO ADAPT TO A NEW KIND OF CONSUMER
           more consumers, faced with no clear answers about vaccines, will adopt an ‘always-on-emergency mindset’. This is a                                        •  Can you create a map of the journey your customer takes, from acquisition to loyalty, and work out how to replace any
           worldview characterised by a heightened sensitivity to risk, both real and perceived. A new normal emerges as people                                         physical touchpoints that are no longer possible with digital ones?
           become accustomed to crisis and are more cautious and pragmatic.                                                                                          •    Can you encourage anxious consumers back into a shared physical location like a clothing store by rethinking how that
           The post-lockdown risk attitudes of consumers in China are an insight into how consumer attitudes elsewhere might                                              location works and using digital technology to help consumers re-embrace the physical?
           change, and what it would take for retailers to remain relevant. There are two standout imperatives we want to share here:                                •    Can you give anxious consumers greater transparency across your supply chain and delivery process, so they know you
           IMPERATIVE ONE: MAKE THE CONSUMER FEEL SAFE                                                                                                                    take their concerns seriously and can feel comfortable about buying from you?
           Consumers in China are today less worried about returning to certain activities than consumers elsewhere after all they                                   Retailers must adapt to a new kind of consumer – one with priorities, attitudes and behaviours shaped by the experience
           have the longest experience of living with coronavirus and they came out of lockdown first.                                                               of living through a global humanitarian crisis. This will require digital change at an extraordinary pace. Can leaders
           Yet in absolute terms they remain extremely cautious about returning to many of the activities that were once part of their                               implement five years of digital progress in six months?
           normal, every-day lives. This suggests the pandemic has affected consumer attitudes at a deep level.                                                      The bottom line is that retailers have shaped their business strategies, product portfolios, and marketing or engagement
           Will time alone change these attitudes? One encouraging sign is that Chinese consumers are much less concerned about                                      around a consumer that values purpose and innovation. But that is not what the Anxious Consumer values. Their buying
           shopping in a grocery store. Like consumers everywhere, they’ve needed to visit such stores to buy food. That means                                       decision isn’t a trade-off between value and cost, or value and some felt expression of their identity - it’s more about “Is
           they’ve seen for themselves how stores have changed the shopping experience to make them safe and – critically – to                                       what I’m buying or experiencing worth the risks I’m taking?” This is a new challenge. But it’s one that retailers that act
           make them feel safe.                                                                                                                                      now can turn into an opportunity.

           There is a learning here for businesses that need to entice consumers back into a communal space: how will you reinvent
           and communicate the experience you offer so consumers feel the risk has been minimised?                                                                                   For more insights and to read the article in full, visit www.EY.com/FutureConsumerIndex

                                                                                                                                                                     The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY
                                                                                                                                                                     organization or its member firms.

14 | Issue 05                                                                                                                                                                                                                                                                                                   Issue 05 | 15
THE RETAIL WORLD 2020 - ISSUE 05 RETAILING IN A TIME OF CRISIS - A WORLD RETAIL CONGRESS PUBLICATION
INNOVATIONS                                                                                                                                Squadded

             RETAILERS RESPOND
             TO CORONAVIRUS                                                                                                                     SOCIAL COMMERCE PLATFORM TURNS SHOPPING
                                                                                                                                                REMOTELY INTO A GROUP ACTIVITY

             THROUGH INNOVATION                                                                                                                A browser extension called Squadded Shopping Party
                                                                                                                                               allows users to connect with groups of friends and shop
                                                                                                                                                                                                              Takeaway: Even before COVID-19 there was huge growth in
                                                                                                                                                                                                              social ecommerce, predominantly led by Chinese apps like
              Justin Sablich, Editor,                                                                                                          online together, chatting through the extension as they        Panduoduo. This platform allows people to form groups
              Springwise                                                                                                                       virtually try on different outfits or discuss items. Once      and shop at a discount.
                                                                                                                                               installed, users can go to participating sites and browse.     Similar social ecommerce apps are expected to sell more
                                                                                                                                               The platform allows users to add items to a wishlist, poll     than €39bn (£35.5bn) worth of goods in China alone in
                                                                                                                                               friends for advice and see what other users are buying.        2022. For brands, Squadded offers the opportunity for
                                                                                                                                               Founded by former L’Oréal brand manager Elysa Kahn,            higher conversion rates from the peer-to-peer connection.
                                                                                                                                               Squadded aims to inject a sense of togetherness, trust and     According to research firm Nielsen, consumers tend to buy
                                                                                                                                               transparency into remote shopping.                             more when they shop with friends, because having the
                                                                                                                                                                                                              decision affirmed by a friend reduces the perception that a
                                                                                                                                                                                                              purchase is frivolous.
                                                                                                                                                                                                              Find out more

Photo by Ramon Kagie on Unsplash                                                                                                               Krisztina Papp on Unsplash

            M
                         any of the retail innovations we’ve spotted via        Others are making customer service a priority, developing
                         the Springwise community in recent weeks               new tools to keep consumers better informed about when to
                         have a particular focus on making the shopping         shop, and where. Supermarket chain Lidl recently launched a
                         experience less stressful, and in some cases,          WhatsApp chatbot in Ireland, where shoppers can converse
             more social, for consumers still adjusting to a life affected by   and be notified of when their local stores are less crowded.
             COVID-19.
                                                                                We also spotted the LineScouts app, which takes a
             While ecommerce activity continues to spike, a downside for        crowdsourced and data-driven approach to keep shoppers
             some is that it lacks the comradery that shopping with others      informed on the safest times to visit various local
             provides. This is something one Israeli start-up is aiming to      supermarkets.
             replicate digitally.                                                                                                               NEW ZEALAND’S FIRST VIRTUAL MALL
                                                                                As always, Springwise will be tracking which innovative
             Squadded allows users to connect with groups of friends            approaches gain traction with consumers, undoubtedly seeing
             and go shopping together online, chatting through a browser        many more bold experiments from all corners of the world       In the midst of the COVID-19 pandemic, the town of             Takeaway: Even as lockdowns around the world begin to
             extension as they virtually try on different outfits or discuss    emerging over the coming weeks and months.                     Whakatāne, on New Zealand’s North Island, created              ease, many people are continuing to stay away from retail
             what to buy.                                                                                                                      a virtual mall featuring local and regional businesses.        outlets and other communal services. This may well have dire
                                                                                                                                               Customers can choose to shop online by store or product        consequences for small, local businesses that are trying to
                                                                                                                                               type, and can purchase from several retailers using only one   rebuild. The virtual mall offers these businesses an option,
                                                                                                                                               shopping cart.                                                 as well as helping shoppers to support their community by
                                                                                                                                                                                                              making it easier, safer and more fun to shop locally.
                                                                                                                                               The virtual mall allows retailers and service providers
                                                                                                                                                                                                              According to the developers, within an hour of its launch
                                                                                                                                               without an online shopping option to develop one. The
                                                                                                                                                                                                              the site recorded more than 300 visits and the first sale
                                                                                                                                               platform also links shops that already have ecommerce
                                                                                                                                                                                                              was completed within two hours. When the threat from
                                                                                                                                               websites to the virtual mall, while retaining a unique
                                                                                                                                                                                                              coronavirus recedes, virtual malls like this may well
                                                                                                                                               domain name and style.
                                                                                                                                                                                                              continue to provide a new way to shop locally.
                                                                                                                                                                                                              Find out more

                                                                                                                                                                                                                                                                       Issue 05 | 17
THE RETAIL WORLD 2020 - ISSUE 05 RETAILING IN A TIME OF CRISIS - A WORLD RETAIL CONGRESS PUBLICATION
Linescouts
      K. Mitch Hodge on Unsplash

                                                                                                                                       THE APP THAT HELPS SHOPPERS AVOID
                                                                                                                                       OVERCROWDED SUPERMARKETS
         WHATSAPP CHATBOT HELPS CUSTOMERS FIND THE
         PERFECT TIME TO SHOP                                                                                                          Slovenian start-up LineScouts has developed an app that           Takeaway: LineScouts is the type of innovation that we are
                                                                                                                                       notifies users of the congestion they can expect at their         likely to see more iterations of as the pandemic enters the
                                                                                                                                       local store. LineScouts produces an aggregate ‘busyness           next phase in many regions of the world. The speed at which
        In an attempt to provide a solution for long queues, grocer      Takeaway: With grocery demands at an all-time high and        score’ based on data from Google and crowd-sourced                these tools can be released will be interesting to track.
        Lidl has launched a WhatsApp chatbot in Ireland in which         the need to maintain social distancing during COVID-19,       reports. The queues are then given a traffic light rating –       LineScouts was developed at d.labs, a lean innovation
        customers can converse and find the quietest times at their      an everyday trip to the supermarket has become                red for very busy, yellow for busy, green for light traffic and   studio based in London and Ljubljana, Slovenia. D.labs
        local stores. Customers can send the chatbot a message           increasingly difficult.                                       purple if there is no data. Users can also help by reporting      specialises in incubating digital products to the point
        on WhatsApp stating the time and day they intend to              Utilising a chatbot that is easily accessible via WhatsApp    on the conditions at their local store.                           where they are ready to scale up market-tested products
        visit a particular store. Using real-time data and customer      should lessen the stress for customers while keeping                                                                            and services. Unlike previous products put out by the lab
        transaction numbers, the chatbot will respond with an            them safer in-store. Post-pandemic one can also see the                                                                         however, LineScouts was rushed to market in order to help
        automated message.                                               appeal of such a tool from a customer service perspective.                                                                      consumers as soon as possible.
                                                                         Can’t find the toothpaste? Just ask on WhatsApp.                                                                                Find out more
                                                                         Find out more

                                                                                                                                                                                                                                                   HERE WeGo Deliver

      OurStreets

                                                                                                                                       DELIVERY TOOL HELPS SMES MEET
                                                                                                                                       DEMANDS OF COVID-19
         ROAD SAFETY APP PIVOTS TO HELP SHOPPERS FIND
         WELL-STOCKED STORES                                                                                                           Amsterdam-based location data and technology platform             Takeaway: Organisations around the world are using
                                                                                                                                       HERE Technologies is offering SMEs a free tool to help            digital infrastructure in attempts to continue business as
                                                                                                                                       implement its own simplified and efficient delivery               usual. Several other cloud services and companies are also
                                                                                                                                       service during the COVID-19 pandemic. HERE WeGo                   offering their computational services for free to reduce the
        OurStreets, a crowdsourced micro-mobility and road safety        Takeaway: The most successful innovators are not afraid of
                                                                                                                                       Deliver will allow businesses to plan and dispatch a              impact of COVID-19. Recent data by McKinsey shows that
        app, has developed a new supplies feature for retailers          a pivot or two when circumstances change. This is the case
                                                                                                                                       delivery service without paying for software development          it took only eight weeks to launch five years forward in the
        and shoppers. The ‘Supplies’ section of the app provides         with OurStreets, which was able to integrate a new tool for
                                                                                                                                       or implementation costs. Users just upload their order            rate of consumer and business digital adoption. Moreover,
        relevant and timely local data that’s focused on which           a new market into its existing product. Many businesses
                                                                                                                                       destinations and the number of drivers to the platform,           it looks like the use of digital services is here to stay, with
        supplies are currently available in area retail outlets.         are contemplating how best to capture the gains from this
                                                                                                                                       HERE WeGo Deliver then optimises each route and delivery          75% of people using digital channels – indicating that they
                                                                         time away from usual routines. One of the challenges is
        Retailers who partner with the app can send official                                                                           sequence.                                                         intend to continue using them post-pandemic.
                                                                         how to do so in a manner that works in the long term. The
        updates on levels of crucial items in stock and, usefully, can                                                                                                                                   Find out more
                                                                         OurStreets team sees potential for supporting smaller and
        send alerts when something is back on the shelves.
                                                                         local businesses by directing shoppers to stores they may
                                                                         not have previously visited.
                                                                         Find out more
                                                                                                                                       Every day, powered by its global community of innovators, Springwise spots and analyses the latest innovations that
                                                                                                                                       promote positive and sustainable change from around the globe. For further information and to sign up to Springwise
                                                                                                                                                          visit www.springwise.com/newsletter or email them at info@springwise.com.

18 | Issue 05                                                                                                                                                                                                                                                            Issue 05 | 19
SPAR CHINA                                                       Social distancing norms are shaping shopping trips

GLOBAL | SPAR INTERNATIONAL                                                                                                  Following a challenging period, SPAR has successfully
                                                                                                                             expanded its presence in China with six new supermarkets
                                                                                                                             in the provinces of Shandong, Guangdong and Beijing. In
                                                                                                                                                                                              with a preference for proximity retailing on the rise. The
                                                                                                                                                                                              implementation of digital or frictionless technologies has
                                                                                                                                                                                              become even more pertinent, prompting more stores to
By Tobias Wasmuht                                                                                                            these stores, the proximity retailing and in-store measures      explore cashless, self-checkouts and other self-service
                                                                                                                             that are a part of the new normal in retailing have been         options to facilitate social distancing.
                                                                                                                             implemented.
                                                                                                                                                                                              Ecommerce continues to show strong growth as
                                                                                                                             The new stores ensure more communities have easy                 consumers shift their purchasing patterns from in-store to
                                                                                                                             access to daily essentials. Beyond offering produce, all         online, with growth numbers as high as 150-300% in Italy.

HOW THE WEST CAN LEARN                                                                                                       stores have implemented comprehensive measures –
                                                                                                                             including mandatory face masks – to ensure that the
                                                                                                                             health and safety of customers and team members are
                                                                                                                             safeguarded.
                                                                                                                                                                                              Social distancing guidelines are prompting more customers
                                                                                                                                                                                              from different demographic backgrounds to explore online
                                                                                                                                                                                              grocery options.

FROM THE EAST
                                                                                                                                                                                              E-grocery platforms have been on the rise throughout
                                                                                                                             Tailored to local preferences, the products on offer provide     the SPAR network for several years, with full-service
                                                                                                                             shoppers with all they need, in addition to online shopping      operations in 12 countries before the COVID-19 outbreak.
                                                                                                                             and home delivery services – ideal for customers looking to

 A
                                                                                                                                                                                              Since March 2020, the number of these solutions has
            s a worldwide brand operating across 48 countries   customers amid measures by the authorities that had a        shop from the comfort of their own homes.
                                                                                                                                                                                              grown even stronger, offering more communities easy and
            and four continents, SPAR has extensive             dramatic impact on business operations, providing valuable
                                                                                                                             SPAR stores across China have infrared thermometers              convenient access to groceries. E-grocery is now available
            experience in responding to ever-changing global,   lessons as the outbreak started to affect other regions.
                                                                                                                             at the entrance, signage to encourage space between              in more than 25 countries where SPAR operates, and the
            regional and local market conditions.
                                                                Now that more countries start to ease lockdown measures      customers in the checkout area, as well as ventilation           importance of this channel is likely to remain after we
   The COVID-19 pandemic has presented the retail industry      and we move towards the ‘new normal’, we are again           systems to ensure constant airflow.                              settle into the new norm.
  and society at large with an unprecedented set of             taking stock of developments in Asia, where retailers are
                                                                                                                             To further safeguard the wellbeing of staff and customers        WORLDWIDE VIEW
  challenges. As a global retailer we have had the unique       charting a new course in their communities with adapted
                                                                                                                             alike, stores are fully disinfected before and after trading     For the first time in our almost 90-year history, SPAR
  vantage point of the pandemic’s impact on the sector as it    business practices and trends progressing at a rapid pace.
                                                                                                                             hours as well as throughout the day. Cash registers,             retailers across the globe are tackling one common issue.
  moves from East to West.
                                                                                                                             weighing platforms, shelves and shopping baskets are             The response to the pandemic has proven the true worth of
  As the first country to implement decisive measures to                                                                     regularly disinfected. Both customers and in-store team          the SPAR ‘Better Together’ strategy – from procurement,
  reduce the spread of the coronavirus, China offered key                                                                    members are required to wear face masks, and body                buying and supply chain to sharing strategies to help
  lessons on dealing with the COVID-19 outbreak. SPAR                                                                        temperatures are checked before anyone enters a store.           mitigate risk and prepare for the future.
  partners in Asia have successfully continued to serve
                                                                                                                             PROXIMITY RETAILING AND CONFIDENT CONSUMERISM                    Throughout the pandemic, SPAR retailers have achieved an
                                                                                                                             Given the changing social distancing norms and economic          exemplary standard in serving its respective communities
                                                                                                                             concerns around the world, we are seeing a growing               by providing shoppers with their daily necessities in a safe
                                                                                                                             importance of community and proximity, as well as a              and convenient environment.
                                                                                                                             growing focus on value. As stockpiling seems to be coming
                                                                                                                                                                                              As we move forward, the year ahead will not be without
                                                                                                                             to an end, customers are buying less, and in some cases
                                                                                                                                                                                              its challenges. Shifts in consumer confidence and the
                                                                                                                             lower-margin products.
                                                                                                                                                                                              negative impact on household incomes will see consumer
                                                                                                                             Disadvantaged shoppers and communities will need our             spending move toward health, sanitation, value and online
                                                                                                                             support. Sourcing locally will be top priority and part of the   further, and SPAR well-positioned to respond to each.
                                                                                                                             new normal, as will shortening supply chains. We must
                                                                                                                                                                                              One of the key lessons from the ongoing pandemic is the
                                                                                                                             empower shoppers and staff to be safe and responsible to
                                                                                                                                                                                              essential and proven role that local proximity retailing
                                                                                                                             avoid a second wave of the coronavirus, which would lead
                                                                                                                                                                                              plays as a critical lifeline for local communities. Many
                                                                                                                             to drastic social and economic effects.
                                                                                                                                                                                              SPAR stores perform a function well beyond the sale of
                                                                                                                             As an industry, we need to be ready and agile to respond         products or services. The stores are community hubs,
                                                                                                                             to possible future virus outbreaks. In stores, building          meeting points and communication platforms supporting
                                                                                                                             employee trust as well as consumer trust through                 the broader needs of the people they serve.
                                                                                                                             additional safety measures and communication is of
                                                                                                                             critical importance.
                                                                                                                             Here, the retail sector must continue to develop new ways          Tobias Wasmuht, Managing
                                                                                                                             of working. Costs will continue to increase as we need to          Director, Spar International
                                                                                                                             keep stores and factories hyper-clean while engaging with
                                                                                                                             fewer customers and workers.

20 | Issue 05                                                                                                                                                                                                                                        Issue 05 | 21
B
                                              oots has been at the heart of healthcare in the       Caring for the most vulnerable has remained our top

GLOBAL | WALGREENS BOOTS ALLIANCE             United Kingdom for 171 years. It has operated
                                              throughout many crises, some as life-changing
                                              as the one we are facing today, but each time it
                                                                                                    priority throughout the pandemic and our pharmacies have
                                                                                                    long been a place that people can turn to for help on their
                                                                                                    local high street. In response to the desperate situation
By Sebastian James, Boots UK & ROI   has been our duty at the company to step forward and do        facing victims of domestic abuse during lockdown, we are
                                     all we can to care for the nation in its time of need. The     incredibly proud to be working alongside Hestia to turn
                                     COVID-19 pandemic is no exception.                             our pharmacy consultation rooms into safe spaces, where
                                                                                                    victims can contact specialist services for support and
                                     We at Boots are incredibly proud to be working together
                                                                                                    advice.
                                     on the frontline with the National Health Service (NHS)

 GOING ABOVE                         during this extraordinary time. Working to support the UK
                                     Government, our fantastic teams set up the first drive-
                                     through testing station for NHS workers in just five days.
                                                                                                    Ensuring that everyone has access to the essential
                                                                                                    medicines they need is also critical, so we have welcomed
                                                                                                    over 500 additional drivers to support our prescription
                                                                                                    delivery and collection service – many of whom sadly found

 AND BEYOND
                                     Now there are multiple sites up and running across the UK,
                                                                                                    themselves unemployed at the start of the crisis.
                                     supported by hundreds of Boots colleagues who selflessly
                                     stepped forward to perform swab tests on those with            New colleagues like James, a former airline pilot, are
                                     suspected COVID-19 symptoms. Their extraordinary effort        making a difference on the frontline by delivering vital
                                     has meant that Boots played a vital part in meeting the UK     medicines straight to our patients’ doors.
                                     Government’s target of 100,000 daily tests by the end of
                                                                                                    Now more than ever, we are trusted by the nation to do
                                     April this year.
                                                                                                    the right thing and like many businesses, we have had
                                     With so many of our own colleagues on the frontline, we        to make some adjustments. The safety of our colleagues
                                     have been inundated with stories that show just how            and customers is of great importance, so we were the first
                                     resilient, courageous and compassionate our teams really       retailer in the UK to order Perspex visors for our stores. We
                                     are. Emma, one of our dedicated pharmacists, befriended        also procured as much PPE as possible, marked our floors
                                     a lonely and isolated 96-year-old patient by setting up a      with social distancing guidelines and updated our opening
                                     weekly virtual quiz for him to take part in.                   hours to factor in time for deep cleaning.
                                     Similarly, Mick, one of our warehouse colleagues,              Exploring new ways for our customers to access our
                                     voluntarily postponed his retirement after 50 years of         products, services and essential items has also been key.
                                     service to help ensure essential products could be delivered   Our own skincare brand, No7, now offers personalised
                                     to homes up and down the country. Our exceptional              virtual beauty services, and vast numbers of our customers
                                     colleagues really are going above and beyond to prescribe      now prefer to shop online. Boots.com is our largest
                                     kindness in the face of adversity, and I continue to share     flagship store and since the pandemic began we have sold
                                     my most sincere and heartfelt thank you to every one of        over 50% more products online than we did during the
                                     them for their tremendous efforts.                             Black Friday sale in November last year.
                                     As a true friend and partner to the NHS, we wanted to          This is exactly what Boots is about, and in years to
                                     offer further help at this time of national need. Some of      come, these stories will be our enduring memories of the
                                     our isolating pharmacists are now helping to boost the         COVID-19 pandemic. We have and always will be more than
                                     NHS 111 triage service.                                        just a retailer. For nearly 200 years we have supported our
                                                                                                    communities, kept our pharmacies open and been at the
                                     Patients who call the service will be able to receive expert
                                                                                                    frontline of healthcare.
                                     support from one of our very own pharmacists to help
                                     relieve some of the pressure on the NHS. We have also          These are strange and difficult times for us all, but we will
                                     donated over 500,000 toiletry products to local NHS            come through stronger than ever by continuing to put the
                                     trusts, hospitals, care homes and community groups. We         health and wellbeing of our nation first.
                                     hope it will help patients feel just a little bit better.

                                                                                                      Sebastian James, Managing
                                                                                                      Director, Boots UK and ROI

Yau Ming Low / Shutterstock.com

22 | Issue 05                                                                                                                                                  Issue 05 | 23
5
                                     0,000, 80,000, 120,000, 210,000… Looking at the          THE RURAL EXPLOSION

  ASIA | CHINA                       skyrocketing number of viewers, Fengju Qin, the
                                     head of Baishui county in China’s Shaanxi province,
                                     couldn’t believe there were so many people
                                                                                              Baishui is the first county in China to be honoured as the
                                                                                              ‘Hometown of Apples’, and has been selling to European
                                                                                              and US markets. The outbreak of COVID-19 resulted in
  By Yuchuan Wang, JD.com    interested in watching his livestream selling local apples.      nearly 200,000 tons of unsalable stock which should
                             He acted like an experienced sales assistant, saying:            have been sold out during the Chinese New Year sales
                             “Baishui apples, juicy, crispy and sweet. You’ll certainly not   season. To rescue the farmers, Qin contacted JD and went
                             be disappointed!”                                                on the livestream himself, together with influencers
                                                                                              introduced by JD.
                             In two hours, his livestream on JD.com’s app attracted

   LIVESTREAMING BECOMES A   more than 210,000 shoppers and sold over 100 tons of
                             Baishui apples.
                             Not only farmers, but many brands and retailers have turned
                                                                                              Qin is not the only local official to pick up livestreaming
                                                                                              during the period. Over 120 mayors, county heads
                                                                                              and other civil servants joined JD’s livestreams during
                                                                                              the epidemic to act as anchors and promote local

   NEW REVENUE GENERATOR
                             to livestreaming during COVID-19 to help reduce the impact
                                                                                              agricultural products. Total cumulative viewers has
                             and losses from the epidemic. According to China’s Ministry
                                                                                              surpassed 100 million.
                             of Commerce, there were more than four million ecommerce
                             live broadcasts hosted in the first quarter of 2020.             “Rural livestreaming is a more intuitive and transparent
                                                                                              way for consumers to shop online. But in fact, many
                             “The epidemic is devastating bricks-and-mortar stores,
                                                                                              farmers don’t know how to use it at all,” says Zhang.
                             but it also brings opportunities. Ecommerce giants
                             like JD.com have used livestreaming as a new revenue             When Wenfeng Wang, the boss of Shouguang vegetable
                             generator for businesses.” says Guowei Zhang, head of JD         base in Shandong province, did his first livestreaming on
                             Live, JD.com’s livestreaming business.                           JD, he did not have any professional equipment, like a
                                                                                              microphone. “Farmers like myself and my family had never
                             Livestreaming was already becoming a phenomenon in
                                                                                              done a live broadcast before. We just watched how other
                             China, and the outbreak of COVID-19 has only accelerated
                                                                                              merchants do it and tried to imitate,” he said.
                             the trend. According to iiMedia Research, the number of
                             livestreaming users increased 10.6% to 504 million in 2019,      JD started to help farmers like Wang as early as during the
                             which accounts for more than half of China’s total 854           Chinese New Year holiday to get their businesses online.
                             million netizens.
                                                                                              On 13 February, JD announced special support mechanisms
                                                                                              for merchants and influencers doing livestreaming
                                                                                              ecommerce to better support the rising demand for online
                                                                                              shopping. For example, JD Live reduced the take rate to
                                                                                              as low as 1%, provided extra traffic support, 24x7 training
                                                                                              and quick access to JD Logistics, which is among the few
                                                                                              logistics companies still operating at the height of the
                                                                                              epidemic.
                                                                                              For projects specifically aimed at helping farmers, JD Live
                                                                                              also provided special policies like fast enrollment and
                                                                                              subsidies. Many influencers volunteered to provide free
                                                                                              services to help farmers do lives too.
                                                                                              Wang benefited from this policy and his livestreams
                                                                                              began to attract more and more traffic. “Gradually, we’d
                                                                                              make 1,000 to 2,000 orders each time. The influencer JD
                                                                                              introduced helped us reach a larger fan base, and then the
                                                                                              local county head also joined us.”
                                                                                              Sales of Wang’s farm skyrocketed to RMB 200,000
                                                                                              (£22,000) in February and to RMB 1m (£112,000) in March.
                                                                                              The online channel accounted for almost 90% of Wang’s
                                                                                              total sales during the epidemic when offline wet markets
                                                                                              were closed and other logistics companies were suspended.
                                                                                              “I’ll keep doing livestreaming and working with the
                                                                                              influencers,” said Wang. He hopes he can bring more
                                                                                              neighbouring farm heads to join him to enjoy the benefits
                                                                                              brought by livestreaming.
                                  Fengju Qin livestreaming on JD

JD Health doctors
                                                                                                                                                      Issue 05 | 25
You can also read