Patrick Spear is the president & CEO of GMDC | Retail Tomorrow and a contributor to Supermarket News. Spear joined GMDC | Retail Tomorrow in 2014 after nearly two decades of involvement with the association as a supplier member during his tenure with multiple CPG manufacturers including BIC, Newell Rubbermaid, Mapa Spontex, Identity Group, and Mammoth Office Products.
Many parts of the country are finally entering a recovery phase following the rollout of COVID-19 vaccines and lifting of restrictions. As the world reopens, retailers must continue to evolve alongside a renewed sense of consumer confidence.
However, challenges remain. Some states and communities are not recovering as quickly as others, new variants of the virus are propagating and the supply chain is experiencing historical backlog — all of which will continue to impact how retailers navigate this year.
With these variables still out of retailers’ control, brands are encouraged to continue relying on certain trends that emerged in 2020 to reinforce consumer confidence and create an experience that shows they understand their local shopper.
Overcoming Supply Chain Fragility
Before the COVID-19 pandemic, port cities in the United States would typically see one container ship anchored offshore, according to the Marine Exchange of Southern California. In February 2021, 40 container ships were anchored off the coast of California at ports such as the Port of Long Beach and Los Angeles, through which roughly one-third of the country’s imports pass. The impacts of the pandemic have triggered this severe backlog in the supply chain, affecting retailers and consumers alike. What’s more, the container ship that blocked the Suez Canal for six days in March further perpetuated delays and challenges.
Supply chain issues have created ripple effects industrywide, but pains have been especially felt by independent retailers, which struggled to keep essential goods stocked due to what they acknowledge is an unlevel playing field that has long existed between small and large businesses.
The supply chain is inching its way back to normalcy, but a year of adapting to consumer needs and scrambling to procure and deliver merchandise ranging from PPE and cleaning products to home décor and seasonal assortments during stay-at-home orders still impacts the retail economy today.
As consumer behaviors continue to shift and the economy begins accelerating again, certain chain challenges remain. While panic buying and the “Great Toilet Paper Scare” of 2020 have come and gone, retailers still face a significant imbalance between supply and demand based on the congested supply chain system. To overcome this, they must readjust their strategies and find unique ways to lock in customers as the retail landscape works its way back to equilibrium.
Reimagining the Retail Calendar
We are witnessing a return to certain pre-pandemic consumer habits as many regain confidence in our “new normal.” However, certain habits uncovered in 2020 will remain even as the seasons change.
While it will vary by region and company, today’s work-from-home culture is likely here to stay at some level. With consumers pouring more investments into their home lives, how can retailers insert themselves into categories where they previously may not have been a destination?
It used to be “easy,” for retailers. There was always a playbook to follow.
Historically, when the month of May rolled around, retailers offered beach chairs, umbrellas, charcoal, pool toys and more. Retailers would sell these seasonal products, mark them down, get them out of the store and move on to the next seasonal event. The calendar of events was established each year like clockwork.
However, knowing now that we have various parts of the country still in varying levels of lockdown along with supply chain disruption, what retailers have historically done may no longer work, nor may it be relevant for their customers this year. Some categories that retailers historically merchandised as seasonal may begin moving toward year-round or extended seasonal purchasing opportunities.
It’s time for retailers to reimagine their strategies and assortments.
Retailers must assume at-home gatherings will continue to increase in momentum. While restaurants reopen as people feel more comfortable, the behavior shifts of spending time socializing in a backyard or maximizing the investment made last year on a new grill or patio furniture will play key roles in retailers’ strategies. Retailers must find ways to set themselves up to delight customers in ways that enable them to continue building habits at home, regardless of where the country stands in its COVID-19 recovery.
Knowing what we know about today’s consumer habits and navigating the supply chain, retailers must go the extra mile this year, think differently, reorganize their traditional calendar and localize offerings to create solutions to attract and retain their customers.
Prioritize Your Local Customers
Retailers understand supply chain improvements are coming, but how a retailer understands its local shopper and responds to COVID-19 ordinances will inform how they create a unique experience to lock in their customers. Inventory must look different from store to store.
Until every city is back to “normal,” there will be opportunities for retailers, regardless of what part of the country they’re in, to think about what is happening in their own backyard and tailor their assortment and inspire their customers (for example, offering meal kits for at-home cooking or hosting dinner parties).
Retailers no longer have the luxury to say, “We can’t get this product, this isn’t what we sell.” Their owners, shareholders and stakeholders will always challenge them to find a solution. Just because retailers may not be able to acquire certain products this year doesn’t mean there aren’t opportunities to pivot and find other ways to delight their customers.
To ensure relevancy and continue innovating amid challenges and opportunities, retailers must reimagine product assortment, find ways to reconnect with shoppers and deliver solutions for their local communities and rewrite their playbook for this new era of retail.