It has been a tough one year for the Retail Sector. The onset of COVID-19 and the shutting down of stores and malls indefinitely was a challenge no one had predicted. Millions of retail employees lost their jobs. Retailers were left with little manpower as workers migrated to their native places, and with each day turning up huge financial losses, the situation has been chaotic and worrisome to say the least.
The pandemic has been a once-in-a-lifetime test of business continuity planning for retail businesses across the globe. Even when things have stabilized to an extent and economies are gradually opening up, the industry is being confronted by a hard question – what’s next? With little to no revenue in sight for months, brands and retailers turned to those who they have always looked upon to lead them when the going gets tough – their CEOs/ MDs/ Business Heads.
In this crisis situation, every employee, be it a different business/company/store, looked up to its management for a solution, a way forward and a time frame assuring their future prospectives. The heads of companies who had the authority to make decisions were in the line of fire to take their brands away from the crisis and direct them on to a path to normalcy.
It is said that leadership is an influence. One doesn’t lead by pointing at a place and asking people to go there. One leads by going to that place and making a case. Similarly, leaders from different brands had to lead from the front in this fight for survival. The last one year was time for some serious strategic planning, decision making, investing in new areas, resuming business, implementing digitization, technology, innovations and also ensuring safety to the employees and consumers.
The task for leaders was to offer a perspective on major concerns, find measures that proved most successful in mitigating the human and business impacts of the virus, and to lift the operational emphasis shifted through the pandemic.
Retail captains were known for doing the following in the last crucial year for the industry:
- Managing the business continuity during the crisis.
- Scenario planning for minimum survival.
- Managing the drop in demand and adjusting supply.
- Dealing with decline in confidence and lifting team morale.
- Coping with staff shortage.
- Countering the dependency on the brick-and-mortar store.
- Delivering digitally.
- Communicating with consumers digitally and creating loyalty programs.
- Keeping expenses in check and creating backups for budget deficits.
- Preparing for the unexpected.
Aside from this, technology and digitalisation came to the rescue and industry leaders worked towards:
- Contactless payments
- Contactless & home deliveries
- Using social media platforms to communicate with consumers (WhatsApp Calling etc.)
- Offering digital menus and inventories
- Click-and-collect concept
In this CEO Special series, IMAGES Retail brings you exclusive interactions with 21 retail stalwarts who talk about their company’s growth, vision and future plans which would determine its position beyond COVID.
What steps did you take to bring the brand firmly on the road to recovery?
‘Past holds the key to the future’ therefore, we fished out data for the period immediately succeeding the global recession in 2008/2009 and also the data immediately after the demonetisation in India. We analysed how the sales performance was, during one year after these two events. Armed with this data, we now had a tool to project future with suitable modifications with current reality. This provided us reasonable numbers in respect of projected sales and in-turn the need of inventory volumes etc. to be kept for expected sale. In addition, we did:
- Maintaining & Communicating the Social responsibility – Safety & basic Hygiene
- Cost Cutting & Spending judiciously: COGS, Personnel Cost & Occupation Cost.
- Relationship Building with customers, employees & business partners
Did you emphasize more on a digital presence in this time period or did you opt for the traditional retail model with minor adjustments?
During these tough times, the retail industry witnessed an acceleration of digitalisation. In the same vein, we also gave due importance to our online business wherein we maintained an adequate supply of products and invested in marketing initiatives on our flagship digital store -www.lacoste.in. We were also well-stocked on other online market channels like Myntra, Tata Cliq Luxury & Ajio.
However, during this pandemic situation, wherein the physical stores are facing less footfalls due to the fear factor, we have strategized in such a way that we should get the maximum benefits through our offline stores as well. We have maintained all safety & hygiene standards as per the government guidelines at all our stores. In addition, we were also assertive on imparting online training for colleagues on Customer Service so that they provide the ultimate lifetime shopping experience.
The above and other such initiatives helped us immensely during these tough times.
Have you launched any innovative consumer experiences over the pandemic period?
We certainly tried to enhance customer experience through a multi-pronged approach. We focused on relationship building with our customers, built new and improved strategies for new channels of distribution – online and offline. This helped us in building trust and loyalty with customers and also helped us in maintaining reasonable sales numbers during this ongoing pandemic.
Does your brand have an Omnichannel / Phygital strategy? If yes, elaborate.
Wherever the customer chooses to shop, online or offline, he should be exposed to the entire inventory that a brand has on offer. Earlier, on several occasions, it would happen that a customer would like a product but may not get his size, or color preference. With Omni-channel, the ability to service a customer – give him doorstep service – from anywhere in the country became very easy.
Which are the new technologies – both in-store & online – that you have introduced in an effort to go contactless?
Considering the safety norms during COVID, we have ensured the maximum safety standards starting from the warehouse, with our delivery methods and at the stores. In addition, we have ensured the optimum use of our Omni channel strategy to provide seamless delivery of products by ensuring all safety standards and thus enabling the social distancing with our customers.
How has been the consumer response been like in the festival season? Were you able to match the level of business and profit last year?
Festive period turned out to be a silver lining for us and the sales hinted at a good year end. However, literally ‘no sales’ in the period between March and July and like to like YTD sales cannot be made up just by the festive sales. In terms of sales contributions, the brand has been able to register good numbers, especially through online sales, which contributed to almost 40 per cent of sales. Our on Digital Flagship www.lacoste.in turned out to be the largest point of sale in the entire system that reinforces the customer belief in the brand irrespective of the situation driven by the pandemic.
Stores in malls vs streets, which ones are bringing in more revenues / raking in more footfalls? Why?
We have relatively smaller number of high street stores operational on Pan India basis. Therefore, it would be a bit difficult to compare those with the Malls. While initially we did saw a traction in high street POS as compared to Malls, however, to a large extent, we are not experiencing much distinction in customer buying behaviour from malls or high streets, post the lockdown was completely lifted.
Has the brand reached pre-COVID levels in terms of sales? If no, how much more time will be required to reach the same?
As COVID has a worldwide impact and has created so much uncertainty, it is difficult to predict the future wherein we can see at least the same kind of sales momentum that was witnessed before COVID. But I do believe that every cloud has a silver lining and with resilient approach, one can definitely sail through this unfortunate situation. Also, with recent news updates on COVID vaccination, we expect to see decent recovery in the coming financial year.
How much has the company grown under your leadership during COVID?
Life is full of surprises and we do face similar kind of challenges now and then in both personal and professional areas. These challenges are part of life, especially when you are on a growth trajectory. Through this ongoing pandemic, I have learnt that what pays off well during tough times is resilience and perseverance. It might take some time, but it certainly delivers. With this approach, we have managed to sail through these tough times while ensuring the safety and providing the maximum benefits to our customers, partners & employees.
What are your future plans?
- Cost control and spending judiciously: COGS, Personnel Cost & Occupation Cost.
- Relationship Building with customers, colleagues & business partners
- Focus on basics, go back to routes
- Training Programme for employees on Customer Service
- Improved Supply Chain
- New Channels of distribution – online, Omnichannel
In addition, sustainability will score over expansion / growth. Be prepared to take some tough decisions to move towards profitable growth rather than just growth