Retail

Strategy Rules: How To Play For The Pandemic

Strategy Rules: How To Play For The Pandemic

There is no playbook for a pandemic. It's a truth repeated over and over in the press, from analysts and executives during the last week of earnings calls. However, this most threatening of business climates is hardly the time to strike the tents and abandon all hope of controlling a company’s destiny. But particularly in the retail space, this phenomenon seems to be playing out. Retailers seem to be awaiting a government bailout that has been too slow in coming, or waiting to see what consumers will do as a slow reopening unfolds.

As Tom Petty said, “the waiting is the hardest part” – and he was right. Businesses that continue to wait won’t just see the hardest part of their tenure – it’s possible they could see a downturn and a level of debt that’s impossible to overcome. Although there is no playbook, there are strategies and tactics that defined pre-pandemic retail and can perhaps contribute to saving post-pandemic retail.

The first is scenario planning. At the risk of alienating New England Patriots haters, coach Bill Belichick calls it “situational football.” In short, it says: “Here's the situation. If this happens, do this. If something else happens, do this.” Mall owners and big-box retailers especially can be more aggressive here. Right now, eCommerce with curbside pickup (or just straight-up eCommerce) seems to be the fashionable approach – but it won’t work when stores start to open. Retailers need a war room (or war Zoom) to plan for scenarios.

For example, if consumers rush to physical stores, make sure staff is available to restock and clean the sales floor. If they don’t show up, prepare email blasts that show the retailer’s commitment to clean and safe shopping. Of course, there are more specific scenarios to consider. In fact, there are as many as there are customer segments. But that, too, seems to have been a foregone tactic.

Customer segment planning and predictive analytics have been absent from any recent retail marketing discussions. As customer segments will change, the need to segment by income or demographics is over for now. Instead, what if customers were segmented by their approach to returning to “normal” shopping behaviors as suggested by the PYMNTS COVID-19 surveys? In that case, retail segments wouldn’t be “soccer moms” or “loyalty program members” – more valuable segments could take their place, such as “waiting for a vaccine,” “ready to shop” or “waiting for CDC clearance.”

That new segmentation approach will demand an old approach to data. Whatever happened to data-driven decisioning? Even an astute and sophisticated marketer like Apple CEO Tim Cook seemed to show an absence of data awareness on the company’s earnings call last week. When addressing the increase in sales for the MacBook and iPhone, Cook pointed to new models and new technologies as possible reasons. But why shouldn’t he know exactly why consumers are buying these products? After all, his company has the resources and the consumer data to predict the scenarios that could present themselves post-pandemic. Did Mac sales go up because people are working from home? Or were those purchases made to mollify restless and homebound kids? Maybe Cook and his team were playing coy. But the company’s continued success would seem to depend in part on this knowledge.

Marketing strategies have been somewhat shoddy during the pandemic. Maybe that’s due to the completely unprecedented nature of the situation. At its most basic level, marketing aims to create excitement around a product or service. Many retailers can only create excitement around low prices, which is a short-sighted approach. This has been especially disappointing from an eCommerce perspective.

Brands that are normally known for sharp marketing and innovative consumer engagement tactics have gone dormant – and, at worst, have created destructive cycles for their post-pandemic businesses. The list of solid brands that have suddenly become super discounters includes Nordstrom, Macy’s, The Gap, Lowe’s, J. Crew and countless others. They have slashed prices in hopes of moving inventory, but it’s hard to believe they couldn’t do better by involving customer segmenting and old school data-driven decisioning.

There might not be a playbook – but there are still plays. And as any coach in any sport will say to his or her team: Let’s get out there and execute.

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