PAST | Early COVID days

Business priorities had to shift almost immediately around objectives, localisation, and collaboration. On a macro-economic scale, foreign direct investment decreased, migration ground to a halt and global supply chains and trade suffered. On a micro-economic scale, consumers chose to shop locally, community circles were made smaller due to mobility restrictions and social distancing, while local brands and products obtained more shelf space and increased consideration from consumers.

On the flipside, the pandemic significantly accelerated the adoption of tech and the sharing of ideas across borders which is expected to result in a surge in the rate of internationalisation. In a survey conducted by Advantage, 64% of manufacturers and 77% of retailers believe that collaboration has strengthened during the epidemic. A significant shift, as prior to the virus, trade wars, stricter migration policies and general protectionist sentiment were on the up.

Key drivers and benefits of the manufacturer and retailer collaboration going forward will evolve around increased rate and delivery of innovation, superior value creation for consumers, increased support for onmi-channel offerings, faster speed-to-market, and the alignment of priorities.

PRESENT | In the Thick of Things

Many markets, that Smollan and our partners operate in are starting to move out of lockdown and into relaxation. Agility and flexibility of business models and operating procedures will be a key factor for success in the weeks and months to come and the shifting phases will come in a series of waves. The balance of infection rates vs the opening of the economy will be the yardstick.

Several trends in terms of phased timing have been observed. The countrywide lockdown phase has the ability to be extended or re-instated depending on the levels of infection and a particular countries health care capacity. The relaxation phase introduces more localised lockdowns if required and consumer spending, bearing in mind the adaptation to a sense of safety in public spaces, does not surge immediately in this phase.

Governments have become the most influential force in controlling access to market opportunities as they play an active role in the retail ecosystem. Actively observing, managing, and aligning with government initiatives to mitigate risk and leverage opportunities will be a key success factor in the long run.

FUTURE | Horizon Scanning

Key social, brand, category and channel indicators will set the pace for the immediate post COVID-19 restrictions.

Social Indicators
The focus will continue in terms of hygiene concerns in retail and public spaces along with overall health concerns until a vaccine is in place, likely well into 2021. People will value experiences over ‘things’ and the sense of community will continue following heavy reliance on local retail and resources during lockdown phases. Unemployment will remain high but as industries pick up, hiring will do the same.

Brand Indicators
Supply chains will be impacted with border control restrictions for import/export along with government support of local production. Value focused shoppers will continue to shop frugally amidst economic uncertainly and personal financial hardship.

Category Indicators
Social distancing will remain in place in retail into 2021. With the continued focus on food and necessities, spending is expected to improve on low priced non-essentials. Range rationalisation should be expected following the low spend on non-essentials, and promotional activity could potentially be reduced.

Channel Indicators
There will be a continued focus on omnichannel solutions with retail focusing on operational efficiency over theatre. An expected increase will be noted in buying groups to stabilise supply for small retailers and retail development of new technologies and micro fulfilment centres (MFC) on the increase. A slow return to Out of Home eating is expected.

BEYOND

Certain behavioural shifts that may extend beyond the Pandemic will call for new approaches such as a new-found respect for physical and digital experience. Redefining personal autonomy as we rethink our place in the world both mentally and emotionally and new regulations altering our sense of space and physical interaction. Doing good to do well and leading with purpose will re-set our radar as businesses and individuals show greater appreciation and responsibility to local communities. Retail will be behavioural driven with fresh creative approaches employed to activate brands which do not involve human contact.

From more sales, growth, stores, traffic, and loyalty to a post COVID-19 era of more compassion, relevance, empathy, patience, understanding and connection.

Smollan is ready to support and implement various effective solutions from eCommerce expediting online selling capabilities, to virtual advisors, click and collect sampling, in-store and home deliveries, sampling with eCommerce and delivery partners and digital coupons tapping into a 500 000 strong shopper database.

Contact our Growth Team, for more retail insights like these or to set up an appointment for a one-on-one insights & trends session.

Visit smollantogetherstronger.com for updated information on developments in managing the COVID-19 outbreak across our business globally.

Sources:
IGD Post-COVID-19: How the pandemic will change grocery retail
Tim Sutton
Advantage