Grocery retailers have been in the spotlight ever since the first signs of COVID-19 began to impact our daily lives. From toilet paper hoarding to confrontations over masks, grocers have been all over the media. Deemed essential, supermarkets were allowed to stay open throughout the worst of the lockdown, although none were prepared for the onslaught of business that was to come.
Even though Covid-19 continues to spread and daily death tolls are in the high hundreds, that’s down by about a third from the high point in April. Most consumers are ready to get back to some sort of normal. Non-essential businesses (those that did not succumb to the lockdown) are ready to re-open.
At the outset, many supermarket operators made an effort to acknowledge the frontline dangers to which store employees were exposed by offering bonuses or bumping up hourly pay rates. Most have rescinded the pay increases (with the notable exception of Texas-based H-E-B) as states open up in a phased process.
Until a vaccine is found some sort of modified behavior will be expected, both from businesses and consumers. Food retailers have all developed new processes and habits. Plexiglas separates the cashier from the customer. All employees and many shoppers wear masks. Carts are cleaned and sanitized throughout the day, although that’s typically a clerk at the front with a bottle of cleaner and a roll of paper towels.
As stores re-open, look for a new normal, and shoppers begin to venture outside again, there are 10 things grocers should be doing now to protect workers, shoppers, and market share. These are table stakes, and should form the foundation only.
1. Make cleaning part of the daily regimen forever. This doesn’t mean that clerk at the front door with a spray bottle and a towel. There are several companies offering industrial-level cleaning; it’s time to take this seriously as a long-term practice.
Also, the cleaning needs to go beyond just the carts. Shelves, products, and counters are all high-touch areas. Amazon has developed a UV light process using a robot. Think long-term and store-wide.
2. Fix your in-stock conditions. Granted, this is already at the top of most lists. But we’re more than three months in and you’re still out of taco shells and oatmeal. This is a priority. Pantry loading will impact sales of non-perishables like detergent and HBC products, which should provide enough slack to refill shelves.
3. Take care of your employees. If you gave them a raise, keep it going until the all-clear. If you’ve already taken in back, find a non-monetary method to reward them. Don’t claim you can’t afford it; everyone knows you’re having record sales and raising prices. Develop an exit strategy for when it is time and be transparent about it.
The next labor union contract negotiations will be interesting, and are sure to include future guidelines for pandemics and other disasters.
4. Teach your customers how to cook. This is an opportunity to connect with your customers and show them the myriad benefits of home cooking. It’s more than 90 seconds with a microwave, or five ingredients with the Tasty app. Create online cooking classes (there are options already in the can) and give your customers access so they can develop skills that will help you both.
CPG manufacturers have tried to adapt — Oreos have made a come-back since we’ve all been staying home. This has pushed the bread-baking craze out of the spotlight. Some of this is because many — most? — shoppers don’t know how to cook, and don’t know how to learn.
5. Rethink your loyalty program. Are you just gathering data, or do you really know who your best customers are and why they come to your store? How can you engage them more effectively? What do you do for your top 20 percent that the rest don’t get?
Shopping behavior has changed. According to FMI, 28 percent have switched to online and 15 percent avoid their normal store. Never in the history of grocery operations have we seen this sort of mass exodus from the weekly trip to the local store.
6. Connect your B&M stores to online. Shoppers have gone online overnight. Many of them will stay online post-crisis. How well does your online experience mesh with offline? Do you offer the same deals in both areas? Are online prices tied to a store based on the shopper location?
A bigger question is your commitment to online. Are you just holding on until things settle down? Chances are that even once that happens your online shopper base will double — or more. Are you actively courting online or just putting up with it?
7. Develop a new go-to-market strategy. Your shoppers have changed. Have you? Is your value proposition still relevant? Are you sure?
Now is a time for active social listening. If your company isn’t active on social media, fix it now. That doesn’t mean posting sale prices on Instagram. Engage and participate. Find or create social gathering spaces where you can tap into your customer zeitgeist.
8. Own the relationship. If you are outsourcing the online part of your business, you’re handing your customer relationship to a third party. That will come back to haunt you.
Instacart raised another $225M in funding, giving it a valuation of $14B and making its founder a billionaire. For comparison, Albertsons has a valuation of about $19B. But Instacart has essentially no assets other than agreements with retailers.
9. Create an agile response team. Put together a team that can track customer changes and create fast-fail scenarios to help you stay on top of fluctuating customer needs. This is a full-time job — invest in it.
Find an outsider with relevant knowledge of the industry, its history, and who has seen how mistakes are made. Give that person the necessary resources to look ahead and plan for the next major disruptor.
10. Listen. To your customers, your employees, your suppliers. No, really listen.
Business unusual is here, and how you respond will determine your future.