Get on Board or Get Left Behind
With an unprecedented event like the COVID-19 pandemic, no universal playbook exists to guide companies on how to resume, reinvent, or reinvigorate operations. Everyone is maneuvering as best they can, but it’s now time for companies to take a hard look at their go-to-market innovation strategies.
At the heart of that is innovation. In this installment of our “Deinvest to Reinvest” Virtual Leadership Summit blog series, we return to moderator Thom Blischok of The Dialogic Group and panel members Anne Zybowski of Clorox, Jim Norred of Microsoft for Walmart, Patrick Spear of GMDC, and Bill Campbell of Premium Retail Services.
Old-School vs. New-School Approach
COVID has changed everything. It is critical that companies leverage current and emerging technologies to rise to customer expectations, as well as shift processes relating to the supply chain.
Anne Zybowski of Clorox illustrated this shift in terms of moving from old-school economics to new-school economics, and why it’s important to “lean in harder” to e-Commerce as part of a deinvest-to-reinvest strategy to address go-to-market innovation.
“We have to think hard about where some of our traditional monies and efforts at the intersection of retailers and CPGs have gone, as well as how we communicate and engage with the customer. The old economics forced us to think that we could move consumers into channels, but now people are going to whatever channels they can,” she noted. “We fundamentally need to revisit the old [economics] and look at how we can reinvest more into digital, because that’s the way we’ve connected.”
Patrick Spear of GMDC discussed how many manufacturers are considering a streamlining of product lines. As an association that serves both retailers and suppliers, GMDC witnesses shifts from a retailer’s perspective, predicated on consumer demand—but also from the suppliers’ perspective in terms of demand shock and the supply chain.
“There’s the necessity right now to think differently about product assortment and where [companies] are putting the focus, just to meet near-term consumer needs. I think this is going to be a lasting trend,” shared Spear.
Technology in Action
Bill Campbell of Premium Retail Services provided three examples of technology in action. “We are overhauling our digital and commerce strategy with a heavy focus on virtual reps, which I think are going to get big in the future, online brand champions, and then trying to position ourselves to help with online order/pickup at store initiatives. Second, we have to hyper-focus on reducing costs so we’re ready for the future. And lastly, trying to ready ourselves for retailer shifts—including [retailers] outsourcing more operational responsibilities so that we’re ready when they’re ready.”
Bringing the Store to the Customer
Looking at the progress of technology integration into the shopper’s experience, Jim Norred of Microsoft for Walmart, stated that the COVID-19 crisis has drastically changed shopper expectations. This evolution requires re-imagination from the inside-out, as it relates to considerations like digital storefronts, order fulfillment, auto-replenishment, dark stores, micro-fulfillment, and home delivery.
“If [customers] can’t come to the store, you have to start thinking about ‘How do I bring the store to the customer through digital experiences?’ There’s been this topic around contactless shopping, but that’s really now frictionless shopping. Shoppers will be loyal to the brands that can deliver on these new experiences the way they want,” advised Norred.
Addressing Health & Hygiene
Also factoring in to the shopping experience—and shoppers’ expectations—is the component of health and hygiene. Spear spoke about this in terms of micro-fulfillment centers (MFCs), which he says “are coming.”
“How we think about front-end contact-less, frictionless, in the future—but also what role innovation and technology plays around health and hygiene. Not just for the store associates, but also the customers.”
Part of this involves the exploration into “COVID certification” to ensure hygiene and sanitation—and where that might be implemented as companies move forward. “If you have lead certification for a building, why couldn’t you have COVID certification for a restaurant, or a bar, or a distribution center? If there are policies and protocols you could follow to ensure [safety], from a standpoint of being a great place to be an employee, or a great place to shop, COVID certification would be relevant,” added Spear.
Why Working from Home Is Much More than “Convenience”
Norred expanded upon the technology aspect from a slightly different operational perspective: working from home (WFH). After 25 years working with retailers and CPGs that haven’t supported WFH, he avers the mentality that “work from work” as a superior way to conduct business is waning.
“That’s simply not the case today. I think technologies like Teams and Zoom or other collaboration tools are enabling [WFH], and I think you’ll see it more and more from traditional companies. It’s one of those things that can help drive costs down, because you don’t need the real estate anymore.”
Norred also noted that many companies are realizing how employees are proving to be more productive in a WFH environment.
Disrupt, Disrupt, Disrupt
All panelists were staunch that the approach of “wait and see” is not an option.
“Companies will have to begin creating and dedicating efforts to disrupting their own business models. Creating truly differentiated consumer experiences and operating models that let them compete versus waiting on [the pandemic] to be a forcing function,” stated Norred.
Without a concerted effort into innovative solutions across the board, businesses will unfortunately be left behind. “We think about innovation three ways: products, service, technology. You can’t have one without the other,” advised Spear.