Actions to Consider
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Protect your employees and customers
For headquarters staff, the challenges presented by this crisis—working remotely, defining contingency plans, and maintaining morale—are difficult but manageable, given ample technological solutions.
The real heroes are in the field: the cashiers, the shelf stockers, the drivers, the warehouse workers.
Food retailers must step up frontline hygiene and limit human contact as much as possible, using as much technology as possible. Several retailers are encouraging self-checkout, minimizing cash payments, stocking shelves only before or after store hours, and having drivers drop off deliveries at doorsteps rather than handing them to customers or going inside homes.
Beyond workplace and store safety, it is crucial to create an environment that fosters social distancing or isolation to protect the vulnerable. We have seen retailers implement paid sick leave for affected employees, free testing, and stay-at-home policies for employees who have colds or are feeling ill. Food retailers must also prepare for worst-case scenarios by, for instance, proactively creating backup plans for the most crucial staff, working in A/B teams, and moving quickly to hire additional flexible capacity. Several retailers have shown positive examples of employee and customer care. Other retailers are donating food and essential items to the needy in their communities or offering free meals to healthcare workers and first responders. -
Secure business continuity
Food retailers must keep the lights on: stores and distribution centres must stay open, employees must continue to work, home deliveries must be made, and customers must be served. This has proven challenging, especially when schools and childcare facilities are closed. Equally challenging is meeting the enormous spikes in demand on e-commerce sites—with the associated struggles of getting enough delivery drivers, giving customers accurate delivery time slots, and keeping the IT systems running.
Food retailers must take the time to listen to customers’ most acute needs, and then use those insights to both jury-rig solutions and define new ways to serve customers for the short and medium terms. For example, some retailers have had to flex space allocation radically to accommodate surges in demand (such as dedicating more store space to toilet paper and hand sanitizer); others have switched selected stores entirely to click and- collect formats to protect both customers and employees. Companies must work with the government, suppliers, employees, and service providers to develop a set of minimum norms for operating during the crisis. -
Transform your business model to ensure that it is tech-enabled and future proof
The crisis has accelerated many societal trends that were already underway: remote working, online shopping, tech-enabled retail, and localized supply chains. Even as food retailers address today’s short-term challenges, they should take the time to rethink their business models to become more efficient—and, therefore, less exposed to shocks:Stores. Can you make your store model cashless or virtually cashless? Can you replace the cashier based model with a seamless no-checkout model? Are you using data to measure on-shelf availability in real-time? Are you automating replenishment?
— Supply chain. Are you embracing technology sufficiently in warehousing and transportation to reduce the burden on labor? Have you adopted machine learning in your forecasting so that you can spot abnormalities fast and adjust immediately?
— Merchandising. Are your merchants equipped with the technological tools to run their categories “customer back” and remotely? Have you diversified sourcing sufficiently to de-risk future shocks? Are there reasons for you to pursue more vertical integration or more strategic partnerships? In light of the latest consumer trends, are you striking the right balance between local and international partnerships? Should you expand your position in private labels in the face of potential GDP adversity and customers’ quest for value? Or, put another way, should you introduce more private labels with a diversified but primarily local supplier mix?
— E-commerce. Can you accelerate investments in a seamless online-to-offline experience and proactively shift spending to your online channel, in a model that serves the customer better and is sustainable over the long term? Do you have a scalable technological backbone and delivery network to flex up and down as needed?
— Head office. Can you transform your head office into a flexible, remote-working team supported by tech and data? Are your systems able to handle the increased load and cybersecurity issues that come with distributed remote work?
We have full confidence in food retailers’ ability to handle this crisis. In every country, you—as leaders in the food industry—are crucial to the health and well-being of the population, both today and in the future. The actions we’ve outlined here can help you and the other leaders in your organization navigate this current crisis, as well as build and strengthen your business for the longer term.