There is a real-time global awakening in the retail and restaurant sectors today. Retailers and restaurants are acting with urgency to rapidly transform their businesses, from supply chain updating to training their frontline employees and more.
While there have been marked differences from country to country in the response to COVID-19, a common global experience for retailers and restaurants was that they were taxed to the limit of their supply chains’ capacity, then needed to quickly implement safety procedures, and then had to adjust their game plan based on guidance from their governments.
Now, retailers are urgently focused on making their shopping experience digital, contactless and pandemic-proof. The impact from COVID-19 continues to be a “do or die” proposition for many retailers as the first wave of the pandemic continues and as most businesses prepare for a second wave.
An often-repeated statement is “all of our digital plans for the next five years will be executed in the next 12 months.” The good news is that those that have made the adjustments are thriving, creating new revenue streams, new businesses and adding new customers.
Following are summaries of the response in key markets around the world.
China: Hit First And Hit Hard
I received a call from a friend in Shanghai this past January; she said that there was fear in the air about COVID-19. The city of Shanghai was shut down, life was at a complete standstill and the future was uncertain. I intuitively understood that the speed and devasting impact of COVID-19 required a different approach in order for retailers and restaurants to succeed. “Business as usual” would not be effective and understanding the scope, speed and impact of COVID-19 was imperative. This Retail Store Tours China video from March in Shanghai shows the conditions in China at that time.
As global retailers and restaurants bound together with the same challenges and opportunities, On The Frontline, a weekly live event, was created and launched in March as a global platform for retailers and restaurants to learn together in real time so that they can recover stronger. The material for this article is based on hundreds of conversations with executives on the frontline of navigating COVID-19 around the world.
Aggressive Response In Asia And Africa
As the pandemic rapidly emerged and tightened its grip on Asia, stores, restaurants and shopping centers closed. At the same time, home delivery rose 200% and many of the store, restaurant, retail and shopping center employees took jobs in delivery and supply chain. E-Commerce in China spiked up almost 50%.
China and many Asian countries took a centralized approach to COVID-19, and it worked. Around March 15 stores, restaurants, retail and shopping centers in Asia were beginning to open at a 30% capacity level, which quickly got up to 70% within six weeks.
Many governments also instituted contact tracing, checking people’s travel and proximity to COVID-19 outbreaks. There are now guidelines in place for contact tracing that are widely used in China, South Korea, Japan and other Asian countries.
In interviews with The Rainbow Group, a shopping center company and department store in China, they reported that they quickly upgraded their digital capacity, rebranded the company as a digital-first brand and changed their go-to-market strategy, all in 60 days. The T11 Supermarket in Beijing added staff for delivery and kept the shelves fully stocked. Chaoshifa, a state-run supermarket, taught its employees safety and empathy while dealing with shoppers under emotional stress. In China, there have been sporadic outbreaks such as the recent outbreak in Beijing. Restaurants are almost back to full capacity, as we can see from this Retail Store Tours China video from Shanghai.
One sign of the recovery is that the physical conference business is fully functional. I’m speaking at China International Retail Innovation Summit 2020 from August 11-12 in Shanghai, a large retail conference. The country is opening up. They are maintaining distances, and face masks are part of the culture in China. But for the most part, things are back to normal.
The reaction in New Zealand was to shut the country down immediately and to prohibit any foreign national in the country until 2021. In an island country of six million people, you can do that. The results are in and this worked very well. There is a turn inward in New Zealand. The citizens want to be self-reliant and will be purchasing local and taking local vacations. New Zealand had its biggest store opening in Auckland two weeks ago.
This trend is emerging as a global trend. Australia followed the example of New Zealand initially, but then opened the country and is now experiencing a second wave.
In South Korea, the situation with COVID-19 is under control and life is returning back to normal. Koreans are maintaining distances and wearing face masks. There have been recent outbreaks in Japan.
In South Africa, some early aggressive moves have helped mitigate the situation. A large percentage of the South African population has AIDS, so many have immune systems in a weakened state. As of press time, South Africa is seeing a spike of infections, but as in most parts of the world, deaths are declining. South African retailers were already under economic stress and COVID-19 has worsened the outlook. See the Retail Store Tours report from South Africa.
In The U.S. and Europe, Closures And Reopenings
The devasting impact of images from Milan and New York City, and the rapid spread of COVID-19, caused the shutdown of the economies of Europe, the U.S. and Canada.
Spain: In this country, the number of infections is increasing again in some regions. A lot of tourists are coming and spreading the virus in Spain in pubs, discos, and nightclubs. This may cause a big problem because Spanish tourism represents 15% of the country’s GDP. Please see the video report from Madrid.
Italy: The north of Italy was shut down for months with most non-essential retail closed. As of June, the country has opened all stores and restaurants.
France: In France, people are eating outside and going to the beach, as seen in this video from Paris taken in late June 2020 . One of the big tourist areas is the South of France, in particular the Riviera. Reports from this area indicate that things are back to normal: hotels are sold out and people are on the beach. They are maintaining their distance and are wearing face masks. It’s a booming summer in all parts of France, so except for the cosmetic impact, coronavirus appears to be very low-impact here.
The United Kingdom, after an extensive lockdown, opened retail widely and is seeing record sales
Germany: Germans are returning to work on a staggered schedule to help maintain social distancing. Stores and shopping centers are seeing the return of shoppers, though they are spending less time in the stores on the weekend to avoid crowds. Retail sales are setting month after month increases as more stores open and people return to shopping
COVID-19 Hits Latin America like A Tsunami
Brazil was hit very hard and its non-essential retail sector was closed. Rio de Janeiro and São Paulo were locked down in June. While the situation in Brazil has improved, in the country there is a spike in coronavirus taking place outside of the major urban areas. Carrefour in Brazil very early introduced social spacing, sanitizing and face masks. A report from Retail Store Tours Brazil highlights the situation in May.
Mexico just recently saw the beginning of stores opening. People there are maintaining social distancing, and mall operators are doing the best they can to get people incentivized to go back to shopping. While governments provide guidelines, the actual players in the industry are the ones who are leading and innovating almost in real time. Please see a video report from Retail Store Tours Mexico.
4 Steps On The Success Road Map For Managing COVID-19
In our analysis of best practices, we offer four strategies for retail success in the age of COVID-19:
- Collaborate: Discover and share global best practices. Find out what works for your business by connecting with global companies that represent best practices.
- Pandemic-Proof Your Business: Identify gaps and immediately fix your business so you are prepared for the second wave, which is already in progress.
- Focus On The Fundamentals: Mastering the eight business factors that drive success is key. The factors are safety; the human connection; employee training; store design; use of technology; brand story; a unique value proposition; and the ability to change.
- Experience Retail: We see the future of retail as “experience retail.” Shopping centers will become experience centers and retail experiences will be both in-store and in-home. A view of the future of retail is provided with interviews of the CEOs of American Dream and b8ta.