The Theatro Blog

Seize the Covid-19 Opportunity to Reopen Stores Differently

The world looks very different than it did a few weeks ago, thanks to Covid-19. Few  businesses have been left untouched in some way by the disruptions it has had on professional and personal lives. Retail businesses find themselves in a particularly unique position. Some remain open, providing much needed “essential” products and services, while others have been forced to close until further notice as we isolate in an attempt to “flatten the curve” of infections. Devastating though they are, the closures give those retailers a once-in-a-lifetime opportunity to learn from their peers who are still open in order to retool store operations for the better so they can operate more effectively, efficiently, and safely upon reopen.

As we look forward to the day they return, one thing is for sure. They will reopen into a very different world than the one they closed in. Restart readiness will demand not only that they adapt to new requirements and expectations. Their success going forward will largely depend on their ability to improve pre-existing processes and deliver best practice execution of the processes that a safety-conscious public will expect.

We’re learning more about this new normal every day, as we watch businesses that are still open adapt in real time to new requirements using trial and error, something that would have been unthinkable just a month ago.  Those sitting on the sidelines watching the drama unfold have the opportunity to bypass many of the hard lessons learned by those in the middle of the chaos.  As governments relax quarantine restrictions, every passing day paints a clearer picture of what to expect in the changed world that awaits us, and retailers need to be ready for the day when it arrives.

The Journey Starts with Covid-19 but Will End with Reimaging Store Operations

From a high level, we expect acclimation to pass through three phases. We’re currently in Phase I, when businesses are reacting on the fly to address risks and fill gaps fast. Those businesses that are currently closed will likely come back online either at the end of Phase I or the beginning of Phase II, when businesses are refining those fast fixes into standard operating procedures by adding process, automation, and systems to drive sustainability. Phase II will see a shift from virus-driven action to a renewed focus on profitability and operational improvements that can enable them to do more with less. In the final Phase, what McKinsey & Company calls the “Next Normal” will be established, when businesses will have regained some form of stability in their operations. Experts suggest it will take at least 8 months to reach the Next Normal.

 

 

Though the time frame feels long, the good news is that it allows time to create a vision and achieve it over time in phases. But the key question is, where to begin? As we think about preparing to reopen stores, it’s clear that the crisis has opened up four fault lines enterprise retailers will have to address in their planning:

  • New customer experience requirements
  • Demand for culture and people leadership
  • Pressure to operationalize new SOPs fast
  • Focus on labor productivity

New Customer Experience Requirements Are Changing the Game

Consumers will be jittery coming out of this unprecedented period. Retailers will have to meet them where they are if they expect to keep them as customers. During the closures, fear drove changes in shopping behavior and turned them into habits. Key trends that were just taking off before will become mainstream. Consumers forgive clunky execution during the restrictions, but they won’t be as easy to overlook flaws once those limitations are removed.

The most obvious example of this are the new “last mile” delivery mechanisms like contactless curbside, ship-from-store, and home delivery. Will they last? Experts suggest so, in which case retailers will quickly need to deploy processes and systems to ensure these new service delivery models can be maintained profitably. New engagement models that support social distancing and personalization opportunities that streamline the path to purchase are also likely to emerge. Video shopping and private shopping appointments are two examples that seem to be gaining momentum.

Demand for Culture and People Leadership Has Never Been Greater

The stress and uncertainty of this unprecedented time has created a new opportunity for strong leadership and the comfort of community. By all accounts, employees are distracted, scared, and overwhelmed. They’ll need reassurance and renewed confidence to be able to serve customers well under the stress of this new environment, particularly as they acclimate.

Keep in mind this is also the moment your biggest and most strategic asset (your people!) can really shine. After so many weeks of isolation, customers will need a friendly face and someone to talk to. Your associates can only offer that helping hand if they feel supported and confident themselves. That leads us to four critical components to any restart plan that will prepare your associates or their moment:

  • Give your employees what they need to feel safe at work
  • Give them the information they need and a way to get quick answers to questions
  • Give them clear and frequent direction from leadership
  • Give them positive reinforcement

Unparalleled Pressure to Operationalize New SOPs Fast

It goes without saying that businesses will have new standard operating procedures to define, train and monitor as they reopen – or rather, in order to reopen. In China, restaurants have been required to prove that they have taken precautions to reduce the risk of infection before being allowed to reopen. In North America, regulations have yet to be discussed but consumer confidence and social responsibility will mandate many new practices. Sanitation and social distancing accommodations will be at the top of this list. Defining these new standards and how to execute on them is well underway in most organizations.

But launching new processes is only step one. Evolving those processes will be as much if not an even greater challenge.  Not only is the pandemic situation likely be fluid for some time, objectives and priorities will shift as we adjust from the reaction phase into the Next Normal. Approaches that worked well enough to get us through Phase I will need to be optimized for experience and sustainability with time.

Focus on Labor Productivity Only Expected to Increase

Reopening stores after an extended closure is a task in and of itself, but post-Covid there will be a new season of merchandise to make room for and new customer needs to accommodate, all in the face of significant gaps-to-plan. But the real challenge will come from accomplishing all these tasks with what’s expected to be fewer team members and a high percentage of new associates to train. Two questions become paramount in this context: how to do more with less, and how to optimize training to support that goal better and faster. The pressure to solve for these two challenges may be the most persistent ramifications of the Covid-19 crisis.

Today, the horizon seems filled with burning fires that must be put out. By the time the Next Normal comes into real focus, those fires will likely be well under control and our attention turned back to effective and efficient execution – albeit with new limitations and a greatly amplified sense of urgency. Covid-19 is a crisis of which we’ve never seen the like. Returning to some semblance of normalcy is a process none of us have experienced before, but that poses a powerful opportunity to refine store operations while we accommodate new requirements.

Drafting the new playbook will take time and iteration, but it’s a process that should start now if it hasn’t already. We at Theatro have begun this process with our own customers so frontline teams will be armed with the resources they need to restart strong.  Please reach out to us at info@theatro.com if we can help your team reopen as well.

 

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