Unprecedented disruption due to COVID-19 pandemic has hugely affected Retail and FMCG sectors. Countries went for complete lockdowns with only essential retailers, grocery stores and pharmacies were functional. There is a significant increase of customers shopping online for the first time and retailers embracing eCommerce. In a recent research carried out by IMR/University of Nicosia, 38 percent made online purchases related to products from supermarkets. Grocery retailers have expanded their services to provide pick-up and delivery channels.
Lessons from China [KPMG analysis]
Evidence suggests the impact and nature of a product during the peak of outbreak will determine its future performance. Certain products exhibited higher growth compared to 2019 growth rate. Apart from sanitizer and disinfectants, home cooking and in-home meals products seen increased sales. There are products that significantly experienced drop during the peak and started to recover, these include biscuits and nutritional supplements. Products like skincare, make-up, alcoholic beverages seems to have a decline rate during the peak.
Key areas for effective recovery post lockdown
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Protecting employees and customers
A plan to ensure the safety of employees and customers while maintaining business as usual. -
Securing business continuity and customer relationship
Retailers are faced with high demand for certain products. They are also have to balance the increase in online delivery channel. Must define a plan to understand the customerâs urgent needs and use those insights to address the needs and define new ways to serve customers in short and medium terms. Need to maintain trust in brand, products and services. -
Managing demand and supply fluctuations
It is important to actively predict and manage demand proactively. They should offer short payment terms to keep their suppliers afloat, finding alternative sources of supply and safeguarding in store replacement. The recovery of each brand depends on consumersâ needs, how the suppliers understand and forecast future demands. As budgets for media investment will be limited, it is important to identify who to reach and how to reach them in the most cost-effective way. -
Transforming business model
It is time to rethink how to make the business model more efficient and less exposed to shocks. They could transform the office into a remote working team. Deploy e-commerce and create a model that serves the customer better. Embrace digital transformation not just in stores but also in areas such as warehousing, transportation and merchandising. -
Exploring new opportunities for growth
Possibilities of new growth avenues like collaborating with a potential supplier company to keep them afloat. Forward integration with Delivery Company to reduce burden on managing demands.