Innovate to survive: Will COVID-19 awaken retail?

Necessity spurs quick action and innovation. US retailers’ efforts to combat the adverse effects of COVID-19 will set them apart as we adapt to the new realities of commerce.
15 May 2020
Innovate to survive
Ellie Pinto, Kantar

Analyst, US

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In April, Publix exemplified quick action and innovation when it rolled out contactless payment across its stores, including its new GreenWise Market banner. The system was already in development to help streamline checkout, but the emergence of the coronavirus pandemic shuffled business plans when extra safety measures were needed immediately.

While grocers and other stores have installed Plexiglas barriers and tape to guide shoppers safely through the store, implementing new technology ahead of schedule demonstrates a higher level of quick action since it involves coordinating moving parts more complex than barriers or tape. Publix’s ability to marshal its resources to implement new checkout technology early shows how necessity is a catalyst to development. The retailer has positioned itself to compete through the pandemic and beyond by creating a more efficient way to engage shoppers now and by practising quick innovation to continue engaging shoppers in the future.

At the beginning of the outbreak, a manufacturing slowdown in China forced US companies into an unusual, but necessary, ultimatum: adapt or fail. Companies that adapt and find a way to produce will survive and later thrive, though not without stretching resources and personnel. Those that flounder and fail to flex will fall. The choice symbolises basic human existence and the battle humans face against the virus itself: fight and win, or crumble and fade away.

Adaptation as instinct

This concept has been true since the beginning of humanity. Fire, the wheel, and other inventions arose from a basic unfulfilled need. Humans who already have effective ways of cooking and getting around have no urgency to find new ways of doing so. Like ancient animals that have remained the same because natural selection does not require them to change their ways, companies that survive comfortably by making their designated products in a set and effective way have little need to find new methods or make new products.

However, a predator or change in habitat can force a species to evolve in order to survive. An event like a pandemic has the same effect on companies. It disrupts their comfortable default operations and sparks an urgency to change. Like bodies that learn to respond in a crisis, people and companies adapt when necessary. Uncertainty and hardship can catch companies unprepared, but those that use resources wisely to recognise a need and quickly adapt emerge stronger and more prepared for the future.

Pivoting production

Part of innovating and adapting to circumstantial demand includes recognising the occasional need to expand production beyond traditional inventory. Amid a vast shortage of personal protective equipment (PPE) and other supplies, some companies have rededicated supply chains to make desperately needed items, including hand sanitiser, face masks, and clothing for hospital workers.

Small distilleries have used their size to their advantage, moving swiftly and efficiently to adapt manufacturing chains to create hand sanitiser practically overnight. Desert Door Distillery in Driftwood, Texas, was among the first wave of distilleries to make a blend of alcohol. Black Dirt Distillery in Orange County, N.Y., and Privateer Rum in Ipswich, Mass., have risen to the challenge as well. In response to overwhelming requests for donations from medical and first responder groups, distilleries quickly determined how to source products they do not normally stock to support production and their communities.

Sports equipment companies have also seen the need for PPE as an opportunity to help. Bauer, which makes hockey equipment, has reallocated supplies and efforts to create medical face shields for doctors and nurses. Major League Baseball jersey manufacturer Fanatics has repurposed materials intended for Yankees and Phillies jerseys to make hospital gowns and face masks for emergency management workers and hospital employees.

Though distilleries and sports equipment companies may seem far removed from products that medical and essential workers need to fight a global virus, they exemplify how seemingly unrelated companies have room to innovate in a new space.

The reward for adapting

COVID-19, while tragic, has presented companies with a once-in-a-lifetime opportunity to create and adapt. With many consumer goods in high demand, companies must flex and find ways to produce more products more quickly and with the same or smaller workforces.

When the coronavirus passes and markets start returning to normal or even to a “new normal,” which companies will revert to comfort and routine? Which will continue to flex their newfound sense of urgency to innovate? Companies that have ingrained in themselves the skill of recognizing a basic need and finding a way to fill it will emerge armed for continued growth and success. They will surge past the competition. Companies that revert to complacency and accept the comfortable and routine will fall behind.

Post-COVID-19, some companies will revert and others will persist. That’s when the nimble will shine. Who will they be? We’ve pulled together innovative examples from the Convenience and Food Service space to help you kickstart your efforts:

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