Understanding the COVID-19 Impact on Retail Businesses
No doubt that the retail industry was affected by the COVID-19 pandemic. The massive shifts in priorities and concerns are indicative of what industries are still managing to get by amidst the transition to the “new normal”. On the other hand, some industries are struggling to stay afloat due to these shifts in consumer behaviour.
The retail industry is one industry that adapted to the quickly shifting landscape brought by the COVID-19 pandemic. At the same time, it also is going through brand new struggles. Consumers may not realize it, but their actions and habits towards retail businesses helped in both the boost and decline of particular areas in the industry. Here are a few insights on how the COVID-19 pandemic affected the retail industry.
A Paradigm Shift
The retail industry encompasses everything from electronics, groceries, furniture and wellness. We can see which aspects of the industry are managing to get by amidst constrained suppliers and disrupted demand. According to a report from StrategyAnd, the food, grocery and wellness industries saw increased growth during the outbreak. Another report from GrowByData reiterates this, showing a 53% and 48% growth rate within these two industries. This should certainly come as no surprise as more consumers opted to stock up on various essentials during the quarantine period.
At the same time, both reports also show declines in retail industries like apparel, the arts and electronics. As priorities shifted and services only focused on “essential items” during this pandemic, it was apparent they would struggle greatly. Additionally, many brick and mortar stores are feeling the effects of the disrupted demand due to limited reach and supply.
The Road To Recovery
So where does that leave us? As with most things, this outbreak is only temporary and will eventually subside. That means returning to usual operations under what can be called the next normal. While there are still many unknown factors, there are also emerging trends on how consumer behaviour will evolve once this period passes. To recover from it, companies can look at the following approaches.
Opportunities Arising
We mentioned last week that the COVID-19 outbreak revealed vulnerabilities for some companies that affected how they operate. We also talked about how these challenges also brought about new opportunities for them to change and develop as part of what is to come. The retail industry can assess and define what roles, approaches, and functions are more required, especially those that favour modern solutions over antiquated ones.
Leverage An Online Presence
One of the things we’ve seen during this outbreak period is the importance of contactless, online transactions. Companies that have strong online presence withstood some of the worst parts of this outbreak as a result.
Considering a digital approach for businesses that need it will help them recover from the effects of the outbreak and ensure they are prepared for future retail trends.
Increase Flexibility Through Digitalization
More than anything, a digital approach will help businesses become more flexible. As newer technologies translate into better productivity, expect to see more of it in the coming months. Before the outbreak, many businesses were already looking at this approach as part of their overall strategy for 2020 and beyond.
Integrating offshore teams with their local ones, for instance, helped them cover vital roles while also allowing them to explore new opportunities to expand. Though many strategies were put on hold due to the outbreak, allowing for more flexibility in roles and strategies will greatly help with the recovery process.
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COVID-19: Workforce Strategies for your Business
The uncertainty caused by the rapid spread of the COVID-19 virus has placed many business leaders in a difficult situation on how to build a resilient and effective business strategy that can minimise the adverse effects caused by the recent outbreak.
One major effect of the virus’ continuous spread is its impact on the economy. Despite continuously experiencing rapid growth, several major economies have slowed significantly over the past few months. In response to COVID-19, businesses are developing their contingency plans. While many of them already have existing plans to handle this outbreak, others are still uncertain if they have the right strategy in place to control long-term implications.
Businesses should plan an effective response not just for situations like the COVID-19 outbreak. These plans should be thorough and go beyond managing the current situation. They should also ensure business continuity by avoiding disruptions to their workforce.
Prioritise Workforce Safety
Measures to protect the safety of your workforce depend on the type of work and their location. Potential exposure brought by interactions with infected people and possible contamination of the work environment is one of the primary areas of concern in making sure that your workforce is safe from any elements of infection. Companies must adapt infection management strategies by implementing administrative controls and safe work practices. This includes performing routine sanitation of work areas and advising employees to take precautionary measures when interacting with others.
The U.S Center for Disease Control and Prevention (CDC) has developed interim guidance to help employers implement safety measures to prevent workforce exposure to COVID-19 that can be found here.
Improve Remote Working Capabilities
Companies must also be ready to adapt to changing conditions in the economy. Several business leaders today are looking into having their workforce operate remotely as a viable solution. They are making sure that support communications, information back-up and documentation processes are in place are vital in minimising the disruption caused by the viral outbreak. Here are a few considerations in creating an effective remote working plan:
• Review IT infrastructure processes and documentation. Many companies are leaning towards cloud-based solutions to ensure that the data they need is available and can easily be accessed remotely at any given time. While the advantages of migrating processes to cloud environments bring many benefits, potential data security issues could arise if not implemented properly.
• Network availability and connectivity are vital factors in creating an effective remote working plan. Having a thorough understanding of support systems and control conditions will protect your data from any potential risks. Company-managed devices or personally-owned computers can also access data via protected VPNs to prevent security issues that may arise.
• Have a policy in place and set expectations. A formal agreement with employees should always be documented and clear expectations should be set regarding communication and project management.
Develop an Effective Remote Working Strategy
Businesses need to prepare not only for what might happen today but must also have a clear vision on how to minimise productivity impact caused by the outbreak. Being familiar with the common issues brought by working remotely will help you create an effective strategy.
As it happens, many organisations have not recognised the issues present and are having difficulties in implementing this strategy. Challenges such as how often employees need to send their updates, what remote tools match up with their technical requirements and even monitoring and management decision-making for a team to start a project.
Review Long Term Strategies
Having a long term strategy will enable your business to recover from the impact of COVID-19. However, a work from home strategy should not be considered as a long term solution. Observe market conditions and define your business objectives once the outbreak has passed and invest in strategies to facilitate growth.
Exploring solutions such as hiring an offshore workforce through a service provider can also be utilised. Businesses with no remote working strategy in place or companies that experienced financial loss during the outbreak may consider it. Through offshoring specific back-office operations, companies can focus on business recovery and save more on labour costs at the same time.
(Read: How Cost-Effective Offshore Outsourcing Is).
At the end of the day, no one can accurately predict the economic impact of something like COVID-19. As of this writing, massive efforts are being made to understand the virus and how to properly combat it. There should be strategies in place that minimises the outbreak’s effects while allowing operations to continue within their limits. Despite the increasing challenges, it is certain that the economy will recover over time eventually. Until then, businesses should have a plan in place so they can easily recover from the aftermath of the outbreak.
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The Continued Challenges of Online Retail in 2020
When you think of the online retail industry, the growth it experienced in the last few years has become more than notable. In 2018, online sales reached $501 billion in the United States, with a predicted growth of $604 billion in the region by 2020. In countries like the Philippines, the online retail industry saw an annual growth rate of 101.4% starting in 2016, well into 2020.
These may seem like lofty numbers from the outset, but it is also indicative of where the industry is heading. With more customers using the internet for all their shopping needs, online retail continues to show both promise and more opportunities to connect with a larger audience with a global reach. At the same time however, this also means facing new, often consistent challenges for retailers to reach their desired audience, how they can stand out from the rest and leveraging the tools they have to the best of their abilities.
With 2020 on the horizon, it’s worth looking at the challenges the industry will face.
Shaping Personalized Experiences
Many online retailers will tell you that providing quality customer service is no longer enough for them to be successful. To stay ahead of the game, retailers must now provide them with unique customer experiences. It’s a level of engagement with customers – new or returning – that feels more personal, sincere and effective. A retailer’s website or online platform will always be the first introduction to their products or service. Right from the get-go, customers that visit retailers online should have robust communication options––whether through chatbots, a live spokesperson or via email.
A personalized shopping experience does not just mean a better product selection than most. It is about providing a seamless browsing and purchasing platform that customers can quickly navigate and adapt to. It’s about being able to shop from any device they have and with any platform while providing the same level of service for each.
Sebastian Siemiatkowski, CEO of Klarna, a global e-commerce payment provider says that “Experience is the new loyalty.” By continuing to deliver personalized experiences through convenience, customer loyalty is certain to follow. Strong, consistent engagement continues to be a challenge for retailers but ensuring it means more repeat visitors.
A Multichannel Presence
Today’s online shopper is likely to be signed up to at least one of the major social media platforms. While this sounds obvious on paper, it’s also something that online retailers should be aware of and how to take advantage of it. Nearly every visitor to an online retailer is signed up to either Facebook, Instagram, Twitter or a host of other social networking sites. It stands to reason, therefore, that building a presence in just one of these channels hinders an online retailer’s full potential.
According to the Harvard Business Review, 73% of online retail customers use multiple channels. Called Omnichannel customers, it was found that they spend 9% more in a store that can be found across different channels compared to just one.
A Multichannel presence and engagement must be part of any online retailer’s strategy. Not just for 2020 but in the years to come. As more consumers look for different purchasing options and platforms, it’s a good rule of thumb for retailers to strengthen their presence where they are most visible.
Mobile Matters Most
Among these channels, a retailer’s mobile presence should be the most sought after. By now, anyone in online retail should know how significant a mobile-friendly site is to their business. With more consumers are browsing the internet and purchasing products through their handheld devices, being mobile-friendly is an absolute must.
Defining a site as “mobile-friendly” means more than just having the right display on smaller screens and quick access to essential links. With more consumers making purchases online, mobile payments need to also be more secure and have a range of options. Part of the user experience in mobile is feeling safer and at ease when buying items through mobile devices.
By 2020, mobile online retail is expected to have a market of share of 70.4%. By 2021, that number will rise to 72.9%. With mobile sales on a consistent upswing, it is now imperative for online retailers to optimize and boost their mobile presences.
Looking Beyond 2020
As a global industry, online retail predicted to make more than $4 trillion by next year. This is thanks in part to advancing technology, changing consumer habits and wider purchasing options. It is believed that these trends will continue to shape the industry beyond 2020, which should serve as a great starting point for retailers wanting to rethink their strategies.
Forward-thinking online retailers see the value of unique customer experiences and the importance of maintaining a multichannel presence. Coupled with a stronger mobile presence, there’s plenty to be excited for in the industry as the times continue to change.
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The HGS Model VS. Traditional Outsourcing
In today’s interconnected world, you might have done your research on outsourcing and decided that it is something your company needed to stay competitive, only to realize that traditional outsourcing and their service providers may have operational limitations and impractical terms that would cause more harm than good in the future of your company.
Traditional outsourcing offers businesses the benefit of reducing company overhead costs by assigning work outside of their local team. HGS’s outsourcing model, on the other hand, has fundamental differences that companies need to be aware of. Differentiating the two will help determine which strategy best fits your objectives.
The Traditional Approach to Outsourcing
Outsourcing earned its reputation as providing cheap alternative labor for companies, making it a more general and much broader option. Outsourcing service providers determine the objectives that a client needs and the ensuing result will determine how much they are paid. This means clients have no control over choosing their staff, their selected roles or have a say in directly managing them. Full control over staff members is given to providers and they have the option to change who they have working for a client.
This traditional approach to outsourcing is seen as viable for companies that want results done on a determined schedule. Having an easily changeable staff would mean improving the quality of work almost immediately. However, this practice is prone to providing inaccurate metrics and less transparency for clients.
The HGS Model
HGS’s outsourcing model offers businesses full control over the staff they hire outside their local team. Unlike traditional outsourcing, clients have direct managerial control over their team and are very involved in the recruitment process. Having more control in the staff selection process or acquiring full outsourced services means training, strategy assistance, IT and HR support.
While traditional outsourcing providers let companies select and change staff members on the fly to suit a client’s objectives within their determined timeframe, HGS’s outsourcing model focus more on staff retention and cultivating the skills they bring.
So what should I use?
Traditional outsourcing will help you save money on overhead costs. However, HGS enables businesses to maintain transparency over the staff they select, maintain competitiveness in the market and explore new business models. We believe that by being more transparent in choosing the staff who will work in an outsourced capacity, companies also will determine their benefits. They can see how much training the staff will receive and how they can help develop their career pathways to become long-term members of their team. For local staff, helping manage and control such a team can also help them develop a valuable skill and this encourages more active inter-team collaborations.
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HGS moves away from the traditional outsourcing model. We let our clients decide the level of control over their offshore team and provide them with absolute transparency over their operational costs while significantly maintaining cost savings up to 60-70%. This unique approach to outsourcing will enable your company to focus more on your core business. If you wish to learn more about us, feel free to contact us today.
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How Outsourcing Can Help You Create a Branded Customer Experience
Gone are the days when businesses only competed with other companies across the road. Businesses today are now competing on a global stage as the battle to claim who is better is becoming more and more challenging. However, even though most companies are trying hard to win customer’s hearts, most of them fail to meet the expectations of their clients.
Delivering the brand promise you first introduced to your clients is crucial for you to build a loyal and engaged customer network in the future. It’s important, therefore, to discuss how offshoring can help you in delivering a branded customer experience.
Outsourcing enables you to focus on your core competencies.
The advent of technology is bringing about
Through offshoring specific back-office functions, you may redirect your time and resources in innovating your product and services. Let your audience know how your business is different from your competitors by earning a positive customer review
Improves Customer Retention
Outsourcing your customer service team is more than just helping you address different client concerns. Today,
Having a dedicated offshore team to accommodate all your customer’s concerns will enable your business to fully understand your clients. Being knowledgeable and empathetic towards their situation will also make your customers feel appreciated, driving the chance of converting them into a repeat customer that will, later on, make repeat purchases.
Adapting to a modern offshoring strategy will empower your team to be proactively involved in resolving your client’s concerns. Unlike traditional outsourcing, modern offshoring has a people over process approach strategy that can significantly benefit your business in the future.
More than just customer service
Over the years, outsourcing customer support services have proven to be an efficient way to accommodate customer concerns. However, due to the limitations of the traditional outsourcing model, many businesses look into innovations in outsourcing as a new possibility to have more control and freedom to set their own metrics to achieve a strong and branded relationship with their clients.
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HGS Offshore Staffing Solutions has a very hands-on approach in helping its clients in analyzing what roles they can effectively offshore and will collaborate with you to ensure a smooth offshoring implementation with your current operations, feel free to contact us today.
