The Crisis Playbook for Retailers is Remarkably Stale

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As America\’s retailers struggle to connect with their customers during the most critical crisis in their business lifetimes, the strategies they are using are old, pandering, disingenuous and, in the end, largely ineffective.

For an industry that is supposed to be all about what\’s new and what\’s next, the American retailing sector is putting up a rather dismal front during the coronavirus crisis. To be fair, every business is suffering and trying to figure out how to stay afloat before either the customers or the government bailouts show up.\” But retail particularly seems to be groping around in the dark, largely clueless on how to stay in touch – not to mention stay in business – with its customers in the absence of any shopping normalcy.

[callout]Other industries from giant corporations to the smallest local businesses are finding ways to connect with their customers in ways that might not replace all the revenue that has been lost but will likely be remembered and valued by shoppers when we come out of this coronavirus haze.[/callout]

While more than 150 retailing companies have closed up their entire physical store fleet – and some have closed their e-commerce units as well – others remain open in varying stages of compliance with local ordinances.

Diseased Retailing

Whichever bucket they fall into, retailers seem to be adapting one of three strategies:

  1. Heartwarming messages to customers, usually centered around the \”We\’re all in this together\” theme and offering comfort in the thought that \”we\’re here for you.\” Exactly how that translates into a business model that has largely eschewed altruistic activities during much of its existence escapes most of us: See what happens when customers tell them they can\’t pay their credit card bill this month.
  2. Hey, times are tough, we realize you don\’t have a job anymore; who knows when those government checks will arrive, and your home internet is slower than an old Commodore 64. But hey, we\’ve just put the entire place on sale, 50 percent-off if you still have your eye on that little spring sandal you\’ve always wanted – even if you have nowhere to wear it.
  3. We have returned to our regular programming and here\’s the sale on those toaster ovens we scheduled back in January as a special just for you this week.

And, oh, there is a fourth route here: do nothing. It\’s amazing how many retailers have gone completely dark during all of this, paralyzed with fear, indecision or maybe just ignorance.

Missteps

To say these approaches are trivial, disingenuous, pandering and, in the end, largely ineffective is being too kind. The messaging is the face of retailing at its clichéd worst: a bunch of people you don\’t know in a big building somewhere trying to sell you stuff you probably don\’t need at all at this moment in time at prices you probably can\’t afford anyway. That\’s why the retailing industry\’s response to the crisis is so disappointing.

It doesn\’t have to be this way. Other industries from giant corporations to the smallest local businesses are finding ways to connect with their customers in ways that might not replace all the revenue that has been lost but will likely be remembered and valued by shoppers when we come out of this coronavirus haze.

How to Stay Healthy

Here are five things that other industries and business are doing that retail seems to have not gotten the memo on:

  1. We\’re hearing many reports of the role of social media for businesses use to stay in touch with their customers. How many Facebook Live sessions have there been, showing spring merchandise, talking about social programs, offering survival tips…much less messaging from the CEO of the store? With everyone stuck at home, we are glued to our phones and laptops with enough time on our hands to view pretty much everything that\’s put in front of us. Where are the retailers?
  2. Other uses of virtual media are not much better. I can\’t tell you how many emails I\’ve gotten from the retailers that have my contact info, but not a one of them has had a video, a podcast or any other form of visual communication. I do not need another 20 percent-off coupon or a glossy picture of a new hairdryer. Granted most companies didn\’t have this kind of media already prepared, but being nimble, responsive and relevant is critical. Where are the retail commercials that are empathetic and even useful?
  3. Every day we read about businesses making charitable donations, be it face masks, medical supplies or even hotel rooms for first responders and hospital staffs. How many stories have you heard coming from retailers, local or national? It\’s true most retailers don\’t have manufacturing capabilities much less six-figure budgets for this kind of thing. But there are ways to help and the goodwill that comes from it will not be forgotten anytime soon.
  4. We are now getting numbed with the numbers on layoffs from both retail and the hospitality industry. But there are almost as many reports of other sectors keeping their employees on the payroll, or at least paying for their healthcare. Yes, the retail sector has demonstrated some truly noble gestures. But there seems to be just as many reports of furloughs and staff reductions. And how long will these initiatives remain in place as the shutdown drags on? A reduced salary is better than no salary at all if that\’s what it comes to. We wonder how many retailers will do the right thing here.
  5. Finally – and it\’s hard to believe this has to even be said – retailers need to make sure they are truly in the e-commerce sector. It\’s the most obvious outcome of this crisis: The online share of market is likely to at least double when things begin to calm down, as existing e-com customers transition more of their purchases online and those that have largely stayed away from it find that they like it after all. This will be especially true in grocery, which has been the most online resistant of any major consumer product category so far. Some retailers have been building their online capabilities all along and are in good shape. Others have starved, or worse ignored, e-commerce and are paying the price now. And let\’s not talk about those retailers that don\’t have an internet operation at all (or, yes, it\’s true, had them and decided to shut them down). Grown businesspeople should be embarrassed they even have to read this.

This is now the most difficult, stressful and upsetting time probably anyone of us alive today has ever experienced. It is uncharted territory, there is no \”this-is-the-way-we-did-it-last-time\” script to consult. Innovation, imagination and ingenuity are needed. Being responsive to loyal customers is a given.

A surprising number of businesses are starting to figure it out. But most retailers are not among them. The masks they are wearing seem to be covering a lot more than just their faces.

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