Navigate Uncharted Waters

Thought Leadership for a Post-Covid Omnichannel World











How do retailers feel? What are their priorities? What lessons have they learned or want to learn? What help do they want most?


In April, and again in July/August of 2020, Edgewood Consulting spoke with leading Food, Drug, Mass, Club and online retailers, over three dozen VPs, Directors, Category Managers, Senior Buyers across several food, OTC, HBA and perimeter categories for their thoughts and perspectives on the COVID-19 crisis and its impact on US retail.


Retailers still have more questions than answers and invite collaborative partners, manufacturers and consultants to pitch-in with support and most importantly; with actionable insights leading to solutions. The industry needs strategies and programs to help navigate uncertainty to steer the way to retention and recovery in an increasingly chaotic, omnichannel retail environment.


These are our top 7 takeaways, showing a vision and path to thought leadership and recovery.

1. ENDURING RETAIL CHAOS

Still managing through a consumer goods/retailing landscape shaken by pandemic.


Unprecedented events resulted in more fear, chaos and disruption to citizens, economy and retail than 9/11.


“I don't recall ever not having toilet paper in all our stores. ...paper towels, water, rice, flour, etc. at same time!”


“This must be what life during wartime is like.”


Today, Out of Stocks persist, compounded with substitution frustration.

  • Out of Stocks persist as a barrier to sales, recovery and customer satisfaction
    “Even today we are running out of some products daily due to shopper fear and concern.”
  • Substitutions due to OOS, if not handled satisfactorily, exacerbate shopper frustration
    “Guests who don't want to come to our stores to shop certainly don't want to make a trip to return items we substituted.”

Sometimes orders placed online for curbside or home delivery aren’t available due to

  • Lack of variety (shopper can substitute themselves online)
  • Ordered SKU not available in store due to store-level POG differences or inventory OOS.

When substituted item is not acceptable to the consumer, this creates a frustrating experience retailers are trying to avoid.

2. NAVIGATING UNCERTAINTY

Retailers and manufacturers must take lessons from other industries to manage uncertainty.


So many unanswered questions...

  • How long will quarantine last?
  • How virulent is Covid19?
  • Will it return?
  • Will we find a cure/vaccine and when?

81 scenarios.


In sports, competitive intelligence utilizes scouting and game planning as well as reading and adjusting to opponents in games with audibles and RPOs to be nimble and achieve competitive advantage. The team that makes the best half-time adjustments usually wins.


Managing in the face of uncertainty is why military strategists engage in war-gaming to plan under multiple scenarios


“The enemy has a voice”


“Not sure how long this is going to last... I would guess it will last likely end of May or June. Even after that, it will be well into next year for things to be somewhat normal.”


“I don't think it will ever return to pre-crisis normal... Not knowing is the greatest fear.”


Retailers are not shying away from uncertainty. They recognize the need to assess, learn and find ways to make plans, contingency plans and decisions in the face of uncertainty.


IMPLICATION: collaborative partners known to provide thought leadership will be expected to

contribute

3. ONGOING IMPACT

Initial and ongoing impact to categories, retailers and shoppers varies tremendously.


Initial Impact - During March, 2020, most categories surged in sales with panic buying.


Ongoing Impact - Most consumer goods categories are still up as Americans stay close to home but results vary from category to category. Edgewood Consulting is working with categories and brands that 6 months later are:

  • trending up +20% vs. year ago
  • up moderately vs. YA
  • down -10% or more

Retailers growing frustrated with lack of insights to help deal with virus variations and governmental guidelines/regulations by state.


“We don't know what this means... Every state - different requirements. We are reacting to changes... isn't the way to run this business.”


“Every state has different rules/guidelines etc. so... it's difficult....”


Edgewood’s analysis for clients reveals:

  • Cases vary by state – highest with 15X MORE covid cases per capita than least affected
  • Virus status by state can have statistically significant correlation with category sales growth vs YA by state/retailer divisions. Statistical significance is stronger in some categories than others
  • Virus status can also affect $ growth by omnichannel retail shopping method (B&M, C&C, Ecomm)

IMPLICATION: For categories affected by COVID, cluster stores by high, med, low COVID status.


Covid incidence & growth from Johns Hopkins Coronavirus Resource Center Thru mid-August, 2020

4. OMNICHANNEL ACCELERATION

Brick and mortar shopping still rules the roost but omnichannel retailing is here to stay


“If asked 5 years ago, I would have said brick and mortar was our key to store loyalty and banner equity... but with current climate and even without it, I think all shopping methods are valuable. COVID-19 just sped up the process.”


“After this ordeal... click and collect will be a large part of our everyday business”


A recent study by FMI reports that 78% of shoppers have made changes in where and how they shop as a result of the Covid-19 pandemic.


Shoppers have made a dramatic and rapid shift to buying via C&C and Ecomm/home delivery for their groceries and consumer goods.


Percent and absolute growth in C&C and Ecomm shopping is driven by both millennials and boomers + seniors generations.


Retailers are intrigued by the promise of new Omnichannel Solutions for retail marketing, assortment and merchandising and want to be on the leading edge.


“We would like to be the leader in this...”


“We‘d really love a partnership to get solution.”


Scroll down to our Omnichannel Toolbox section to learn more or contact Edgewood Consulting to talk about our suite of Omnichannel solutions.


Source: Edgewood projection of Burke survey July 2020 applied US census data and average basket sizes from several sources: FMI, Progressive Grocer, Brick Meets Clicks/Mercator

5. THOUGHT LEADERSHIP

Retailers welcome actionable insights, thought leadership and omnichannel solutions... still waiting.


“If ever there’s a time we wanted thought leadership.... this is it.”


Edgewood Consulting recommends tailoring strategy uniquely by phase from crisis to recovery and ultimately, new (non) normal. This will be more effective because priorities and tactical effectiveness change with each phase.


Retailers want insights to help recover and retain shoppers and sales.

  • Recover – strategies to recover lost trips and traffic
  • Retain – identify, keep and loyalize shoppers they may have gained

“What works best? Should issues be handled by us only? Or have third party handle? What can we do?”


“Regarding recovery... actually I don't have the slightest idea at this time.”


“Retention, don't know what strategies & tactics can be used... we would like to get them.”


Retailers caution thought leaders to be constructive, insightful and value added.


DO

Retailers suggest what they want most

  • More than facts and data... what to do about it?
  • Omnichannel insights & strategy for recovery, retention
  • Programs, community support or funding to allay fears, lure back / retain shoppers
  • Information and education on employee and shopper safety

DON'T

Retailers advise what they don’t need or want

  • Pry with questions retailers can’t answer
  • Make promises you can’t deliver
  • Ideas to capitalize / profit from crisis
  • Describe opportunities without actionable insights or support

6. OPPORTUNITY

Where do we go from here?


Manufacturers working with retail partners for successful retention and recovery need to provide insights and innovation in collaborative partnerships to develop:

  • Omnichannel solutions and best practices
  • Strategies tailored by recovery phase, category and retailer

“We are completely open to any support and any strategies, insight and workable initiatives.”


“I don’t even know what my unmet needs are... I know we’re going to learn a lot and we’re looking forward to it from suppliers, brokers, consultants.”


Retailers must also plan/ prepare for next potential disasters.


Never Let a Good Crisis Go To Waste (Sir Winston Churchill)


In earliest days of the crisis, while most manufacturers were reeling, some leading manufacturers responded with exceptional support to retailers above & beyond the call.


“Extended payment terms, dating, allowance of returns... Helps us to go back to previous levels without fear of overstocking”


“Provided free goods to food banks, our warehouse staff, other groups - health care workers and first responders on our behalf”


Today, many of these leading manufacturers are taking this opportunity to grow market share by promoting aggressively & being able to supply increased demand.


“Some brands are pulling back support and still having trouble with product supply, while the biggest brand manufacturers are spending more aggressively to build their brands with consumer coupons and increased trade promotion”


IMPLICATION: Manufacturers and Brands that don’t step up their support in kind do so at their own risk.


Source: Sales results from company financial reports 2Q 2020.

7. COLLABORATE

Many hands make light work. As we dig out together, why not answer the call to help those most in need?


As we collaborate to develop omnichannel solutions, let’s also answer the call to support those most in need. The Covid-19 pandemic and related economic hardships affect low income and vulnerable populations hardest.


What can our industry do to help balance the scales of economic justice? Let’s work together and via trade associations to build upon existing programs, initiatives and offer assistance with services, volunteering and

support for:

  • Health and Wellness, Healthcare services
  • SNAP programs, promotions and nutrition support
  • Assistance to prisons, senior living, homeless shelters, schools, food banks, etc.

OPPORTUNITY FOR THOUGHT LEADERS TO COLLABORATE


There’s a refreshing level of honesty about initial crisis and confusion and the scale of the challenges that retailers and manufacturers have before them.


“Recovery will be a tall order... need help from every part of the industry. We can’t do this alone.”


In this spirit, retailers are receptive to a collaborative, team approach to tackle problems with solutions.


“We hope to hear from manufacturers in next 6 plus months. These types of leadership and insights (strategy to recover trips & traffic) can be very helpful.”


“This thought leadership and collaboration too will be extremely valuable.”


Source: Department of the Treasury, Bureau of the Fiscal Service, statements from Feb. 2005 through Sept. 2020. PGPF.org.

Thought Leadership and Retail

Strategy with Edgewood Consulting Group

Edgewood Consulting Group helps manufacturers and retailers collaborate effectively to generate win-win results. Edgewood supports these collaborations with the insights, innovation and implementation support that builds sales, equity and ROI.


Learn more about our revolutionary approaches to omnichannel insights, innovation and implementation:

  • Built for CPG – insights on your shoppers, your brands, and how they shop
  • Turnkey service – innovation, strategy, actionable programs you can use right away

To learn more about how Edgewood can help, contact us at 973-644-9788.

This is what we would like to see...  We’d like manufacturers to come to us with strategies and programs developed the way Edgewood outlined.  We’re looking forward to that.”


Director from Top 5 Retailer

Omnichannel Solutions Toolbox

Develop a path to succeed in today’s post-covid omnichannel world with Edgewood Consulting Group’s insights and implementation solutions for brands and their retail partners. 

  • How to recover lost shoppers, trips and sales?
  • How to retain gains made and loyalize new shopper base?
  • Where to focus and prioritize first?

Let us tailor actionable insights, strategies and implementation to make the most of your brick and mortar, click and collect and online/home delivery shoppers and sales. 

  • Shopper Decision Hierarchy for Omnichannel Retailing

    Can your category market structure reflect the typical shopping decision process when shopping today is anything but typical?


    A custom SDH approach should be the preferred option, not only during the pandemic, but for up to 12 months after we return to “normal.” This is because traditional panel-based market structures rely on past transactions which have been noisy and compromised since the pandemic began by pantry-loading, out-of-stocks, constantly changing assortments and exponential sales growth or decline depending on the category.


    Our custom SDH method uncouples the shopper’s purchase decision process from the channel to eliminate data bias related to availability. This makes our custom research a more forward-looking, objective and actionable way to understand shoppers’ decision hierarchy in today’s omnichannel world.

  • COIL™ 2.0  (Consumer Omnichannel Innovation Lab)

    Optimize your omnichannel retailing and marketing with COIL.

    • WHAT are the key success factors that attract, retain and convert shoppers online (ecomm/delivery or click & collect)?
    • HOW do retailers, categories and brands measure up by channel on key conversion drivers and barriers to conversion?
    • WHERE to prioritize and address first? How?


    What people say and what people do… is very different on the web! 


    COIL – the consumer omnichannel innovation lab integrates state of the art research and technology with proven expertise for more actionable solutions, faster development and better results.

  • Omnichannel AssortmentEdge®

    AssortmentEdge® is more than just variety duplication software.


    Now AssortmentEdge® incorporates omnichannel shopper insights and data to fuel analytics that enhance assortment priorities, inventory and other tactics tailored uniquely for omnichannel consumers who shop:

    • Brick and mortar
    • Click & collect
    • Online/home delivery

    Let’s discuss how our turnkey strategic solution can drive innovation, performance and ROI for your brand, category and retail partners.

  • Omnichannel RMO (Retail Marketing Mix Optimization)

    Optimize your retail marketing mix for your brand, your category and your retail partners.


    RMO™ leverages a broad array of insights, advanced analytics and proven strategies to maximize results and ROI at retail.  Now incorporate omnichannel insights and best practices to help drive your:

    • Strategic Collaboration
    • Omnichannel Strategy
    • Trade Promotion Optimization
    • Assortment & inventory
    • Shelf /Aisle Shopability/Visibility
    • Shopper Targeting
    • Shopper Education

  • Omnichannel PrecisionEdge

    Edgewood Consulting combines 'big data' with advanced analytics to guide precision-targeted implementation at store level for factors that affect your category and brand:

    • Covid-19/Flu Season
    • Weather
    • Allergy Season
    • SNAP programs to economically challenged consumers

    PrecisionEdge™ drives a whole new level of sales growth, ROI and competitive advantage

    • minimize OOS and overstocks
    • optimize display timing, location, size and mix
    • find and prioritize under-performing stores with most growth opportunity
    • guide loyalty card programs
    • allocate media spend, shopper education and shopper marketing investment

Throughout Edgewood’s presentation the needs and concerns of retailers are well documented. Now, we’d love to hear strategies, tactics and solutions to address these issues.


Leading Drug Retailer