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Rebuilding retail after the pandemic

To help retailers understand the new normal, Zebra Technologies has identified the pandemic-related industry changes as the 3 Waves. This outlines the recovery process of most retailers, spanning the immediate changes that ensured stability in the early days and the longer-term, strategic changes that will become institutionalized.

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Photo by Kaique Rocha from Unsplash.com

The pandemic has caused a noticeable change in consumer behavior, which in turn necessitates a corresponding change in every retailer’s business processes. As the Philippines reopens its economy, businesses are reassessing their strategies and recovery plans differently. In fact, about 45% of business owners are hesitant to resume their operations, according to a survey by the World Bank, National Economic and Development Authority and Department of Finance.

Retailers are used to reacting to evolving market demands, and they understand that the pandemic’s impact on the industry is likely to be long-lasting, even after a vaccine is found. To help retailers understand the new normal, Zebra Technologies has identified the pandemic-related industry changes as the 3 Waves. This outlines the recovery process of most retailers, spanning the immediate changes that ensured stability in the early days and the longer-term, strategic changes that will become institutionalized.

WAVE 1: MAINTAINING BUSINESS STABILITY

Wave 1 started when global economies began to shut down in early March 2020, and many retailers were forced to stop operations in response to quarantine protocols. Many had to cut back on costs to stay afloat. Those that kept their operations had to optimize resources and labor hours while ensuring employee health and safety.

When panic buying started to strain supply chains in the early months of the lockdown, retailers realized that conventional demand planning models no longer worked. They had to find new ways to meet consumer needs without compromising their employees’ safety or incurring greater costs.

Retailers immediately started investing in technologies that could give them a crystal-clear picture of what was happening within their four walls and their supply chains. Many retailers increased their use of mobile computing and scanning solutions, helping boost their capacity to replenish orders, speed up end-to-end fulfillment and accommodate customers’ basic needs and wants both in-store and online.

Based on the collective feedback from retail leaders and store associates, the biggest lessons during Wave 1 were the importance of:

1.  Real-time operational visibility

Retailers should invest in technologies that improve their capacity and speed in managing their inventory to cope with the demand, while providing them with real-time visibility across the supply chain at the same time.

According to Zebra’s APAC Shopper Study, 88% of retailers agree that maintaining real-time inventory visibility is a significant challenge. And up to 85% say their companies need better inventory management tools to ensure accuracy.

Having access to data on operations in real time will help retailers to address consumer needs immediately and avoid either under- or over-inventory situations. This enables retailers to ensure operational efficiency and business resilience even amid pandemic constraints.

2. Distributing actionable intelligence to store associates and supply chain partners

In any given day, especially during the pandemic, store employees and supply chain partners face challenges in assisting customers. Retailers must provide them with the right tools to attend to customers’ needs by swiftly locating inventory within their stores and knowing how much inventory is left so they can get it replenished. This prevents loss of sales and translates to greater customer satisfaction thereby improving business outcomes.

This is where prescriptive analytics, intelligent automation, wearables and handheld mobile computers become exceptionally handy.

3. Overcommunicating with customers, especially when you aren’t going to be able to deliver what they want on time or at all

When stay-at-home orders were issued, many consumers had to stop going to physical stores and relied solely on online shopping for their groceries and other essentials. Being unable to see store shelves, consumers had to rely on real-time stock inventory information presented on the website or mobile app to know whether an item was available.

According to a study conducted by Nielsen during the Enhanced Community Quarantine, 27% of Filipino consumers switched brands in certain categories because the products from their preferred brands were out of stock. In such cases, the lack of communication about what is available and the inability to provide alternatives to consumers created frustration among consumers. This compromised their trust in the retailers’ capability to meet their demands and needs.

4. Prioritizing worker and customer safety above all else and compensating associates for the risks they’re taking on the front lines

Some retailers provided financial aid to their employees to help them during the pandemic. But beyond the monetary assistance, store associates are more inclined to come to work and give their 100% when they feel they are being taken care of and are physically protected. Employees expected and appreciated efforts by retailers to maintain strict social distancing and sanitization measures, especially during the early months of the quarantine when paranoia about the virus was so high. These measures included frequent disinfection of shared scanning and mobile devices and the investment in “personal” protective wearables. 

WAVE 2: A NEW RETAIL NORMAL

As operations started to stabilize, essential retailers were able to focus on institutionalizing new ways to engage customers with online and in-store experiences. Retail leaders made efforts to get people in and out of stores as quickly as possible. They ensured physical distancing through several measures, such as limiting the number of people allowed in the store at any given time, setting up directional flow lines and installing dividers to prevent contact. Temperature checks, regular disinfection and other cleaning regiments helped provide a safe environment for both shoppers and store associates. 

Even when the pandemic quiets down, retailers will still take precautions to maximize the health and safety of both customers and employees in stores, corporate offices and warehouses. Services such as “buy online, pick up in store” (BOPIS) with curbside pickup options, contactless purchases and increased integration between digital and physical experiences will become the standard means of engaging with customers.

WAVE 3: LONG-TERM TRANSFORMATION

At some level, the long-term transformation in Wave 3 should occur simultaneously with Wave 2. The pandemic is accelerating retail digitization by several years. As retailers prioritize new technologies and solutions to ride the tide of increased online shopping, such new approaches will be part of efforts to ensure retail business viability moving forward.

Retailers have no choice but to accelerate planned efforts to increase product sourcing diversity, leverage intelligent automation and scale e-commerce fulfillment capabilities. As such, businesses should consider prioritizing increased product sourcing diversity, intelligent automation and optimizing last-mile delivery to achieve greater resiliency and backend efficiency.

When demand for certain non-discretionary products spiked as news around COVID-19 broke, Philippines’ Department of Trade and Industry imposed limitations on the purchase of basic commodities to prevent supply shortage. Many retailers, however, have not yet diversified their product sources to a point where backend shortages remain “invisible.”  This reinforces the need for product sourcing diversification to ensure enough supply. 

The combination of artificial intelligence (AI) and robotics can bring data-driven approaches to supplier quality, merchandising, distribution, and logistics and fulfillment, giving retail leaders the insights necessary to maximize value capture. Instead of reacting to external forces and rapid changes in consumer behavior, intelligent automation creates opportunities to operate more proactively.

As the pandemic emphasizes the need to improve e-commerce and logistics capabilities, retailers are realizing the need to enable and optimize last-mile delivery to satisfy customer expectations, reduce marginal costs and improve overall efficiencies. To optimize last-mile delivery, retailers can provide flexible delivery options based on delivery method and location, create a collaborative network with suppliers to maximize visibility on the backend, leverage brick-and-mortar stores as fulfillment centers and use technology to maximize the value of delivery routes. All these will help ensure a safer and more efficient business flow that minimizes the impact of the pandemic while positioning the business for future success.

The pandemic has stressed the need for retailers to reassess their business processes and study the importance of innovation. Understanding the industry and choosing the right combination of solutions will assure business continuity for retailers, and service reliability for their customers. Retailers that can strengthen their digital capabilities and ensure a better online shopping experience will gain end-user trust and encourage more online transactions. This translates to greater business success not just during the pandemic-recovery phase but also in the future.

Strategies

4 Tips on doing business in a digital world

Doing business in a digital world requires end-to-end approach.

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By Lesley Salmon
Kellogg Company SVP, Global Chief Information Officer

It’s no secret that technological advances will continue to improve consumers’ experiences. While CIOs will always be responsible for keeping their organizations safe, secure, and sustained, successful businesses must harness the power of new digital solutions to drive better business decisions, and outcomes and ultimately grow the business.   

Depending on who you ask, doing business in a digital world can mean different things. To some, it means adopting consumer-facing digital offerings like e-commerce, mobile apps, and digital marketing; to others, it means digitizing operations and processes internally. To continuously evolve and adapt to forever-changing consumer expectations, CIOs must take an end-to-end approach to digital – focusing on four areas:  People, Process, Technology, and Data & Analytics. If you do this, you will realize the value it can add to your organization. 

1. Focus on your people.

For me, it’s all about people – having the right people delivering through great partnerships with the key stakeholders across the business, understanding their needs, pre-empting, and then responding to them. A recent Gartner poll stated that talent is a top challenge for CIOs in 2022. To attract and retain the right people, we need to satisfy their hunger to experiment, fail fast and learn.

When our Kellogg IT team told us they didn’t see enough growth opportunities, we knew we needed to take a new approach to learning and development. We built our Year of Development Always (YODA) initiative with a vision to cultivate our childhood curiosity and an eagerness to learn. We created several tracks in the program for technical training, career strategies, and shadow programs to help our colleagues learn and explore new facets of the overall IT function.  The program has seen great results, team engagement is at an all-time high.

2. Don’t frown on the word process; embrace it.

When we think of ‘process,’ many people immediately imagine a rigid and inflexible approach. I challenge this perspective – we sometimes have to slow down, to speed up. Processes can be flexible while still providing structure for business growth – they’re what drive progress every day!

Part of doing this is closely linked with People because Process can be about engaging business colleagues at the right time with the right solutions. Being a trusted partner means bringing the company along the digital journey with us, which is essential for our future success.

3. Integrate technologies that delight consumers and drive better business outcomes.

We know that building scale and leveraging our platforms will deliver value for the business, but what about delighting our consumers?

In 2020 a team member attended an event and learned that more than 2 million people in the UK live with sight loss and cannot simply read the information on packaging. It sparked an idea to add NaviLens technology to our packaging, allowing visually impaired people to access all of the information on our packaging via their smartphones – either by having it played aloud or by using accessibility tools.

We partnered with our Packaging and Design team and launched a successful pilot making Kellogg the first ‘food’ company in the world to include NaviLens technology on our packaging.

Our company’s purpose is for everyone to have a place at the table, and we want all consumers to be able to access important information about the foods we sell.

4. Making better business decisions with data and insights.

Data has always been available but never in the abundance that it is today. While CIOs may not manage every corporate data program, the IT function is critical in ensuring commercial and functional teams understand what data is available and use it to fuel insight-driven actions.  

At Kellogg, we’ve re-imagined our data & analytics approach and focus on data ownership, quality, ethics, and governance. This is the recipe for making better business decisions.  

The real magic happens when you join forces with other business areas, like Marketing, to combine our insights and analytics capabilities with innovation, e-commerce, and more. This has allowed us to create a rich omnichannel experience that ensures we have the right foods, attractive pricing, and tailoring the right message to our diverse consumers.  

Freeing data from silos is critical to meet consumer needs and preparing for the future consumer experience. We recently commissioned research that looks at what consumer shopping trends we can anticipate by 2035; we are making investments to prepare for those consumer expectations.

For example, in 2035 and beyond, the retail environment will fit the needs of each shopper. Shoppers will see the personalization of products and shopper journeys as a baseline expectation to fit their unique attitudes and needs. Traditional online and offline environments will become increasingly integrated, supplemented with AI and innovative technologies to offer data-driven capabilities. 

Final thought…

Digital is the driving force behind any business, and IT is in the driver’s seat. Commercial business leaders can and should partner with their IT teams to help prepare for digital shifts to create more personalized experiences that create brand affinity.

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Strategies

Tips on how to avoid a debt trap

Here are some practical tips to help better manage, stabilize, and avoid a debt trap.

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According to CNBC, an average American has over $90,000 in debt. Accumulating debt is not only a financial burden – it can be mentally and emotionally taxing as a borrower finds themselves trapped in debt because the high-interest charges keep piling on. 

Steve Sexton, financial consultant and CEO of Sexton Advisory Group, shares some practical tips to help better manage, stabilize, and avoid a debt trap.

  • An emergency fund is essential. “Aside from budgeting and living within your means, having an emergency fund for unexpected expenses is one of the best ways to avoid going into debt in the first place,” says Sexton. “Plan to have at least 6 months’ worth of expenses saved in this fund, which can help you financially weather a temporary crisis and keep things running until the situation stabilizes.”
  • Consolidate various loans under a single one. “Taking on multiple loans at different interest rates beyond one’s capacity to repay can be resolved by taking on a single loan,” adds Sexton. “By doing so, the borrower can simplify their finances and no longer need to worry about remembering multiple repayment dates. This step can help the borrower better emerge from a debt trap.”
  • Leverage cash flow to prepay high-cost debt. “An important factor to streamline your repayments and avoid debt traps is to use a temporary inflow of funds to prepay debt with high-interest rates,” says Sexton. “These include annual bonuses or capital gains on share sales which can be used to prepay personal, credit card, or auto loans. When loans with high-interest rates are repaid, you are effectively saving the extra amount that would otherwise have gone towards the higher interest charges.”

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Strategies

3 Tips to include in a business crisis plan

To better protect businesses and their people, emergency preparedness experts from Rentokil North America and their family brands, Steritech and Ambius, shared three elements to incorporate into a weather-related hazard mitigation plan.

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Across the world, natural disaster events are on the rise. Climbing temperatures pave the way for an increase in droughts, wildfires, floods and other weather emergencies. In 2021, United States natural disasters created more than $145 billion in economic damage, three times the amount originally estimated by the National Oceanic and Atmospheric Administration.

The Federal Emergency Management Association estimates that about 25 percent of businesses do not reopen after experiencing a weather-related disaster. Without a plan in place, one weather emergency leading to a power outage, flood or property damage may be all it takes to force a company or business to close its doors permanently.

To better protect businesses and their people, emergency preparedness experts from Rentokil North America and their family brands, Steritech and Ambius, shared three elements to incorporate into a weather-related hazard mitigation plan. Business owners and operators can use these tips to establish a plan and better protect their employees, customers and business.

Tip One: Prepare for Power Outages

Power outages can happen anytime, anywhere. A nearby accident can take out power lines resulting in a local outage. Heavy rain, high winds or extreme temperatures from severe storms can also lead to a regional or widespread outage. Business owners may not be able to prevent a power outage from happening, but planning ahead and incorporating step-by-step instructions for the business’s unique needs can help prevent the loss of temperature-controlled products.

Conduct an extensive walkthrough of the facility and make note of any temperature-controlled products or power-reliant vulnerabilities. Include clear instructions for handling these products in the case of a power outage and ensure resources are readily and easily available. 

Consider having a paper log on hand in order to manually monitor and document product and food temperatures as long as it is safe to remain in the building or if the power outage is confirmed to be brief. Avoid opening reach-in and walk-in cooler doors as much as possible to keep items cold. A freezer in good condition may maintain its temperature for up to 24 hours if unopened.

“When a power outage impacts temperature-controlled products, discard any foods that may have been in the cooling or warming process,” advised Paula Herald, Technical Consultant at Steritech. “Don’t take chances trying to cool down hot foods; discard in the interest of food safety.”

Tip Two: Address Air Quality Concerns

Flash floods and wildfires continue to sweep across the United States releasing toxins, bacteria, smoke and other harmful pathogens into the air. These contaminants infect the air and seep into floors, walls and furniture, linger long after the flood or fire subsides. Exposure to these pollutants can be highly dangerous to people and can lead to heart and lung problems, eye and skin irritation and a number of other health-related issues.

Do not enter a space that has been impacted by a flood or fire without first receiving approval from health and safety officials. Once the area is deemed safe to enter, assess all structural damage, look for signs of smoke damage or mold and dispose of anything that can not be washed, rinsed and disinfected such as furniture and carpet. Air decontamination units can be used to help remove any remaining airborne toxins, gases and pollutants.

“The increased frequency of natural disasters is having a significant impact on air quality,” said Matt Hayas, Director of Product and Innovation at Ambius. “Business owners can address indoor air quality concerns by investing in specialized air decontamination units designed to effectively remove 99.9999% of air pollutants before, during and after severe weather situations.”

Tip Three: Remove Destruction and Debris

Natural disasters can leave behind damaged roofs, broken windows, fallen trees and other destruction and debris. Structural damage and piled-up debris are not only safety hazards, they can also create the perfect harborage for rodents, insects, birds and other pests looking to build a new home.

Once the weather emergency has passed, it’s important to conduct an extensive walk-through of the property. Identify any open access points and move any fallen trees and debris as far away from the building as possible.

“A minimum distance of 25 feet is recommended to keep pests from entering the building,” said Nancy Troyano at Rentokil. “Rodents can fit through holes as small as one-fourth an inch so it’s critical to conduct a thorough inspection of the building, before and after a storm hits.”

Dealing with the aftermath of a weather-related disaster can be overwhelming and costly. A pre-established hazard mitigation plan can save businesses up to $13 dollars per $1 dollar invested (National Institute of Building Sciences). As climate change continues to advance, the threat of weather emergencies may soon be a reality for many across the country. Be proactive and establish a plan before a disaster strikes. Incorporate these tips into a crisis plan to better protect businesses, properties and the people they serve.

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