What Do Retail Leaders Need to Embrace During COVID-19?
Coronavirus is having a big impact on retail. Most “non-essential” stores are closed, and digital channels are a solution. However, what does this mean for big traditional brands who have not embraced digital? For those brands, their identity is in question because COVID-19 is a disruptor. Identity is at the forefront because it is difficult to change, and it usually means mistakes and the negative ramifications that potentially accompany those mistakes. In order for retailers to push forward their ability to adapt and manage, COVID-19 will put every CEO and the C-Level team on a pedestal.
How do we change our identity?
I attended Shoptalk in Las Vegas, March of 2018. Their two keynote openers included the CEO of Macy’s, followed up by the CEO of Sears, on the big stage:
- Macy’s CEO declared digital change, VR & mobile shopping, a Facebook store, etc.
- Sears’s reinforced retail, traditional growth and zero emphases on digital.
Results:
- Macy’s still in business, financially flat and still paying dividends per their 2019 annual report released March 30th, 2020.
- Sears Holdings filed for Chapter 11 bankruptcy on Oct. 15, 2018, 7-months later.
Identity is our foundation, it’s religion, nationality, taste, music, fashion, career, etc. It’s so important to who we are and it lies at the core of how we conduct ourselves day-to-day. In a corporate environment, it is where you place your energy. For many traditional retailers, digital channels have been 0%-30% of sales but today, for many, it’s now approaching 100%, unless they are selling at Walmart, CVS, and other “essential” retail locations.
Besides the obvious logistical nightmare & need for distribution channels to connect with eCommerce platforms, many retail leaders did not build their careers on digital nor are they digitally native. It puts them in an uncomfortable situation where they have to ask subordinates for help and to be their source of knowledge & experience. This provokes the question, who is in leadership?
Let’s consider Chanel, who closed its stores as of March 16th 2020. Chanel has a clear brand identity: we know why we want to buy their product and what the brand stands for. However, Chanel removed the buy button from their website because the goal of their digital content was to drive their customers to the store because the instore experience was critical to their identity. So, the digital content’s focus was primarily on their brand awareness and to drive foot traffic to store — take their classic handbag as an example.
To change our identity, we have to declare it. It has to be clear that we will need to change how we do business. Every single person on the planet has been impacted in some way by COVID-19. It has opened up teams to have Zoom calls and work from home, while companies in major cities continue to pay massive rent obligations for their retail spaces and offices. We will come out of COVID-19 but this social experiment has allowed us to grow digitally. This is the moment where CEOs can safely embrace transformation and become digital.
