Retail disruption 2021 Part 2

So in the previous article it was pointed out that retailers may have to change the way they approach the “new” normal. If that is the case, where do they need to start?

COVID-19 has not been the only interruption to the “normal” way of life many of enjoyed pre-2020. Although it has undoubtedly had an enormous impact on retail and hospitality, climate crises, contentious elections, tense scenes of upheaval and strife in the streets of cities across the globe only added to the sense of uncertainty. Add to this a stock market that continues to defy traditional economic indicators (unemployment, homelessness, store closings) and it should come as no surprise that retailers want to get their hands around things they can actually control right now. According to RSR Research, improving their inventory productivity was one of retail’s top opportunities.


In fact in the same study, RSR showed and not surprisingly after 2020’s results, General Merchandise retailers are those pushing the go-faster button most here. With entire product segments behaving in ways no one could have ever predicted, GM retailers are homing in on the ability to get the most out of their inventory at a rate far more drastic than FMCG retailers (49% to 35%, respectively), and even more so than Fashion (33%). Of course, they risk stock-outs in pushing the needle of productivity too far, but shortages can always be blamed on “COVID.” To further compound matters, traditional store-based retailers (especially those selling apparel) are not used to return rates of 25-35%, nor are they used to having uncertainty around what state that returned merchandise will be in when it comes back. Brand new health and safety protocols for the physical handling of a returned item – and whether it must be cleaned before being sold to another customer – are new territories retailers are being forced to navigate.

The vaccine progress provides a proverbial light at the end of the tunnel for retailers, but it doesn’t do away with any of the near-term hurdles they face. It’s unclear how long the rollout of a vaccine will take, and when consumer behavior will return to “normal,” or what the new normal will be. Trends accelerated by the pandemic will continue to pose problems for retailers as they look to catch up. According to Tyler Higgins, retail practice lead and managing director at global management consultancy AArete, “Supply chain infrastructure will continue to see major disruption in 2021. Pressure for home delivery and the run on key product categories has put pressure on retailers to re-think their distribution and transportation model.

“Most retailers have put in place austerity measures, which mean that they’ve slowed investments in innovation,” Shannon Warner, a partner in the consumer practice at Kearney, said. “Even those retailers who have been buoyed by the pandemic, they’ve been really focused on getting through this year and less focused on the two- to three- to five-year horizon. And so I think that there will be sort of a lasting impact for a period of time on the progress of innovation as a result of the pandemic.”

Again, there will be hard choices for retailers to make in the coming months. While it may seem easy to assume e-commerce will continue to grow, the need for brick and mortar retail will not go away. People still like to shop and if, or when this pandemic ends, it will be critical for retailers to find the right balance between the two options, or better even, find another option all together to satisfy the consumer needs.

About AKCEL Partners: AKCEL Partners is a sales consultancy founded by three executives with strong bonds throughout the textile, apparel, brand and retail industries. AKCEL Partners offers strategic sales planning combined with experienced, highly networked sales professionals who give clients immediate access to targeted decision-makers. We are dedicated to meeting or exceeding our clients’ short- and long-term revenue goals. To learn more, go to www.AKCELPartners.com.