How to turn pent up demand into business as usual

March 23, 2021 BySensormatic News Desk


It is fair to say that no one expects the retail store to ever be the same again, after a whole year of disruption. It is easy to forget that some disruption was already going on before the pandemic, but the response by retailers then was gradual and measured, so it all looked more like evolution rather than revolution.

However, now, revolution looks more like the right word and retailers have had a year during which to contemplate what the store needs to look like as they start to reopen. Talk over two years ago about the experiential store that shifted focus from stock to customer experience looks to become a reality. With the shift to on line during the pandemic, that experience has to be seamless across both store and on line channels.

It is important however that these plans are not interrupted by the impact of pent-up demand, which might make retailers think they don’t really have to make any significant changes.

Back in October 2020, the KPMG/Ipsos Retail Think Tank’s Retail Health Index showed that “retail health” had climbed to 67 points in the third quarter, from 61 in the second quarter. The authors reported, “There has been a particularly strong uplift in homewares and electrical sales, thanks to the cut in stamp duty spurring home moves, and unspent holiday savings being ploughed into DIY and home improvements". And more recently, Barclaycard said spending was down 7.1% in 2020 as consumers saved money they were unable to spend on holidays and going out.

But while months of lockdown are sur to cause a sudden spike in store traffic on day one of restrictions ending, no one can predict whether the initial spike is sustainable or what types of retail are going to be most popular, so retailers will be asking themselves – is there anything I can do to make sure that my store is as attractive, rewarding and fun as possible whilst at the same time safe and secure, so that customers come back again and again. And what can I do to make sure that people don’t simply revert to the online shopping that they have got so used to during lockdowns?

The first response should be to review all the changes that have been made during 2020 and make sure they are still fit for purpose. Consumers will still want to feel safe, and masks are probably here to stay for many. Some retailers started well but hygiene equipment is now often missing, and processes have become relaxed, which will not instil confidence in the customer. Some flexibility will be needed so that retailers can monitor customer behaviour to see how they want to navigate stores differently; current one-way systems in store may need to be maintained.

Staffing needs to be looked at from three aspects; one, that there are enough staff scheduled to handle a surge in traffic, each with the right skills so that customers are handled according to their needs rather than simply seen as one long queue; two, that they can deliver an outstanding experience so that customers return to the store; and three, that there is flex in the schedule so that retailers can staff up for demand but staff down to avoid labour costs getting out of hand.

The pride and glory of any store is the shelf, the clothes rack, the product table and the display cabinet. These need to be looking as perfect as possible all of the time as customers will not react well to a lack of stock or stock display gaps. And while retailers may choose to up their safety stock levels for a short period, they will also want to make sure that they replenish outside of peak hours; this not only turns customers off, it means staff are not available for customer facing tasks.

And the mix of stock needs to be right. This requires a little alchemy on the part of the retailer, but it makes sense to review on line sales from 2020 to take a view as to where demand will be strongest on the shelf. Systems will then be needed that can see stock levels in every store – location as well as status.

Knowing stock status will become even more relevant because, when it comes to fulfilment of orders and purchases. It is likely that consumers will con tinue to embrace methods that emerged during the lockdown, where in many cases the store changed into a warehouse. And this is important; purchases made online were often fulfilled from a store because the store rather than the warehouse had the stock and it was located closer to the customer

So, whether orders are fulfilled for click & collect, curbside, pick up by couriers, or bought on site, stock throughput is certain to look very different as stores reopen.

However, retailers choose to respond to pent up demand and beyond, it is clear that the watchword is agility, the ability as well as the willingness to respond quickly to changing demand and behaviour.


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