Essential retailers' workforces are under a lot of strain right now, as they are being forced to keep up with unprecedented demand, while at the same time many of their employees may be calling out sick. As a result, relying on robots to complete more in-store tasks is starting to look more and more attractive to retailers. Before the coronavirus pandemic, retailers including Walmart and Giant Eagle were starting to test out using robots in their stores for tasks like unloading pallets of inventory and scanning shelves to get a count of inventory. Now, that trend will likely accelerate.
As no one knows exactly how much consumer spending will rebound (or not) in the coming months, retail and e-commerce businesses are being forced to reconsider every single expense. The most obvious way for companies to cut costs is to lay off or furlough employees. And many of them have already done that. But beyond that, how do you save money? Consumer investors are advising startups to think of every single expense as negotiable. Here are some of their tips on places to save money.
As more people experience financial difficulties and become in need of interest-free finances, alternative e-commerce payment methods are seeing bigger interest than ever in America.
Visibility is a real problem for execs across media and marketing. It’s unclear how long this crisis will last, and the feeling in the first few weeks that this would be as simple as flicking a switch back on once things go “back to normal” has largely dissipated.
At Modern Retail's first Plus Talks, WellPath CEO Colin Darretta talked about how he's retooled his DTC wellness brand. He provided tips and insights about how to prepare a supply chain during a global downturn, as well as the business trends he's looking toward.
"We've had weekly Zoom chats with four or five CEOs, talking about how we're managing and how we're handling, what we're hearing and what we're learning, how our businesses are doing and what channels are performing," Kaye said on the Modern Retail Podcast. "That shared information has been so helpful."
For retailers, running heavy promotions during store shutdowns is proving to be tricky. Due to the coronavirus outbreak, large retailers like Macy’s and Nordstrom, along with chains like the Gap, are aggressively pushing seasonal sales to make room for spring merchandise. With virtually all brick and mortar sales down, anywhere from up to 80% to 100% of expected revenue effectively disappearing for large brands, offering discounts is one of the most effective ways to stay afloat right now, said senior retail analyst at Fit Small Business Meaghan Brophy.
The coronavirus outbreak is likely to permanently change the relationship between workers at retailers that have been deemed essential, like grocery, hardware, and big-box stores, and their employers. Each day, the list of announcements from retailers about new steps they are taking to keep employees safe in stores, as well as to thank them for their work, is growing longer. While many of the benefits issued are being billed as temporary, what's become clear in recent weeks is that as their jobs are being classified as essential, retail workers see their jobs as being more worthy than ever before of better benefits.
If Benjamin Witte talks about his beverage brand Recess as if it were an empire, it's because he's noticed the same ambition among the sector's established giants. "Red Bull is a media company for the action sports community that monetizes through selling cans," Witte said on the Modern Retail Podcast. "We're speaking to creatives, just like Red Bull is speaking to the action sports community, and Gatorade is speaking to athletics."
Since launching last year, seed-stage VC fund Vice has invested almost exclusively in these categories, which is currently proving to be a success. Vice-backed startups include CBD seller Plant People, which saw a rough 30% increase in mid-March without the use of marketing spend. Similarly, CBD beverage Recess also doubled its e-commerce sales over the past two weeks. Meanwhile Lucy, the nicotine harm reduction platform in Vice’s portfolio, experienced a 50% increase in sales in recent weeks. Those figures are attributed to news of young smokers’ coronavirus mortality rate being higher than non-smokers, thus driving traffic to the site.
Amazon is facing increasing pressure over its working conditions for warehouse employees. With more workers testing positive for coronavirus, people are saying the company hasn't been keeping its front-line workers safe. While Amazon is making big changes now, is it too little too late?
Spring is typically the busiest time of year for hardware stores like Lowe's and Home Depot, as customers flock to stores for deals on plants, gardening equipment and other home renovation tools. But during a pandemic, high foot traffic is problematic. In addition to grocery stores and pharmacies, most states have classified hardware stores like Lowe's and Home Depot as essential in the wake of the coronavirus outbreak. An ongoing source of frustration for many hardware store employees in recent days has been how many shoppers are still coming to the store for what non-essential items.
DTC alcohol has been slower to take off than other products, but this surge in pandemic can help it change customer habits for good. Winc president Brian Smith tells us how they're going about accelerating it.
Running a new direct to consumer brand is challenging enough, but doing it during pandemic-related economic uncertainty comes with a new set of obstacles. Shapermint, the brand that sells shapewear, generated $150 million in revenue since its 2018 launch with an operation of an international, remote team. The company initially saw some drop in sales, but has pivoted content and marketing quickly to try make the most of the current situation. Modern Retail talked to co-founder and CMO Massimiliano Tirocchi about pivoting to be about "at-home" shapewear, taking advantage of cheaper ad rates, and managing employee burnout.
Despite China seemingly back in action with funding, venture capitalists don't expect a quick restart for U.S. startups. “I really don't see many deals starting and completing during the quarantine."
Advertisers, from DTCs scrapping for share in a crackling at-home beauty market to seasoned retailers leaning into the quarantined consumer’s e-commerce surge, what’s changing about your campaign KPIs? How are you using data to make choices and effectively budget across channels? What’s working, what’s broken and how will you fix it? Take this survey and get the full results plus a $5 Starbucks gift card.
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