Toward the end of April 2020, Retail Risk Australia hosted a webinar in place of its annual in-person event. This webinar brought together several of the region’s foremost experts on retail loss prevention. Sharing risk mitigation issues and lessons learned since the COVID-19 outbreak began, they discussed how retailers can operate safely and efficiently during these challenging times.
Since the recommendations they shared are relevant to retailers and grocers all around the world, I wanted to pass along some of the more notable insights, particularly as they relate to the four essential requirements for retail operations in the current climate: agility, proactivity, collaboration and communication.
All of the presenters touched on the importance of being agile in order to manage operations during the pandemic, especially given its rapid spread and the chance of a “second wave.” Two speakers in particular emphasized how quickly retailers must adapt to changing government mandates.
One, a profit protection manager for a well-known activewear brand, said that retailers had to make quick decisions based on short notice of local government closures. For example, it was easiest to simply close its stores outright in some countries – many with their safes full of cash and fridges full of perishables (e.g. protein shakes). The challenges didn’t stop there, though. He further described how his team determined that, when stores were allowed to reopen, the optimal capacity target for social distancing would be just one person per four square meters of floor space. Yet, shortly after completing this assessment, the local government decided to declare limits of 10 customers per store.
Another speaker, a fraud manager for an international big-box chain, described how two of her stores in Tasmania had to be shuttered with just 15 minutes notice due to a local outbreak.
Both retailers realized quickly that there would be no one-size-fits-all approach to sustaining demand during the pandemic – different countries and regions would have their own best approaches based on local circumstances. These experiences led both retailers to drive more agility within their teams, preparing them to quickly adapt to a variety of changing priorities, directives and initiatives. Notably, the fraud manager outlined how her region’s managers and operational support staff were briefed on rapid store lockdowns and a “critical incident desk” was opened to provide information quickly to those who needed it.
Later in the webinar, a loss consultant for an Australian grocer provided another example of agility when describing how his organization quickly set up eight “pop-up supply chains.” Bulk stock was being sourced from the manufacturer whenever possible and brought directly to the sales floor upon delivery. This reduced handling time and ensured availability.
These are smart moves by all retailers. Should a second wave of COVID-19 emerge in the near future, retailers who already prepared for such an event by augmenting their operations with increased agility will be in the best position to adapt and weather the challenges.
One of the best ways to enable agility is through proactivity. All of the speakers stressed that it is important to plan ahead for what could happen, not just focus on what is currently happening.
The profit protection manager was the first to touch on this point, stating that while his company already had store-lockdown protocols in place, they had never been enacted for more than a few days (citing riots in Paris and the UK as historical examples). No one had anticipated being closed down for so long when the COVID-19 outbreak first began, and that created additional operational challenges. His team quickly realized the importance of being proactive, especially in terms of securing safety equipment. Unwilling to wait for a mandate, his procurement team purchased personal protective equipment (PPE) for employees early on. This turned out to be a wise move, as on April 22, 2020, its national government ordered all citizens to wear face masks in public starting the following week, sparking more panic buying of PPE.
The fraud manager had similar sentiments. After the sudden shutdown of the aforementioned Tasmanian stores, she and her colleagues went into overdrive preparing for the possibility of additional shutdowns. Eight new standard operating procedure manuals were created to inform managers exactly how to shut down their stores if required. A plan was drafted for transforming shuttered stores into makeshift warehouses. They also sent huge quantities of the brand’s top 1,000 best-selling products to an available warehouse in Victoria so it could support e-commerce in the unlikely event that all of its stores would need to close.
A loss manager for a UK grocer emphasized the need for an additional type of proactivity by retailers, suggesting that loss prevention and asset protection professionals use the pandemic as an opportunity to prepare for post-pandemic risk and fraud scenarios. He stated that although crime in general seems to have decreased worldwide due to quarantine mandates, increased security at stores and related vigilance measures, the criminals are still out there, and they may return once conditions normalize. As an example, he warned of increased self-checkout risk related to credit card fraud, theft and similar incidents. With contactless payments being a sensible way to minimize human contact and, by extension, mitigate the risk of COVID-19 transmission, it is imperative to prepare for related criminal activity.
Recognizing that loss prevention teams may be tasked with managing increased initiatives in the coming months and will be required to do “more with less” as resources are stretched, it could prove highly beneficial to invest in technology that empowers them to track, analyze and act quickly on suspicious activity. In fact, such investments may be the most effective way to quickly stop fraud and protect profits at such a delicate time.
The pandemic has led some retail functions to become more siloed than usual with the consequence being fragmented problem-solving efforts. However, the speakers made it clear that collaboration among all areas of the operation is the key to both navigating retailers’ current challenges and preventing them from evolving into bigger ones.
A good example of this came from the fraud manager, who described a potential legal issue that was avoided with help from Human Resources (HR). Thanks to their collaboration, HR was able to warn the manager’s team not to issue its store-shutdown protocols with its previously designed title of “Closure Pacts.” HR team members explained that the word “closure” has a specific legal meaning at the company involving labor laws, severance pay and other sensitive subjects. Thus, shutting down a store per a document with the term “closure” in the title could result in fallout since the stores were not technically being “closed,” just shuttered temporarily. Per HR’s advice, the fraud manager’s team changed the documents to reflect a more neutral title before releasing them, mitigating any risk.
The speakers appeared to agree that communication was everything during a pandemic. Without clear, concise and reassuring messaging, panic would ensue. The loss consultant shared a strong example: just as panic was subsiding in Western Australia, a store associate began telling customers that the pandemic would be long term and that they should stock up now. With that single, unauthorized statement, panic buying ensued all over again. The grocer’s management team then launched a TV campaign in which an executive reassured customers that the chain could sustain demand. This move helped subside panic buying again.
A loss prevention head for a sporting goods retailer added that his company has been sending daily updates to its teams to keep them aware of important developments. The last thing the retailer wants, he said, is to “lose good employees due to unnecessary stress.”
All in all, the engaging discussion highlighted that the current pandemic environment may be challenging but rethinking and adapting strategy and technology can prepare retailers for the “new normal.” Specifically, those retailers who prioritize agility, proactivity in preparing for the future, cross-functional collaboration and communication with employees and customers will be well-positioned to rebuild in the coming months with a clear and strong competitive edge. Moreover, they will be able to conquer both the challenges of the current fast-changing environment and the yet-unknown challenges of the future.
If you’d like to speak with Yonatan or others on the Zebra retail team about these learnings and how you can leverage technology solutions such as prescriptive analytics to increase agility, proactivity, collaboration and communication within your current retail environment, please fill out this form.
We also recommend that you check out our COVID-19 resource page and the Your Edge blog retail channel for additional insights relevant to your business right now.