This week we interviewed Nick, former VP of IT at Kroger with more than 30 years of experience in retail, who shared insights on how vendors can best adapt to support retail organizations during these unique times.
Here are the three key takeaways from the conversation:
1. If something’s not urgent, let it lie for the time being. Make space for some adjustment. Make it easier for your partners, maybe extending contracts that are up for negotiation under current terms and then revisiting once the dust has settled in a few weeks. This is a unique situation for businesses to adapt to because of the scale. It’s not a localized event, it’s national and global. This is not a time to negotiate, not a time for product audits – a sweet and short note saying that you’re there to help is the strongest move to make at this point.
2. There are a lot of gaps to fill in business, government and infrastructure. Even beyond your vendor partnerships, consider how your organization could pitch in anywhere where your experts are relevant. You never know the impact that you might have and the relationships that may come out of it.
3. Retailers and businesses in general are going to be digesting current events for some time. We’ll move on from where we are now, but the lessons learned from these events will ripple outward for some time. Get ahead of that reflection period so that you can tell a compelling partnership story while these organizations still feel a need to mitigate future risk, while they’re still digesting and considering. Look at e-commerce, look at consumer behavior, look at empowering workforces and look at supply chains specifically when it comes to retail.
Panel Discussion Highlights
Q:
I’d like to just start by getting your take on the business impact of the coronavirus. Where are we now from your perspective, and what are the implications for major retailers like Kroger and others?
A:
The two things that come to mind are first, your supply chain. When you think about what’s going on right now in the grocery retail world, supply chains are just at their max, and it’s just keeping up with the huge increase in demand. We’re seeing a huge increase in the amount of items, the variety and just how quickly things are flying off the shelf, so supply chain is a huge impact show. We’re really, really focused right now, everyone in the retail world is, in keeping that supply chain up and going and working with suppliers. This isn’t just a retailer issue, it impacts the suppliers as well and all the CPG companies we work with. It has to be really good partnership to make it work.
The other impact we’re seeing is labor. Hiring, obviously they’re hiring people on the spot now if they can be stocking or cleaning the stores, and all of it is geared toward how do you react and sustain this, because right now there is no end in sight.
Here in Ohio, we just put a ban in yesterday, kind of a mandate to stay at home, so you’re going to see even more stress on that supply chain. I think it’s going to change the way that people look at retailing and going out in the future, and it’s going to be interesting to see four, five, six months from now what it looks like.
Q:
If you were speaking to technology providers who are trying to strike the right tone in this environment, what guidance would you give? B2B teams want to be seen as supportive to their customers, always, but how can they frame themselves as such with current events?
A:
I spent some time thinking about this, because even without the coronavirus, people’s calendars are really full. When I was a VP, I could have spent every lunch and every dinner in meetings with suppliers, software, hardware, you name it. And right now, people I’ve talked with at Kroger, they’re busy. They are working around the clock. People who are working in supply chain, it’s nonstop. So I guess my advice would be you need to communicate, whether you’ve got a good relationship with someone you know or you have someone on site there at the facilities or if you have quarterly meetings, whatever it is, send either a phone call or an email just to say, “Hey, we’re here. We’re here to help.”
When I think about it, this isn’t a time to say, it’s the end of the year and let’s negotiate a contract. This isn’t a time to be doing internal audits, where you want to go in and see if the software is being used and is installed in venues correctly. You’re just not going to get anybody’s calendar. If you have technical experts, let’s say you have a package system that’s been purchased and is running at Kroger, send that expert or analyst that is familiar with the Kroger account to volunteer to help. They can go on site and work a couple of days a week to alleviate some of this pain going on right now.
Q:
Are there any capabilities you think retailers would benefit from in a situation like this? Given usage of data and reactions to events like this that will drastically change customer behavior, where can technology step in and help organizations be prepared and react effectively?
A:
I think we’re going to see that it is going to be super important that retailers have collected all the data around this operation and understand what the impact was. So for instance I’ve been in our stores several times looking around, and the shelves are wiped out. The dairy case for instance was totally wiped out, but there was still a brand of butter in there that no matter how bad things got, it was still on the shelf. People weren’t buying it.
It was kind of strange to me to see that to say, okay, use the data in what happened here to say, “What are the slow moving items that we really just don’t need to put on the shelves? Do we have too much variety? Is there too much time and effort that goes into store planograms?” And in looking at having merchandise items, that if items aren’t selling now, we really ought to take a look at that to be more efficient, more responsive to our customers and really around disasters as well, really utilize our processing and our shelf space for items that are going to make a difference in people’s lives and are really going to move out.
Q:
If we could ask you to put your global VP of IT hat back on, what would you be thinking about in this situation?
A:
First I would say that these kinds of problems aren’t solved by just the retailer or just the suppliers or just local governments and national governments. People need to be thinking more broadly as to how all the pieces fit together. Because if one aspect is broken, the whole thing would fall apart. So I think about this term in terms of supply chain first and foremost, and where are the gaps, where the weaknesses, how do we share data better? Not just with suppliers, but also with customers. I think about even things with local governments and ways to be able to give them information in real time about what’s the status of the supply chain, what are the items we’re short on.
When you come out of this, what’s the data going to tell you? What did you really learn about what’s important to people that they have, and then how do you get that back to the suppliers? How do you get it to all the people in the supply chain that need to know and that say we need to ramp up production on these types of items because this is what really sells and what people really need at this point in time. So I think you may come out of there with, “Here’s the top items that we need to make sure that we can flip a switch and get a huge new supplier, these particular items.” I think data’s going to help with things like that.
I think about the workforce. There are people that are working – I think about the medical community. I think about the supply chain and the retail community – there are people working an unbelievable number of hours to make this work, and I worry about how long they can sustain that.
So then I start thinking about our workforce and how do we make things for the retailer, the suppliers, the trucking industry, everything you think about in the supply chain, how do we make their jobs easier? How do we install technology that makes it easy to mobilize a workforce into temporary help. And even volunteers from the community, that can be part of the solution. So I just think about, how do we simplify things at every step of the way so when these things happen again, it’s easier to respond to.
For more insights on how your business can find ways to adapt and succeed in these unique times, you can connect with one of the thousands of advisors in our network from Fortune 1000 firms. Contact us here to see what an Emissary can do for your business.
