Operational agility in the face of a crisis
How some retailers are adapting and staying ahead in these uncertain times.
Agility is the ability of an organization to adapt and change quickly in a rapidly changing, uncertain, and turbulent environment. So if a retailer is amidst a pandemic, what should it solve for — preserve cash 💰, protect revenues 💸, or importantly, keep customers and employees safe ⛑? The obvious answer is all of the above. Here’s a look at 3 retailers who acted quickly and decisively to achieve the above objectives:
1. Protect Revenues: Best Buy
While the majority of the non-essential offline retailers have shut down operations, Best Buy has found a way to keep the cash register ringing. It created a contactless curbside pick-up where you can pick up items at your local store within 1 hour of placing the order online.
While the products Best Buy sells are not essential to surviving (although some will argue otherwise 😊), they can be handy for a quarantined life. Let’s take an example of the Airpod pros that one takes on his/her isolated walks. Where I live in Stanford, CA, the fastest way to get them is through Best Buy. Under normal circumstances, I would have bought these from Amazon or Apple directly, but in this case, Best Buy offered the fastest service and was a clear winner. Well done, Best Buy!
2. Keep Customers Safe: Kroger
Kroger on Monday, April 6 announced aggressive measures for COVID-19. Most innovative amongst the initiatives was “directional shopping” or one-way isles, which will support the social distancing efforts. Also, it is putting capacity limits to 50% across its 2,800 stores in the US. Kroger’s CTO, Yael Cosset, said:
It has several other initiatives to ensure the safety and health of its employees and continue its community support efforts.
3. Preserve Cash: Ulta Beauty
While the Ulta stores are closed, its e-commerce platform remains open. Ulta has seen tremendous success with its online platform, where it grew between 20% to 30% in 2019.
Ulta has continued to serve its customers and taken swift actions to preserve its cash. Ulta announced on April 2 that it is cutting back on expenses, including plans to open 75 new stores in 2020, due to the coronavirus. The beauty retailer is also suspending new hires and deferring merit increases.
This reminds me of Sequoia’s RIP Good Times presentation from 2008, where it professed that the businesses that survive are the ones that act quickly.
While the future impact of this pandemic on retailers is still uncertain, what’s certain is that the ones that move quickly and act decisively will emerge stronger and create lasting stakeholder value.
Amit Rawal is a Sloan Fellow at Stanford’s Graduate School of Business. He has spent the last decade in building and scaling e-commerce ventures for 40%+ of the world’s population. At Stanford, he is focused on bringing together tech, design, and data to create joyful shopping experiences. He is a data geek and loves tracking all kinds of health and wellness metrics. He can be reached at firstname.lastname@example.org.