Retail during COVID-19: rethink your strategy and be open for change

Retail during COVID-19: rethink your strategy and be open for change

16 Oct 2020

Author: Sarah Shavit at Fuhrer & Hotz

The Corona crisis has put the whole world on pause for a brief moment and the lockdown has caused new challenges for everyone. Nevertheless, there were also winners who benefitted from the changed consumer behaviour. In the year 2020 the food/near-food retail was able to make 2 billion francs more in sales. This is due to the reduced out-of-home consumption and the reduced foreign purchases partly caused by closed borders. Also, customers did their grocery shopping less often but bought more at once. 63% of the questioned Experts in June and July 2020 by Fuhrer & Hotz indicated increased shopping receipts. Moreover, during the crisis both the BSF (Bundesamt für Statistik) and Nielsen observed a drop in prices. An increase in price sensitivity has already been observed for years now. According to current assessments the Corona crisis will amplify this trend. Therefore, discounters have come to the fore. 66% of the questioned consumers by Nielsen in Switzerland perceive discounters to be cheaper than other retailers. Lidl took first place within the discounter category, whereas Aldi Suisse followed in second place and Denner in third. The non-food sector has rather suffered during the crisis. It reached its lowest sales in April 2020, whereas the food/near-food sector had its highest sales at the same time. Due to COVID-19 the digital sales channel has been even more established and used by customers than before. According to Credit Suisse online sales are expected to be 3 billion francs more compared to the previous year 2019.

The Covid-19 pandemic has not only brought new challenges for everyone but also increased the pace of change. 69% of Experts questioned for the “Schweiz. Detailhandelsmonitor” by Fuhrer & Hotz have confirmed that their companies have introduced sustainable measures during and after the Lockdown. Especially the Home Office, the Digitalisation, Security Measures and Online Meetings have been established rather widely. The retail companies mostly took issue with the compliance of the security measures (88%) and the security of the sales people at their point of sale (87%). Three quarters of the questioned experts indicated being challenged with maintaining the required distance within the shops. The avoidance of stock gaps posed a rather smaller problem (58%). On the other hand, it seems that relationships between retail and industry have improved thanks to COVID-19. The questioned experts confirmed that the mutual support, the partnerships, the supplier loyalty/focus on existing partners and the communication were perceived more positive after the lockdown initiated in march.

In summary it can be said that every situation and even crisis has its advantages and disadvantages as well as its winners and losers. But more importantly the current situation offers a blank canvas to rethink the actual strategies and to be open for change.

Sources: Fuhrer & Hotz, Schweiz. Detailhandelsmonitor 2020, POS-Report 2020