Where there’s hope, there’s life
Desperate times call for desperate measures, as the saying goes. But in the face of coronavirus, it’s heartening to
see that many retailers around the globe are generally putting the welfare of employees and customers, rather than themselves, first.
Stepping up safety
In-demand channels stocking essential products, such as supermarkets, hypermarkets, discount department stores, convenience stores, and – apparently – hardware, are putting in place a raft of measures to cope with and regulate demand. These include store and trading hour changes, employee hiring, safety measures for employees and customers, online delivery, and improved trading and payment terms for suppliers.
Supermarkets across the UK, US and parts of Europe are typically reducing their trading hours to allow for overnight restocking and cleaning, and for online deliveries. Many have introduced special trading hours for the elderly, vulnerable and emergency workers.
Safety in-store measures introduced for both employee and customers include signage, floor decals and audio messages to encourage social distancing. Some retailers are staggering store entry. Last week, Costco USA said it will allow no more than two people to enter the store with each membership card. US home improvement retailer Lowes’ store managers have access to an app that monitors foot traffic and can limit entrants based on guidelines from the Centres for Disease Control. Costco plans to add “social distancing ambassadors” to monitor and enforce customer flow and distancing in its garden centres and front-of-store areas.
Germany, a country with a long tradition of closing stores on Sundays, has reconsidered its supply and trading hours to even out traffic flows in supermarkets across the week. Already a number of German states have relaxed the Sunday driving bans for trucks so deliveries can continue throughout the weekend.
Other safety measures in the US include 7-Eleven’s announced intention to install plexiglass sneeze guards at its store counters (something Aldi has already introduced in some markets); its Australian franchises already use digital signage to encourage the use of tap-and-go transactions over cash.
A number of retailers are providing employees with optional masks and gloves. Home Depot announced on April 1 that it was handing out thermometers to store and distribution centre workers to perform health checks before reporting on shift. Sam’s Club has implemented similar, with anyone registering a temperature of 100 degrees Fahrenheit (37.8 Celsius) or higher to be sent home and told not to return to work until they are fever-free for at least three days (Sam’s Club has also implemented a policy which includes paid leave for associates that need to self-quarantine due to COVID-19).
Pay and conditions improve
Retailers in essential channels are attempting to put the welfare of their employees and customers first. Walmart will pay employees contracting the coronavirus for up to two weeks and for up to 26 weeks thereafter if they are still unable to work. Target USA offers similar, as well as paid leave for employees over the age of 65, or those who are pregnant or have underlying medical conditions in addition to supplementary payroll to support “more rigorous cleaning routines”.
Further, a number of retailers are paying their staff more money during this time in recognition of the increased physical and mental duress. Aldi UK and Tesco are giving staff 10 per cent bonuses. Lowes US & Canada staff are being given a temporary $2 per hour wage increase for the hours they work at stores, contact centres and supply chain facilities for the month of April. This is in addition to the special payments of $300 for full-time employees and $150 for part-time and seasonal employees announced on March 25.
Closed for business?
What then of categories and retail sectors not considered essential and likely to experience a downturn due to subdued economies and consumer spending? While consumer staple sectors channels struggle to fulfill demand, some “non-essential” retail channels and manufacturers are taking the opportunity to be philanthropic, to innovate and to engage with customers.
Certainly, the norm is becoming shuttering physical stores, with the UK’s Primark being a recent addition. Nike, Urban Outfitters and Patagonia have all indefinitely shut their stores. In many or most cases, employees are being paid for lost shifts, with many retailers planning to cover health benefits and/or salary for employees stood down for at least the next month or two. Under Armour announced on April 3 that it will pay “premium bonuses” to distribution centre employees who continue to work.
Many companies are paying their employees while closed. Patagonia, while keeping its Patagonia Provisions food business open online, has closed its stores and offices but retained all employees’ regular pay. Starbucks has introduced “catastrophe pay” for employees in the case of possible quarantine. Others, such as Macy’s, are using flexible schedules such as those that it developed during the SARS epidemic in 2002, to keep as many employees on-shift as possible.
A number of company executives and boards are taking salary cuts. Under Armour executive vice presidents and above roles, as well as the board of directors, are taking a 25 per cent salary cut. The CEO of Neiman Marcus in the US has waived 100 per cent of his salary. On April 2, it was announced that Lululemon’s senior leadership team members are reducing their salaries by 20 per cent and that the board of directors is forgoing its cash retainer. The funds will go to the We Stand Together Fund to help employees that are dealing with coronavirus-related hardships. Lululemon will continue to pay for employees through June 1 “whether stores reopen or remain closed”.
Offering a helping hand
Other retailers and manufacturers are, as in times of war, repurposing their facilities. Luxury retailers and brands are a case in point.
While luxury brands have suffered through the Chinese consumer downturn, store closures and through their lack of e-commerce evolution, some are now making up for lost time, employing stylists, personal shoppers and communications to stay in contact with customers.
But, more importantly, many are repurposing their capabilities. Despite being hard hit, the luxury sector is responding humanely and innovatively. Louis Vuitton owner LVMH has begun using its perfume production lines to make hand sanitiser, which it is sending out to hospitals in France (distilleries and breweries, among other manufacturers, are performing the same function in Australia).
Prada, Louis Vuitton, Yves Saint Laurent, Gucci and Balenciaga have all reportedly commenced retooling for the manufacture of surgical face masks. COS, Zara, H&M and Mango have also committed to this production.
On the equipment front, Dyson now famously designed and built a new ventilator in 10 days, with 10,000 ventilators for the UK due on top of a further 5000 ventilators for donation, 1000 of which will go to the UK and the remaining 4000 to other countries. Similarly, Ford, Tesla, Vauxhall and General Motors have joined in ventilator and mask supply.
The COVID-19 crisis may have brought out the best and the worst in consumers, but it’s heartening to see many retailers responding humanely, holistically, responsibly, and to some extent – selflessly.
Norrelle Goldring has 20 years’ experience in retail, category, channel and customer strategy, planning, research and marketing, working in and with global retailers, manufacturers, research and consulting houses. Call: 0411735190; Email: email@example.com
This story first ran in Inside Retail Weekly. Given the current crisis, we have decided to unlock all premium content related to COVID-19. If you would like to support Inside Retail, please consider subscribing here.
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