South Florida Business Journal and Comcast Business earlier this month convened a panel of South Florida retail executives to discuss how the coronavirus pandemic is transforming their industry. You might expect them to have described a grim time of plummeting sales, store closings and layoffs, and worry over the pace of the economic recovery. And there’s no question that the last 12 months were difficult for them. One panelist reported that her company has not made a single sale in over a year. Yet, thanks to their decisions to implement new technologies and business strategies, their stories are not just ones of survival, but growth.
Moderator Arden Karson, managing partner at Miami-based Karson & Co., a real estate brokerage, advisory and development company, opened the discussion by asking the panelists to describe the impact the pandemic has had on their businesses.
Nadine Heubel, CEO of Heinemann Americas, said her business is a microcosm of how the pandemic has devastated the cruise industry. Heinemann Americas is a provider of logistics, supply chain management, distribution and travel retail services to airports around the world and some of the largest cruise lines in the American markets.
When consumers shop aboard the cruise lines’ ships, they’re likely stepping into a store that Heinemann Americas operates. Those stores have been closed since the cruise lines suspended all trips from U.S. ports in March 2020.
“We had our last customer on March 14, 2020,” said Heubel, eliciting gasps from the other panelists. “But we are still working with cruise lines as they prepare to launch new ships like Carnival’s Mardi Gras, hopefully within the next six weeks. So, although we don’t have any revenue coming in, we still need to have teams in place to prepare for these launches.”
Still, Heubel sees reason for optimism. Cruise lines have resumed trips at limited capacities from some Singapore and European ports. She says Americans are anxious to resume traveling and have money to spend thanks to the most recent round of the federal government’s economic relief payments.
“The models we ran soon after the pandemic struck indicated that cruise lines would experience long-term struggles with low capacity and consumer spending levels, but thankfully, that doesn’t appear to be the case,” she said. “People are spending two to three times more than what they used to. They’re indulging like they’re telling themselves, ‘I’m finally on holiday, and I’m going to open my wallet to treat myself.’”
The other panelists said they’re also witnessing this “revenge shopping” phenomenon. For many, it’s a
continuance in the surge of business they’ve experienced both online and in their brick-and-mortar stores.
“March and April was very scary for us with store shutdowns,” said Andrew Koenig, president of City Furniture. “But we experienced a huge digital shift in our business as our customers embraced online shopping. We also implemented new strategies like reopening stores to offer private, in-person appointments to help our customers who suddenly found themselves working and educating their kids from home full time. We actually grew our business by over 20% last year.”
The transition so many South Floridians had to make to working or attending school from home full time, and shopping online also transformed Office Depot’s business model. Andrew Parry, vice president of IT application development & support for the Boca Raton-based company, says those changes will be permanent.
“A large portion of our business is digital and we’re seeing a large percentage of sales shift from our B2B
business to our consumer business because so many people are working from home, and want to continue to do so even after the pandemic recedes,” he said. “Our retail stores are doing well because we expanded our omnichannel sales channels by introducing curbside pickup and online ordering of products for delivery from stores. We expect these trends will continue over the long term.”
Koenig added that when consumers shop online, they expect to receive their orders as soon as possible – preferably same day. That’s why City Furniture is building a massive distribution center in Tampa that’s 50% larger than its South Florida facility.
“Amazon has reset consumers’ expectations by reinforcing speed, speed, speed,” he said. “We have to carry more inventory to satisfy that demand to get what they need when they want it and make them happy, loyal, repeat customers.
Brett Beveridge, CEO of The Revenue Optimization Companies (T-ROC), warned that enabling customers to shop online is no longer a competitive differentiator. Headquartered in Coral Gables, T-ROC provides retail services for Fortune 50 companies like Walmart, Best Buy and Target, and owns and operates T-Mobile and Xfinity Wireless stores. Beveridge said brick-and mortar stores remain a critical piece of an effective omnichannel strategy.
“Offering curbside pick up, the ability to buy online and pickup at a store or opt for home delivery, offering real-time interactions with customer support via voice or text -these are all table stakes,” he said. “Forward-looking companies are exploring how to use technologies like artificial intelligence that use data on customers’ preferences and past purchases to create highly personalized shopping experiences.”
Enzo Potolicchio owns and operates U Break I Fix franchises in more than 40 territories throughout the Southeast. Finding new ways to deliver personalized customer service became a priority after in-store traffic dropped significantly with the onset of the pandemic. For instance, the company offers to send technicians to customers’ homes to repair their phones, laptops and other electronic devices. Now, as people opt to continue working from home at least part time, Potolicchio says customers are bringing in older computers that they haven’t used in years.
“Offering the option to schedule at- home appointments has helped us build loyalty and repeat business, and that draws more foot traffic to our stores,” he said. “We opened seven new locations last year, and are in line to open 13 this year, so brick-and-mortar remains a critical part of our business.”
A.J. Titus, brand president of United Franchise Group, says as shoppers return to stores, their health and safety will remain among their top concerns. United Franchise Group is a West Palm Beach-based franchisor of more than a dozen brands around the world that include food, electronics and other segments. The largest is Signarama, which provides signs retailers can post inside and outside their stores or wrap around their vehicles. Titus says Signarama franchisees report that retailers are ordering signs to reassure their customers that it’s safe to come inside their locations. “Consumers want to know a business is abiding by local laws around cleanliness,” he said. “It’s also a big deal in the restaurant industry – we’re seeing cleanliness has moved ahead of even the taste of food in terms of importance for consumers.”
Titus adds that the pandemic has revitalized an older technology that many retailers – including his company – had dismissed as outdated and ineffective years ago: the QR code. Introduced in 1994 – long before high-speed Wi-Fi hotspots and smartphones – the QR (quick response) code is a type of matrix barcode that conveys information to machine scanners. The modern iteration enables consumers to scan the code with their smartphone cameras.
Titus expects that since consumers will continue to prefer touchless options while shopping and interacting with sales associates, the QR code will experience a renaissance.
“We implemented QR codes several years ago, even though the technology seemed old at the time,” he said, laughing. “But over the last year we’ve discovered they’re so much more efficient than having physical displays like binders or menus, and they promote cleanliness. A sales rep can use one to instantly check on stock levels, view current promotions, and other activities that elevate customers service and increase conversion rates.”
Heubel described a similar experience after placing QR codes throughout airports five years ago. She called the program “an epic failure.” No one wanted to shop on their phones.
“But now, we think it’s the time to bring back the QR code,” she said. “We’re thinking about how to implement a QR code wall on cruise ships in locations that don’t have stores, such as on a pool deck, to make it easy for travelers to browse and make purchases wherever they are on a ship.”
“QR codes are one of many mechanisms to help customers engage with a live associate or get more info via a bot,” added Beveridge. “We’re seeing long tails from things like a QR code scan that you might think would be an initial buy, but 30 days later consumers can still access the information and place an order. Offering QR codes has become mission-critical for us, particularly now that we can use them to help our customers engage in real-time with one of our associates or with A.I.-powered chatbots to get the information they need.”
Koenig says retailers should focus their technology investments on how to elevate their customer service levels across all their online and in-person channels.
“We don’t want our customers to feel like they have to pick up the phone or send text messages to our customer service department in order to get information about delivery times,” he said. “We’re making investments in technologies that enable us to offer self-service options and triggered messages or alerts to deliver information to customers in real time. After all, the old rule still applies: if you don’t have a great customer experience, they’re going to shop somewhere else.”
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Source: South Florida Business Journal