From surviving to thriving: a roadmap for post-Covid growth

As the Covid-19 pandemic has impacted both lives and livelihoods, it has also heralded a new reality for consumers and retailers. According the findings of McKinsey’s latest B2C Consumer Sentiment Survey (18–21 June 2020), UK shoppers have predicted a decrease in their spend across all purchasing areas, save for grocery, with 37% of consumers admitting to having switched brands since the start of the Covid-19 pandemic.

As the crisis continues to disrupt lives, retailers are looking to how to best respond to the ‘next normal’ with its evolved consumer behaviours and expectations. Rapid revenue response isn’t just a way to survive this crisis - what companies do today to capture revenue quickly lays the foundation for future growth and their ability to thrive in a post-Covid-19 world.

Speed matters: it will not be enough for businesses to recover revenues gradually as the crisis abates. They will need to fundamentally rethink their revenue profile, to position themselves for the long term and to get ahead of the competition. To emerge stronger, retailers should consider focusing on the following actions:

1. Identify and prioritise

What’s important is to identify the primary sources of revenue and, on that basis, make the ‘now or never’ moves that need to happen before the recovery fully starts. This may include launching targeted campaigns to win back loyal customers, developing customer experiences focused on increased health and safety, reallocating spending to proven growth sources, reskilling the sales force to support remote selling, creating flexible payment terms, digitising sales channels, and automating processes to free up sales representatives to sell more.

Adjusting pricing and promotions based on new data is also a crucial part of a retailer’s rapid revenue recovery strategy. For pricing leaders, the three most important areas to focus on are: being creative in meeting customer needs while preserving value, driving strong pricing discipline, and investing boldly in capabilities for the future.

Whatever the measures, once identified, they should be rigorously prioritised to reflect their impact on earnings and the retailer’s ability to execute quickly.

2. Act with urgency and speed

With a granular map of prioritised activities, retailers then need to quickly and decisively reallocate resources accordingly to capture growth. The focus should be on launching their biggest and most ready initiatives, whether that’s adjusting sales coverage models, tailoring product features to specific customer use cases, or shifting marketing spend to high-performing channels. The necessity of acting with urgency has allowed businesses to accomplish incredible things in short periods of time that would have seemed impossible just six months ago. They have demonstrated the agility of startups, an ability to look at their customers in new ways, committed to data-driven decisions, and had a relentless focus on iterative execution to continually improve. Maintaining that sense of possibility will be an enduring source of competitive advantage.

3. Develop an agile operating model

One important way to speed up decision making is to give agile teams highly focused tasks and clear key performance indicators (KPIs), such as click-throughs or open rates. Instead of waiting for approvals and input, these agile squads, which should include agency partners, have the ability to make their own decisions. In our current remote world, we’ve found people more able and willing to embrace agile methods, sometimes out of necessity but also because they are becoming accustomed to jumping on quick video conferences to solve problems quickly or make decisions.

The various squads are then assigned to specific areas of focus, from consumer/customer insights to digital marketing. For sales, that team could steward large and strategic deals and oversee execution, speeding deal review for impacted segments and maintaining discipline. Another squad could focus on developing a long-term view to avoid panic reactions and develop clear guidelines and objectives for the commercial team. These cross-functional teams or squads bring together people with key skills – data analytics, sales operations, design – tailored to the specific area and supplemented with additional experts as needed.

Research in May revealed that, in a matter of around eight weeks, consumer digital adoption vaulted forward five years as consumers are turning to digital and reduced-contact ways of accessing products and services. For retailers, this means rethinking how to connect with consumers. With data more important than ever, retailers will need to think how to use it to better personalise offers and messages to ever-narrower, and even localised, customer segments in order to gain a margin to manoeuvre and reinvest into growth.

During this pandemic, we’ve seen businesses working faster and better than they dreamed possible just a few months ago. Maintaining that sense of possibility, coupled with the steps above, will be an enduring source of competitive advantage.