COVID Strikes Back – What’s Coming Next?
You know that feeling you get when you’ve been on too many roller coaster rides in one day? If you’ve been following the news for the last few weeks, there’s a good chance you feel that way right now. But let’s take a step back, and dissect what the latest events mean for the retail industry in general and CPG companies in particular.
Don’t worry. We’ll leave the drama to the
children politicians in D.C. and stick with facts. Whatever color of the spectrum you voted for, we hope you find this post helpful and informative as you plan your course for the next few months.
Three key trends are playing out right now
#1) Covid cases are spiking
In mid-April, when the U.S. was in full lockdown, new cases averaged around 30k per day. Right now, we are looking at 130k new cases per day, and that number is increasing. Granted, testing is more readily available now, but this is still bad news. So how will it impact the retail sector? More on that in a moment.
#2) Vaccines are getting closer
Regardless of whether you think masks are for sissies or you’ve been barricaded in a bunker for the last 8+ months, we should be able to agree that getting everything back to pre-2020 normal would be a good thing. Drug manufacturers hope to help with that, and Pfizer recently announced some promising results on a vaccine they are testing, followed closely by Moderna. The bad news is that even if approved, it will take months for a new vaccine to be manufactured and distributed around the country.
#3) Biden is likely going to be president in 2021
The preceding points make this extremely relevant. Biden has promised a more aggressive federal response to COVID-19, which will directly impact retail. Precisely what this will look like remains to be seen, but it is worth noting that Biden’s health advisors are talking about options ranging from another complete lockdown to more localized restrictions.
What’s coming next?
We don’t have a crystal ball, but here are our predictions on how these trends will impact the retail industry and CPG companies:
- Regional lockdowns are extremely likely as we head into winter
- Grocery and essential item sales will spike again (sales of clothes and other non-essentials will drop)
- Supply chains will be stressed, and Out-Of-Stocks will increase
- Consumers may respond by hoarding, further exacerbating the situation.
In a nutshell: If there was an ETF tied to toilet paper, we’d be buying it right now, as well as a few extra rolls to keep on hand. Normal isn’t a word that will apply to any part of 2020.
What should you do about it?
CPG companies need to honestly evaluate their performances from spring and plan how to respond to the sequel. If you struggled to keep your supply chain intact and products flowing onto retail shelves, this is your chance to address any issues related to On-Shelf Availability.
Many of our clients who were able to dispatch their own teams to help keep items on shelves were embraced by store managers. In some cases, they were able to pick up significant incremental shelf space as missing items from other brands were moved out of prime positions.
Ensuring continuity will help accelerate your growth and ensure you can meet a surge in demand while retailers and supply chains work on getting back to full capacity. By using integrated POS data, you can get your reps into the right stores at the right times and deliver a strong ROI during periods of crisis and in subsequent months.
If you have not begun to reshape your approach to execution yet, now is the time to get started. Don’t enter the coming storm unprepared. Let’s have a conversation about how we can help you continue to succeed in 2021 and beyond.
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