6 Tactics for CPGs and Retailers to Cope with COVID-19

We have some considerations on how retailers, manufacturers and suppliers can optimize their operations in this era.

Sense360 is collecting daily survey results on why people are choosing particular retailers like grocery stores or convenience stores over others. We’ve found that some of the key decision drivers are things like closest location (which has traditionally been a most dominant factor even before the COVID-19 era), but also things like value are now playing a very important role. Other factors that are especially important now are having items in stock.

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We also surveyed to understand why people still use traditional purchase channels as opposed to some newer options like delivery or curbside pickup to purchase items from retail channels.

The most dominant reasons were that people want to be the ones to browse and select the items in-person, and they also want to avoid fees and costs associated with using these services.

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Keep these drivers in mind, because when we talk about tactics for retailers and CPG manufacturers to consider, these survey insights come into play.

Six Tactics for CPGs and Retailers to Cope with COVID-19

When we start thinking about tactics for CPGs and retailers to act on, what stands out to us is the notion that people are not choosing locations based on product quality and variety to the same extent that they're choosing based on inventory and convenience.

  1. Focus on top SKUs – less is more. While generally shoppers care a lot about quality and variety, now we’re in survival mode.  Few people care about the long tail of products and simply need something to make do, particularly in key categories that have been out of stock for weeks.  What matters now is getting shoppers what they need at retail.  Consider SKU rationalizations, eliminating the long tail of items for the time-being until we get to a more “normal” period of shopping behavior.  CPGs and retailers need to work quickly to re-write POGs to rationalize the slower-moving and in some cases niche products to ensure adequate space on shelf.

  2. Reduce Pack Sizes.  In the era of hoarding and stock-piling, an option for CPGs and retailers is to stock smaller pack sizes and minimize purchase quantities by customers.  This also has the added benefit of ensuring shoppers’ purchase cycles across categories aren’t further lengthened - it gets shoppers back into stores for another visit where they otherwise might not have. 

  3. Encourage delivery or curbside pickup. Stocking fewer SKUs may also help people decide to choose newer channels like grocery delivery or curbside pickup. We know that consumers are reluctant to use those services if they expect that certain SKUs are going to be out of stock, and they don’t want to leave it up to the Instacart or Walmart employee to pick a replacement. So fewer SKUs but more inventory for each of them can go a long way and instilling that consumer confidence in using those services.

  4. Implement efficiency measures. Labor has always been a precious resource at retail and is even more so now than ever.  Direct to store shipping for those manufacturers that can fill their own trucks is a more efficient way for product to get to the store faster and reduce labor costs.  Retail-ready packaging is another way to increase efficiency and help reduce pressure on in-store workers.  Retailers should incentivize their retail partners to increase production of retail-ready packs.

  5. Take reservations. Grocers are beginning to lift from restaurants’ playbook by using OpenTable to take grocery shopping reservations. This can decrease the inconvenience for consumers who may currently have to wait in long lines to get into grocery stores, or who may find that by the time they get there, the items they want are out of stock. This will become critical if more states plan to issue policies on maximum occupancy in a grocery store at a time, like the State of Connecticut has done.

  6. Forecast accurately. Using data to forecast which channels and geographies are most at risk for stockouts is a critical piece of understanding where and how to restock. Sense360’s COVID-19 Tracker shows you the regions and DMAs in which channel shift is occurring the most, with the ability to slice the data daily and even by daypart.

To learn more about the COVID-19 Tracker, please contact us to request a demo.