The global crisis has amplified the challenges of retailing. Since at least March 2020 347 American companies They cited the pandemic as a factor in their decisions to file for bankruptcy. Among them was the Guitar Center, whose executives said e-commerce sales could not replace the experience of musicians trying the instruments themselves. Some companies are finding new ways to weather the crisis – or perhaps their exit from the crisis is better than it was when it started. In 2021, many retailers seem ready to change the way they do business.
MIT Technology Review Insights, in collaboration with Oracle, surveyed 297 executives, primarily financial executives, C-suite, and IT leaders, about their organizations’ plans for big business moves. These include new business models, mergers and acquisitions, and major technological changes, such as the automation of financial processes and risk management.
According to the research, 83% of executives across industries are optimistic about their company’s ultimate goal for 2021, and they expect to thrive or transform – i.e. sell more products and services, or adopt new business practices or sales methodologies. Overall, 80% of organizations made a big move in 2020 or plan at least one organization in 2021.
The road ahead is for retail
The shopping process will be different in 2021, says Mike Robinson, head of retail operations at The Eighth Notch, a technology platform connecting shippers and retailers, and a former digital entrepreneur at Macy’s. Among the difficult questions to answer retailers ask: “How can stores reassure people that it is safe to return to gathering in places again? How can consumers trust that the store is doing the right thing from a hygiene perspective?” Nobody has specific answers, as Robinson points out, but at least they ask.
Other Special Areas of Interest for Retail Organizations in 2021: Consumer Cybersecurity Risks and E-Commerce. As cyber attacks become more and more daring, retailers have to think about how to protect their data, starting with preventing credit card fraud. While this is important to any consumer company, Robinson says, the data protection challenge has an added resonance for retailers. To deliver better and more personalized customer experiences, retailers need to collect more data for analysis, which exposes them to more data breach risks.
The supply chain – manufacturing, shipping, and logistics – is also a major issue this year. The strain started appearing in 2020, When an epidemic shutdown spreads around the world, exposing weaknesses in production processes and supply chains. The trade war between the United States and China has prompted many companies to look beyond China to Southeast Asian countries such as Vietnam or Thailand in search of production partners.
The supply chain is not just a financial concern. Robinson says ethical sourcing and manufacturing is becoming more and more important as consumers raise expectations about sustainability and worker safety. “This will continue to be more and more important as we move forward,” he adds.
Wealth favors the bold
It’s hard to plan long-term during times of volatility – but that’s exactly what most companies do across industries: More than half of the organizations surveyed will increase their technology investment in 2021, and 40% plan to move IT and business jobs to the cloud (see Figure 1).
In some cases, the 2021 strategic plan is simply the condensation for more business. Booming companies selling offices or mills Sport pants You don’t need to change their business models. Due to increased demand at a time of increasing telecommuting, these retailers only need to adjust their manufacturing processes and work on the logistics of shipping.
Adapting to a new world, however, means being open to new ideas. Business leaders ready to transform the company need to rethink everything: business models, product development, marketing processes, fulfillment, and metrics for success. As a result, 87% of organizations that anticipate business transitions in 2021 have some type of big move planned.
Robinson thinks it’s time to be bold, and retailers know that. “People will be rewarded for taking the risk and may be forgiven if it is imperfect,” he says. When you are outside of the usual options, try the unusual options.
“It wasn’t just because of the Covid disease that the business stopped working,” says Ashwat Panchal, vice president of internal audit at the shoe retailer Skechers. “We are in the process of expanding our distribution centers. We are working to increase our footprint in e-commerce. We are implementing new point of sale systems. We are expanding in new areas.”
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This content was produced by Insights, the dedicated content arm of MIT Technology Review. It was not written by the editorial staff for MIT Technology Review.