Benefits of customer flexibility during the pandemic

Posted on August 19, 2020 by aviyer2010

An article in ASCM Insights (https://tinyurl.com/yyneu93x) describes reasons why retail grocery customers might be stockpiling.  The article suggests that retailers should deal with each reason separately, with appropriate steps to reassure customers.    There is also discussion of smaller retailers and their opportunities to be competitive. If customers demand free delivery, due to their Amazon Prime expectation, how should retailers compete ? Who should pay for the store labor costs associated with curbside delivery to customers ? How many of these online customers will remain in that mode as the pandemic worries decrease ?

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106 Responses to Benefits of customer flexibility during the pandemic

  1. bmyczkow says:
    August 25, 2020 at 6:03 pm

    The interview highlights the importance of store to customer relationships, especially in the smaller business sector where the stores can be more personal and more direct with their customers. However, this customer relationship should not be overlooked even for the bigger retail giants like Target and Walmart. According to the article, one of the primary methods to retain customers and keep people from panic buying is to continue to operate the visible aspect of the operation as normally as possible. In other words, if Walmart continues to operate as normal, with stocked products, and the same prices, customers will be less likely to buy excessive amounts of goods, which in turn will lead to more stable supply chains. What the customer won’t see is that these stores need to change their logistical operations to better match the demand, increasing truck loads, using stocked inventory, and most importantly cutting their margins so as to avoid depleting their supply chains.

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  2. cpeplin21 says:
    August 25, 2020 at 6:14 pm

    If customers demand free delivery, due to their Amazon Prime expectation, retailers will have to compete to reduce costs in other areas of operation. The article discusses automation and robotics for large retailers like Walmart and Target but other areas need to be considered as well. For example, a lot of food in the US is wasted. During the pandemic we saw farmers dumping out produce because they had no place to deliver it in their supply chain. Solving an issue like this, albeit a long-term solution, with a platform to connect farmers and retailers could help reduce the costs of produce and therefore give retailers the opportunity to recover the cost of providing free shipping and labor costs associated with curbside delivery. Even as pandemic worries decrease, it is likely that the demand for services such as free delivery and curbside delivery will continue to be there. It is not very often that you hear somebody say that they enjoy spending time going grocery shopping. It is a huge convenience for consumers to save time, so retailers really need to take a deep dive into determining how to recover these costs without increasing prices to the end customer.

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  3. MW Li says:
    August 26, 2020 at 12:13 am

    During the pandemic, the business mode has been changed dramatically from in store to online.
    Retailers should face the challenge per different reasons. Supermarket and grocery stores are experiencing peak time while the restaurants or other business got a huge heat because of stay at home order nearly frozen. If customer will to have free delivery due to Amazon Prime, the retailers can choose requiring minimum order value for free shipping which will increase sales and then improve the margin to cover shipping costs. This is the worst time but also the best time. The challenges can be the turning point since it is also a good time to collect goodwill. Transform store business to online business gradually is the trending. From the stand point of customer, they just need to click the mouse and browsing online to get the order which save much more time and convenient in a sense. Maybe they will purchase more when comparing going to store since they spend more time online and surfing the internet.

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  4. Sheng Yu says:
    August 26, 2020 at 5:31 am

    When talking about free delivery due to their Amazon Prime expectation, first we have to understand Amazon Prime is not free delivery – Amazon Prime does cost and might cost more than delivery fee if customers are not placing orders frequently enough. Amazon offers much less product in the grocery department – especially when we talk about live lobster, local chicken, and prime ribs, and the two-day delivery means ordering two days ahead – not always applicable when you are on your last roll of toilet paper. That’s how retailers can compete – offer those goods and offer same-day delivery while spread the cost through smart solutions. Collecting orders throughout the day and use only one full truck to deliver the goods, charging membership fees, or creating new demand (thus bringing new profit) through delivery service – those are some good solutions for example.
    It doesn’t matter who’s paying for the curbside delivery because the cost would ultimately be reflected on the grocery bills. However again smarter solutions can be applied – maybe let in-store salesperson be the curbside delivery guy to sell their products?
    And when talking about online customers – with the current delivery system in the US I highly doubt online shopping would be preferred after the pandemic. 2 days waiting time would be far too long for groceries, not to mention most goods take about a week to arrive. If the supply chain can not cut down delivery time, stores and retailers would still take those online businesses back once the pandemic is quiet down.

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  5. Adam Hupp says:
    August 26, 2020 at 11:38 am

    Customers have increasingly high expectations for delivery time and cost. Large retailers such as Walmart and Target have the scale and resources to compete on quick delivery and free shipping, but this is much more challenging for small retailers. However, small retailers have the option of selling on platforms like Amazon, and this is the easiest way for them to gain a wide audience quickly.

    New services like curbside delivery will be difficult to sustain without increases in revenue that make up for smaller margins. If free pickup enables Walmart to draw customers who previously shopped at competitors, then curbside can generate incremental revenue. Even at a lower than normal margin, this is still very beneficial for Walmart. However, if most of the curbside customers were already Walmart customers, then this results in lower margins for Walmart’s existing customers. (Though this service may still be necessary to prevent them from switching to a competitor.) There is a strong possibility that many customers will stick with curbside delivery in the future because of the added convenience. As this service remains in use, companies can make up for increased costs through increased automation, tailored product recommendations, and streamlining the process of trailer-to-curbside delivery.

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  6. Yuchen Zhang says:
    August 27, 2020 at 9:23 am

    The retailers should differentiate themselves with Amazon to survive as they do not have the same scale and capacity. In rural areas, there is no grocery delivery from Amazon and that is what local retailers should focus. They can add additional logistic cost to the products and still offer “free” delivery to customers. During pandemic, customers would not mind the extra cost to have the convenience of grocery delivery. Also, the local retailer can encourage the customers to subscribe the grocery with the benefit of free shipping. This can generate continuous and stable revenue.
    It would always be the customers who pay for the cost of additional service because they benefit from it. Those customers will always purchase in large quantity thus they would not mind paying extra. The curbside delivery is time-consuming for the store’s team member; therefore, they should be compensated. The additional service enables the customers to have alternative ways and they can choose based on their preference.
    If the pandemic worries decrease, online customers will remain in that mode because they still worry about other uncertainties. The pandemic just accelerated the process.

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  7. Rustam Kalimzhanov says:
    August 27, 2020 at 2:37 pm

    Amazon Prime is a unique business function offering by Amazon, whose business was focused on e-commerce and delivery of goods long before the pandemic. Therefore, the purchase of its “fleet” of trucks came on time for the company and for consumers. However, if we look at the very value that customers need now, rather than delivery, we see that Walmart is also competing with Amazon, offering customers to pick up the goods themselves, without contacting a large number of people in the store. it can be cheaper for businesses to compete by offering their customers their own solutions that deliver value within their capabilities, rather than copying Amazon’s business model.
    Unambiguously, someone must pay for the resources spent on the delivery of goods. But who? I agree with Professor Ananth Iyer that the price for customers cannot be raised. Of course, the goodwill that a reliable company earns by just-in-time meeting the needs of its customers is much more expensive. And, we see that people are willing to pay for it. Over the past year, the price of Amazon and Walmart shares has increased significantly, by 92% and 23%, respectively. Thus, companies have the opportunity to offset their costs with the help of investors.
    It is very difficult to predict how many customers will continue to buy products online. But we can say with confidence that the vast majority of Purdue students, for example, choose to study on campus. Therefore, in my opinion, the human desire for real social interaction is still very strong. Thus, I believe that after a certain amount of time, the ratio of online and offline sales – with minor changes – will return to the level, which was before the pandemic.

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  8. Szu Han Huang says:
    August 27, 2020 at 5:07 pm

    In the interview, we realize that what E-commerce benefits customers most are quick and free delivery. It provides the customer more safely way to shop during COVID-19 period. I agree with that it may cost a lot for a retailer to develop E-commerce. It also requires lots of data to optimize the best shopping experience for the customers. If the retailers don’t leverage well, they might lose the market again. However, I think retailers such as Walmart and Target can still take their advantages to serve the customers. For example, they can sell a kit or do some promotion event. Furthermore, they can strive for providing a safe environment for the customers to shop in person.

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  9. laford says:
    August 28, 2020 at 11:51 am

    If customers start to demand free shipping because of their Amazon Prime shipping expectation, then other companies will have no choice except to provide free shipping. Without this “price matching” system for shipping, consumers will be less likely to order from a companies ecommerce platform. To ensure they don’t keep missing out on potential customers free shipping will need to be offered. Who ends up covering this shipping cost? I believe that the retailer is responsible for covering the cost of curbside delivery and free shipping. To have an efficient supply chain the increased use of robotics and automation has helped cover some of these costs, but much further analysis is still needed to know what areas of their supply chain need to be improved. I believe that this mode of purchasing goods is here to stay in our market for a long time, so the amount of customers that will be utilizing the curbside pickup will increase.

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  10. Zihan Lin says:
    August 28, 2020 at 12:05 pm

    Compared the Amazon prime free delivery and delivery options that provide by other retailers, people need to purchase membership to get Amazon free delivery service and this cost may slightly increase the margin of the product. While, during the pandemic, the other retailers need to consider how to increase turnover rate through delivery and reduce cost as much as possible instead of increasing any price.
    From this interview, large retailers such as Walmart can also provide online order and free delivery as a new marketing channel to achieve more customers. Also, using automation and intelligence can be an approach to lower the labor cost and raise the efficiency since the retailers need to pay for curbside delivery costs. But customers need to follow the settled pick up time slot. When the pandemic worries decrease, I think customers will still prefer the curbside delivery. The curbside delivery provides convince for customers and lower much time that spend on grocery shopping.

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  11. Jorge Chamorro says:
    August 28, 2020 at 4:37 pm

    Retailers can afford the added cost of curbside and e-commerce offerings by reaching enough scale so that the labor cost per order is reduced. To do so, retailers will have to be creative to stimulate the demand. Some of my classmates have mentioned the benefits of immediate availability retailers have compared to the usual two-day delivery in e-commerce platforms. Also, the economies of scale could allow them to operate in tighter margins and keep prices low.
    I think the proportion of customers buying in the e-commerce (or curbside) channel will decrease after the pandemic worries decrease. There are several conveniences related to in-store purchasing that e-commerce is yet to provide.

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  12. Shrey Bansal says:
    August 28, 2020 at 5:42 pm

    For better or worse, the U.S. economy and the global economy are in the throes of the “Amazon Effect,” a term used to describe Amazon.com’s success, which has upended retail practice and customer expectations, both online and offline. The online retailer’s vast selection, fast shipping, free returns, low prices and “Prime” subscription service all serve to create high customer expectations for any retailer hoping to compete.
    In order to remain competitive in terms of free delivery, large retailers should bear the additional labor or any associated costs to ensure best customer experience. Small businesses, who do not have huge capital as compared to large businesses, can interact more closely with customer to understand their demand requirements and ensure they have sufficient inventory to satisfy demands in order to remain competitive.
    Any kind of additional cost to the business is paid by the end customer. However, in order to be in the game, the retailers need to compromise with their margins to offer free curbside delivery to the online consumers.
    Although it is difficult to forecast how many will remain in online mode post pandemic, it is most likely that a large customer segment would go out to buy groceries because delivering such orders sometimes takes days. So, there is a trade-off between convenience and waiting time, which depends on customer-to-customer.

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  13. Zi Wang says:
    August 28, 2020 at 8:41 pm

    Compared with large companies such as Amazon, smaller retailers have the advantage of ‘specialized’ and more interaction with customers. Before considering the delivery issue, smaller companies need to think about which products are able to attract more loyal customers under pandemic, and this is where the main competence comes from. Because of the long tail effect, it’s important for them to continuously find their own niche markets, such as local brands or unique products (Asian Market) and fresh vegetables (Fresh Thyme Market). It would be difficult for smaller retailers to offer free delivery service because of cost even though they reduce the staff and operation cost, but they can offer a delivery service at a reasonable fee. Depend on customers’ requirement, companies need to keep track of their product flow and make sure enough products are procured.
    Pandemic pushes people to change lifestyle and I think those habits may remain even after pandemic especially for those middle-aged and elderly people. Although some products are not proper to buy online, many people have been experiencing the convenience of shopping life necessities online. On the other hand, more companies are thinking out ways to deal with “The Last Mile” delivery aiming for fresh food. To a great extent, pandemic is a catalyst for social change.

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  14. yujintao says:
    August 28, 2020 at 11:06 pm

    The article indicates that during this pandemic, retails may face some difficulties due to the increase of customer worries and uncertainty. For big retailers like Walmart, they can put emphasis on their online service and respond quickly to the change of demand in the stores. For small retailers, they may face a much more pressure on how to survive. In order to be competitive, they need to figure out who are their main customers and what they will buy. That’s why they need to use software tools to help them track the inventory information and understand customer data.
    As for the cost of delivery, it’s much more complex. In order to attract customers, retailers must offer free delivery, just like Amazon Prime. So, the cost must be paid by retailers themselves. But, they can set minimum consumption to reduce that cost and make customers buy more products. As time goes by, the pandemic will be under control and life will become normal again. Then people who purchase online will decrease. The cost will go down with it.

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  15. Haowei Lai says:
    August 29, 2020 at 11:01 am

    As described in the article, customers are stocking supplies like toilet paper because of multiple reasons such as concern for shortage and concern for price raise. In order to reassure customers, measures should be taken to confront these reasons individually. When customers demand free delivery, retailers more often than not have already included the expected delivery fee into the price of the product. For a few e-commerce business owners I know, free delivery often comes with restrictions for customers such as ordering above a specific amount, or the item’s price already included the average expected logistics cost. Because large platforms like Amazon usually have a lower cost in shipping, it is only possible to compete with them when a retailer offers faster, local delivery but it will be restricted to a certain region geographically. The end customer will always pay for the cost associated with curbside delivery.As e-Commerce became widely popular during the pandemic, customers will have more alternatives for retrieving products, and individuals choosing the style of mixing online and in-person will increase.

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  16. Vincent Coltellino says:
    August 29, 2020 at 11:21 am

    Humans have a mental barrier to overcome in the face of negative effects. For example, when plastic bags were beginning to get phased out in retail stores, the impact of charging people 5 cents per bag was much greater than giving the same discount for every reusable bag used. Functionally, the financial difference was the same yet people who were charged the 5 cents per tended to use reusable bags more often. It is clear that negative consequences are more impactful than positive ones in regard to human behavior, so although the consumer has a lot to gain from curbside pickup and various delivery services, they will likely latch onto the fact that they are being charged extra for the service.

    With that being said, as Dr. Iyer mentioned in the article, people tend to behave rationally. I would like to think that a part of rational thinking is knowing that goods and services have associated costs, and that being charged a fee for additional service is logical. This may be more relevant in association with small retailers where people have more of an emotional investment into their success. People have an understanding that smaller retailers have limitations that may raise the price of goods and services, yet they still shop at the local store and pay the premium. I do not know the answer to this question, but could it be that they would pay the premium for shipping/curbside delivery at one of these smaller retailers allowing the labor costs to be covered? Like many people mentioned, these small companies don’t have the resources to automate and cut costs like the Amazons and Walmarts of the world.

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  17. zhixinli says:
    August 29, 2020 at 2:36 pm

    We all understand that it is relatively difficult for local small businesses to survive and compete against large-scale e-commerce companies such as Amazon. While Amazon is serving globally, the local business could aim to serve the local communities with a one-day direct store to home delivery. To cover the costs, local businesses could charge a reasonable delivery fee but should ensure the quality and efficiency of their service. Just like what has been mentioned in the interview, small business owners should understand customer needs. In terms of curbside delivery, this is very common in large-scale businesses like Walmart. Because people are reluctant to go out during the pandemic, the in-store workload has been significantly reduced. Businesses could assign some staff taking care of curbside delivery, but it would always be customers who pay for that cost. But at least Walmart has given the right to customers to shop in-store. Therefore, customers could weigh the pros and cons and shop the way they preferred. As the pandemic worries decrease, I assume that most people would turn back to the traditional in-store shopping, at least for groceries. It would be a nightmare to wait for your milk and bread to be delivered in 24-48 hours. But for large-size commodities such as tables, bed mattresses, and TV, most people would prefer to buy them online since e-commerce provides discounts and lower prices more frequently and it is way more convenient.

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  18. tiandai says:
    August 29, 2020 at 3:29 pm

    In the current situation, it may be difficult for small retailers to provide services that can compete with large companies (Walmart, Target), such as free shipping. However, small retailers can actively communicate with their customers from the perspective of understanding customer needs, enhance customer confidence, and share information with customers in a timely manner. Under normal circumstances, the additional customer service provided by the company can always be reflected in prices. However, facing the special circumstances of the epidemic, consumers are more sensitive to prices than usual. In this case, you need to be very cautious when choosing a price increase. The alternative is to compress one’s own profit margins and give up part of the profits to ensure the stability of the supply chain and ease consumer anxiety. I think that due to the long duration of the epidemic, even after the pandemic is over, many consumers who have adapted to online shopping will continue to maintain such consumption habits.

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  19. Zhewei Tao says:
    August 30, 2020 at 2:01 am

    Post by Zhewei Tao

    Due to the differences of business scale and capacity, small retailers are facing more challenges than company like Amazon does. However, it doesn’t necessarily mean that smaller retailers are going out of business. They can transfer their own unique characterizes into advantages comparing to larger scale retailers. For example, local retailers have better and more interaction with suppliers and customers. They might can come up with some curbside pickup service by taking either phone call or online orders. Under this condition, suppliers can have certain goods ready before sending those to the shop and customers will only need to show up and pick up at certain place in each window. Like professor mentioned in the article, it’s getting more and more important for smaller retailers to retrieve data from their customers. If they can further understand customers’ direct needs. Then those smaller retailers can sell products direct to them with less operation fee and less advertisement fees. With this lean supply chain, more upside profits can be expected. Also, if local retailers are expecting to expand their business during the pandemic. It might be a good idea to use the platform offered by bigger companies. As for the store labor cost, I believe most of the people understand the current pandemic situation and they don’t mind pay bit extra if they need to maintain their basic safe living level, so it’s reasonable for them to pay this part of money. If the vaccine can be produced soon in later this year, more people will feel confident to shop physically and thus online sales will decrease along with the cost.

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  20. chizhang says:
    August 30, 2020 at 2:18 am

    The interview mentioned people it is important for the smaller retailer to have a relationship with customers when competing with large companies like Amazon, but small retailers may not have enough budget for building a software-as-a-service tool or platform which is expensive. Popular social media such as Twitter or Instagram would be a better choice for small retailers, they can give their customers some gift after customer followed their social media account and update their inventory in the social media every day. So small retailer can have better interaction with their customers and customers will stop stockpiling after they know there are enough inventory. Besides large companies such as Amazon only provide their two-day delivery to their Prime membership which is not cheap for the. However local small retail could provide two-day or even one-day delivery without membership charge, and they can charge different amounts of delivery fee depending on how much customers order to cover the cost associate with delivery and encourage customers to buy more products. After the pandemic, I think a large number of customers will remain in that mode, the majority of people are preferring more convenience life, it like people who drive Tesla and use autopilot for a long time will not go back to traditional cars

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  21. Mathews Oommen says:
    August 30, 2020 at 2:21 am

    In order to compete with the likes of an Amazon Prime, retailers can offer free delivery for a minimum amount of goods purchased. They can join hands with Uber, Lyft which has the required infrastructure to carry out the delivery. There will be an additional cost associated with the delivery, but it can be covered in the long run with more customers and purchase orders.
    At this time of the pandemic, it may not be wise to increase the costs of the customer in order to meet the increased expenses of the retailer. Rather, a cut in the profit margin should meet the expenses. The goal of the retailers should be to stabilize the supply chain rather than to increase their profit.
    Even when the worries of the pandemic decrease customers may stick to online purchases due to the flexibility it allows. Hence, any investment made in that aspect will be beneficial to the retailer in the long run.

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  22. hu431 says:
    August 30, 2020 at 2:19 pm

    The interview mainly talks about the effect brought by COVID-19 from two aspects, large business and small business. For big retailers like Walmart and Target, they applied e-commerce to satisfy customer expectations, because the product is out there. Thus has the cost problem, because the worker is doing the work that customers used to do by themselves. And for small business, understanding customer data is the most important. This means that small business retailers would want to build relationship with customers, could predict what product customers will be looking for when they come in to the store. Since small retailers could talk to customers face-to-face, the relationship would allow small retailers to know more information about customers. Thus, it is important to keep people coming to the store, and thus they would have a lower margins in order to survive in the long run.
    If customers demand free delivery, customers would be happy because it is free, however, all that free delivery added costs to retailers. To reduce cost, i have the following suggestions: paying member fee in order to have free shipping benefit as a lot of companies did, or set up a bottom price.
    And i think it is hard to say who should pay for the store labor costs associate with curbside delivery. In my opinion, the retailer offer product and service along with the product as a whole to customers, and thus customers are paid for not only the product, but also the store labor service cost. And thus customers paid store labor service cost from this prospective. However, labor cost is considered under the cost of the company, which means that labor cost is paid by retailers. From my opinion, i would say that the company paid store labor costs directly, while customers paid store labor costs indirectly.
    As pandemic worries decrease, i think that online customers would decrease slightly rather than significantly, because it is hard to change when shopping online has become habitat. People are used to shopping online, it is convenient, and you could receive what you want without going out.

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  23. Antoine Minier says:
    August 30, 2020 at 2:36 pm

    If customers demand free delivery, due to their Amazon Prime expectation, how should retailers compete?
    Retailers need to invest heavily in technology to offset of the cost of the delivery. Indeed, during a pandemic, it is very difficult for retailers to increase prices because people pay more attention to their finances. However, home deliveries create several cost for retailers like preparing commands and the logistic to deliver commands. Because it is a new market for retailers, they should try to corner this market by being the most competitive and therefor propose the best deal to the customer even though it implies to lower margins. On the long run, by gaining experience in this field and creating a pool of regular customer for their delivery service, retailers will be able recover some of their loss when the pandemic will be under control.
    Who should pay for the store labor costs associated with curbside delivery to customers?
    As explained previously, retailers should absorb those cost at the beginning and try to reduce them as much as possible.
    How many of these online customers will remain in that mode as the pandemic worries decrease?
    The number of online customer will decrease when the pandemic decrease but I think that because of this new service, retailers will be able to attract new customers for the long term and therefore make their investment worthwhile.

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  24. Robert Waggoner says:
    August 30, 2020 at 3:01 pm

    The pandemic brought forth many challenges for retailers such as demand forecasting, shortages, supply chain operations, health and safety regulations, etc. specifically noted throughput the interview. Looking back, we should really appreciate the great success the large retailers such as Walmart, Amazon, Target, Kroger and others were able to have. Even with the hardships of the pandemic, basically all of the top retailers had enormous gains in revenue and profit, regardless of the extra costs of dealing with the virus. Walmart for example, not only destroyed analysts forecasts on revenue, but also killed it in EPS and ecommerce sales over the last 2 quarters. It will be interesting to see how the Brick and Mortar retailers compete with Amazon in the coming years, now that many of them are adopting new free pickup and delivery operations at majority of the locations. Sales are definitely showing growth in ecommerce for these companies thanks to the pandemic, and a lot of these sales are from customers who don’t regularly shop there.
    As for smaller retailers it will always be difficult to compete with the big stores, however there is still hope for success. As mentioned in the interview, Implementing better information systems for inventory control and focusing on customer relationships can make a huge difference for these stores.

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  25. yutzu_huang says:
    August 30, 2020 at 4:06 pm

    In the article, the key of the solution in the pandemic time right now is to maximum the margin despite extra cost caused by protection steps, such as full truckloads, scheduling third-party pickup, investing e-commerce/automation. The company should find out the data or think how the customers will think. Small business which have less resource and supplier connections can be harder to complete with bigger companies. As long as their whole supply chain is running full, this time can be brand exposure opportunities for them.

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  26. Shannon Hadley says:
    August 30, 2020 at 4:16 pm

    It is no longer an “if” customers demand free delivery because of Amazon, because they do and this is not new and it’s not going anywhere. Because customers are demanding free delivery from retailers, the most common way to address this is to build the labor/shipping cost into the price of the item. Customers will happily pay $30 on amazon with free shipping, yet still complain about a $5 shipping fee on a $20 item. While it is not practical to raise the price for something to be shipped freely to customers during a pandemic, higher demand has forced prices on essentials to rise for them to even have a spot in the store while many customers may not fully understand the reasons behind that raised cost. The cost of shipping has to be incurred somewhere, in a customer’s mind a $2-$3 more expensive product with free shipping is better than a $2-$3 less expensive product with $2.99 shipping. For larger retailers, the shipping costs should be incurred by the customer; they are already paying for it without knowing it on a regular basis. As for smaller, single location businesses that are recently adding options for delivery and online ordering due to having to adapt to customer expectations in the midst of a pandemic, seeing a service or delivery charge should not be shocking to a customer who is aware of this new service meant to keep the business afloat during a pandemic.

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  27. Atharva Sabnis says:
    August 30, 2020 at 4:25 pm

    While Amazons and Walmarts leverage AI and other algorithms to predict and even manipulate customer demand, small stores and their closer ties with customers can indeed be used as a way of calming customer panic-buying by either having inventory on shelf or a quick chat reassuring availability of their preferred products. What is crucial for these small retailers is that even if they can’t have more product variety, customizations, free deliveries and returns, they have a connect and customer loyalty backing them. If they can be temporarily prepared to absorb a smaller margin and yet function at maximum efficiency, they will maintain or even grow customer goodwill by providing deliveries or curbside services.
    When the prices go up, it is perceived as a decline in availability of products, which further causes panic buying and aggravates issues. So, charging the end customer with the cost of services during a pandemic would not be the right way to go. However, a one-time fee like the one by the online Walmart Grocery, is seen as a service charge/convenience fee and hence, could be used to balance out the cost of additional services.
    There is a lot of resistance among customers who have been accustomed to buying their own groceries in the store, and despite circumstances, and availability of services like curbside or delivery, these customers still prefer shopping in-person. However, a large segment of people who prefer an online cart over a physical one would continue with online deliveries as it saves time and improves planning and visibility. The only challenge would be balancing the cost of these services against their demand.

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  28. Miheeth Gala says:
    August 30, 2020 at 4:51 pm

    The major point for all business right now to remain in the market is the 4th C – competitiveness. It is a call for small businesses to decide whether to reduce margins and stay business, hoping for normalcy or to shut down businesses. I believe customers have got used to free delivery, curbside pick up etc and will continue to expect the same even after the pandemic ends. Large players such as Walmart might be able to suck all the losses, but small businesses have a grave concern of finding out solutions. The best option for these retailers is to clubbing products and selling as packages. In this way, although the margins are less, the products sold would be high. Packages should be formed wisely and may be one product out of 5 products in the group could be a little costly which covers the cost for the rest. Retailers have to analyze the current demand of products and customer demand to decide on packaging different product together. This idea of kind of turning the business model to wholesale and increasing the number of items sold seems like the most plausible and best option out for the retailers currently. In this way there is a chance that retailers

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    • Miheeth Gala says:
      August 30, 2020 at 4:53 pm

      … might be able to continue to survive the pandemic and be able to fight their way out in the highly competitive scenario. Thus these small retailers will be able to fund their expenses of curbside delivery or free deliveries.

      Reply
  29. Wenzheng Jiang says:
    August 30, 2020 at 4:57 pm

    Post by Wenzheng Jiang,
    This article provides some valuable suggestions and details for retailers. It’s important to keep customers flexible during the current pandemic. Retailers need to study customer data and needs. On the premise of survival, profit reduction is acceptable. In addition, Amazon Prime itself requires membership fees, which retailers may learn from. The end customer will pay for the store labor costs associated with roadside delivery. In the current pandemic situation, many people will continue to buy online.

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  30. Aishwarya Marreddi says:
    August 30, 2020 at 4:59 pm

    If the customer wants free delivery, the retailer has no option but to offer it. In today’s competitive e-commerce sites if the customer satisfaction which would bring in new or even continue the existing customers. If free shipping is what they expect, it is better the provide it and find a way to sustain by compensating those costs else where. With the internet at the disposal to customers, they would always compare and buy a product. So, to keep the customer satisfied must be given top priority or else the business would not sustain.
    To hold on to the customer it is better that the store pays for the curb-side charges. With the pandemic situation, the restaurants have cut down/shut the dine-in options. Maybe the resources which were previously deployed can be shifted and utilized here. With almost everyone’s household income going down now, customers would really appreciate the prices remaining constant. The store gets to keep another loyal customer.
    Online shopping which was a comfort way of shopping has turned into a necessary mode now. These high numbers which we see now, may or may not continue but it is for sure that this impact is to carry for a at-least a couple of more months if not years. It is essential for businesses to gear up continuously and have sufficient stock available to meet the demand. Customer demand is rational. Even if it is not through online, the stock will be sold else where. We will have to wait a little longer to see how the new normal looks like and see how the numbers would settle down.

    Reply
  31. Subhadarsini Prusty says:
    August 30, 2020 at 5:53 pm

    Although automation, robotics, and big-scale logistics collaborations are options for big retailers like Walmart and Target, the small retailers don’t have the flexibility to undertake these initiatives because of the cost that comes with these. A few ways the small businesses can still compete with giants without sacrificing margin:
    • Deliver excellent customer service & personalization at all stages of buying. Focus on selling experiences rather than just products
    • Make the entire process of shopping easier and more convenient, include rewards & offers to build long term relationships
    • Build a community, an open space where people can come together and share their experiences
    • Hone in on niche products that customer would want to experience and that’s exclusive to just you

    Reply
  32. Achraf Lokmani says:
    August 30, 2020 at 10:08 pm

    Any small business that hopes to stand a chance of surviving this pandemic needs to be willing to absorb the costs of offering free, flexible delivery and come up with a game plan on how to recover those costs in the long run. The e-commerce customer, which many of us have become these past several months, will turn to other big-box companies or even smaller businesses who have decided to offer free delivery.
    When a business starts thinking about biting that free delivery cost up-front, there are a few things to consider. Firstly, Prime does have a yearly subscription fee, which also includes the benefit of having no minimum order amount to qualify for the free, 2-day shipping. The small business may have to strike a balance between free curbside pick-up with no minimum order and requiring a minimum purchase amount for free delivery in the hopes of mitigating some of the lost margins. After all, popular grocery delivery services like InstaCart charge delivery fees and also allow customers to tip their shoppers, so a small minimum amount for free delivery may not be so off-putting to customers as one might think.
    Ultimately the cost for this service needs to be eaten by the small business until they are able to resolve their lost margin long term by investing in something such as software-as-a-service option or partnering with a service such as InstaCart.
    After the pandemic, it’s likely that the need for on-demand delivery will wane for many small businesses so it is advisable for businesses to be willing to accept the lost margin for now and struggle through these times with the assumption that in-person shopping will resume in time.

    Reply
  33. Aman Pawan Arora says:
    August 31, 2020 at 8:48 pm

    Customers’ increased need for product during the pandemic should be taken in a positive light by the retailers both big and small. In case of big retailers, since they have inventory cover of 80-120 days in the supply chain, the challenge is to ensure that the inventory moves across the chain faster than before. This might mean that individual stores order LTL so that they are more responsive to customer demand and this leads to lesser margin, and this is the time to accept this lower margin to ensure the topline is as high as it can be. For smaller retailers, since they interact with the customers and understand them better, they should again ensure availability of inventory although they might have higher logistical costs due to lower volumes. At the same time, providing confidence to customers is crucial to reduce this panicked demand over time. As far as free delivery is concerned, that is now the baseline for customer satisfaction and every retailer needs to offer that and ensure the perceived value of goods is such that they’re able to recover the delivery costs in the long term

    Reply
  34. hsuehmouhuang says:
    September 1, 2020 at 1:25 am

    It’s getting more and more important of e-commerce and data information to retailers. Amazon and Walmart have developed a strong and advanced system to deal with data so that they can keep track of the actual market demand and respond it quickly. Even investing in e-commerce is the expensive thing and probably they can not make ends meet in short term, retailers are going to meet demand effectively and efficiently in long term because ones who can meet actual demand will get better in their profits. However, we must notice that retailers are going to catch up with e-commerce because sometimes when we want to place an order to some items, we find that it is actually out of stock. Therefore, just like professor said, product is a real things that we should care more about how to make product always become available and not just invest in building a cutting-edge system but mismatch the products and e-commerce.

    Reply
  35. Karun Nambiar Manikoth says:
    September 1, 2020 at 1:50 am

    If customers demand free delivery, due to their Amazon Prime expectation, retailers have to react by dropping operating costs to match. The demand increased for certain products increased significantly during the pandemic, and the expectation for free delivery did not change. Retailers have to find ways to compete and ensure business. Large retailers like Walmart may not suffer in this sense, due to their large resources and customer base. Small retailers may suffer, so a suggestion could be to move onto Amazon’s platform, to utilize their large customer base to meet their operating costs. It’s difficult for small retailers to compete with large retailers who offer free curbside delivery.

    Using automation and robotics can help lower labor costs in the long-term and improve efficiency, meaning small retailers can then use the savings made to provide free deliver and/or curb-side delivery. But there will likely be other areas of operations in the supply chain to improve as well to meet those delivery costs.

    I do believe it will take time, well after the pandemic issues decrease, to see customers retract from using curb-side delivery of items, and move into grocery store shopping. People gravitate towards comfort and ease, and this may well be the reason free curb-side deliveries exist for a few years after 2020 and is also often used by customers.

    Reply
  36. nishchaykhona says:
    September 5, 2020 at 12:41 am

    From my perspective:
    1) When it comes to customers demand expectations like Amazon Prime, in shorter term smaller retailers can focus on products which a) have higher margin in order to mitigate additional cost b) are repetitive in nature of ordering by customer and preserve customer loyalty. In longer term, as customer relationships are built by smaller retailers, logistics network on smaller scale can be built on order to ensure 2-3 hours product deliveries to nearby customers and this can be a USP as compared to bigger brands.
    2) Labor costs ideally should be bear by retailers since customers will prefer online shopping with deliveries option rather than curbside pickups if they are being charged pickup costs. Just in time concepts can be used in order to optimize no. of labourers required for a particular shift.
    3) It is being perceived that customers are making a permanent shift to online mode as they bring ease and consume less time for shopping. While this may depend based on products like clothing, food etc. more consumers will be preferring this mode.

    Reply
  37. Mrunal Vaidya says:
    September 5, 2020 at 2:58 pm

    1. With the given situation, free deliver has become a must for the customers.This will undoubtedly force the retailers to sell at a low margin, but keeping the business running is more important in this hour. Once they are through, it would definitely be more smooth sailing.
    2. The labor costs must be bourn by the retailers but laying of people in such situations is also not an option. Target has been hiring people that lost their jobs due to the pandemic and that has created a perception that the company is responsible and considerate. That being said, small scale retailers can think of outsourcing or selling through a bigger brand with low margins to keep up with the costs.
    3. Online shopping is undoubtedly convenient, with the continuous sale offers many a times cost effective and reduce the shopping time. With free returns and delivery it looks to be the future of retail. I cannot agree more that knowing your customer and building goodwill is the only way to keep the sales up by catering to the need to the customer. An approach like Zara’s would work the best in my opinion in such conditions. Changing the product line to best suit your customer base is the way to go.

    Reply
  38. Matt Wright says:
    September 5, 2020 at 8:53 pm

    Retailers *must* compete with Amazon by offering delivery to those seeking it, as these customer will find a different retailer if such services are not available. The advantage grocery stores have is that *most* people still default to brick-and-mortar stores for any food products. Therefore, even if the store must increase prices to allow for delivery, the consumer will likely use the grocery before Amazon. Groceries can offer similar services like pickup, or implement order minimums, to make the process slightly more efficient.
    From my standpoint, the last thing stores want to do is tag delivery fees on to the end of orders. Most stores have seen increases in revenues due to decreased restaurant dining and increased home cooking. Therefore, they should be able to absorb some of the delivery costs. If they cannot, they might want to consider raising prices of individual items by small amounts for online orders. This will look less jarring to customers than a fee at the end of the bill.
    Most customers will probably return to shopping in-store once the pandemic improves. If stores wish to accelerate this process, they can work to learn why customers still use online services, and use this information to encourage customers to return to the store. For example, if customers do not feel comfortable shopping in-person because they think the store is not clean, the store can advertise the measures its taking to maintain cleanliness.

    Reply
  39. nishchaykhona says:
    September 6, 2020 at 1:47 pm

    Observed store sales can be used to reduce stockouts via: a) Demand side: There will be a need to verify whether the consumption pattern observed for specific products in stores is a temporary or a medium-longer term thing. Customer surveys can be a tool utilized to gauge this shift by providing customer with some incentive to filling out surveys. This shall help to analyze the firm demand patterns. b) Supply Side: Once critical SKU’s are known, investments can be thought of at vendor’s end in order to ramp up capacity, alternate sources can also be evaluated. Optimization of shipping lanes can be explored in order to ensure smoother flow of products to stores. Vendor Managed Inventories (VMI) can also be negotiated in order to ensure optimal stocking levels.

    As VMI provides suppliers a control to maintain necessary inventory levels and align their production plans accordingly, it can be helpful in navigating through current challenges. Companies can reduce labor costs at own end due to lesser responsibility and this can lead to reduce spending.

    As there are spending pressures, it seems that share of revenue via contractors will be impacted since customer will conserve cash and shift to DIY mode majorly. New enrollments of contractors can be stopped and as it seems that this shift can be a permanent, trimming down of workforce might be necessary.

    Reply
  40. Rishabh Jain says:
    September 6, 2020 at 6:42 pm

    Amazon in light of its known customer obsession has been relentlessly trying to raise the bar of competition. One of the critical things to WIN or RETAIN a customer is to decrease the lead time. Amazon has raised customer expectations for the delivery time and they are able to manage the cost because of the optimized operations and economies of scale. While big retailers like Target and Walmart can still compete with the delivery SLAs utilizing the volumes and available treasure chest but this will impact the small retailers that capture a very small market share in the e-commerce market. For these, they will need to decrease the operational costs by exploring the inventory management, consolidation of products for logistics and better forecasting. The reduced costs here can help in improving margins and the ability to provide faster shipping without losses. Once you have a growing market share, your costs of transportation and other things will eventually decrease (Amazon’s virtuous cycle: https://images.app.goo.gl/tABNQJNLTyrLLKbx6)
    Since e-commerce is a very convenient way of buying things, I believe that its growth rate will not wane even after the pandemic because people will be used to this comfort in shopping

    Reply
  41. Diego Palacios says:
    September 6, 2020 at 11:40 pm

    Diego Palacios

    I believe Dr. Iyer’s comment regarding the rationality of customers is extremely important because it allows companies to be proactive on how to address them. Although everything was (and still is in some degree) uncertain for everybody, this assumption enabled companies to respond proactively. Actions taken by companies in this situations can really strengthen the brand, or can generate big losses (goodwill).

    This situation has been eyeopening for many people, and might drive customer habits more towards online shopping. on of the key takeaways I would highlight, is the need of retailers on rethink how they are going to cover the costs of doing the “work of the customer”. This might be also a great opportunity for new companies to enter the market focusing on doing the “customer’s work”. As an example, the Colombian company Rappi, has been a key player in this market (It is one of the few Unicorn companies in South America). In the case of Peru, Rappi has been able to outperform by far Uber Eats as it is much more flexible.

    Lastly, this crisis situation will be very interesting to analyze looking behind, as it will allow companies to understand better how consumers behave in crisis situations. It is the first time in history, that companies can collect this amount of data in a global crisis and could be fundamental to create crisis management plans / disaster planning.

    Reply
  42. lvargass says:
    September 7, 2020 at 12:15 am

    Delivery purchases have come to stay and continue in the retail market, not only due to great offers as the free delivery, but even more related to convenience and time effective for so many people who works during the day, and the last thing they want to do is used their free time at the grocery store. Amazon Prime great deal of free delivery is a very well calculated service, where this company has the capacity and scale to be able to offer such service. But for smaller retailer this might not be as easy, but it’s a service that right now could increase their margins of sales, especially during Covid times.
    The need to incorporate online sales plus delivery service are key for the survival of business right now. The cost associated to it must be difficult to bear without any cost associated to the customer, but there are ways that could leverage this and find the opportunity to connect with customers who may want to continue purchasing from their stores. For example, offering free delivery with a minimum amount of purchase, or even free delivery with a monthly membership fee, that would actually make customer want to keep using the service since they already have a membership.
    I believe that the percentage of new online customer have discover how beneficial is to purchase online and only pick up or deliver to their home, that even after the pandemic would continue using and preferring this system of retail purchasing, so business have to really think for the future and how to utilize this technological tool to reach and connect with their customers.

    Reply
  43. Guillermo Cerutti says:
    September 10, 2020 at 5:42 pm

    Large retailers, like Target or Walmart, have the resources to compete (Think of Walmart now having a new product to launch: Walmart +) but they can opt to offer a different option to customers and differentiate from Amazon in other aspects. They are still offering free delivery (Walmart I think it does with purchases of $35 or more in total).
    Smaller organizations that have more constrains can use the platforms of Amazon or Uber Eats to compete and offer something that again, differentiates them from the competition.
    All the organizations will have to transform at least some part of their supply chain structure due to the pandemic, it remains to be seen just how much and if this can be used to gain more market or not.

    Reply
  44. Rujuta Mamadapur says:
    September 13, 2020 at 4:27 pm

    As mentioned in the article, conversation and active customer engagement are key. The smaller retailers can have a repository of their regular customers in the form of email ids and send out notifications regarding their stock information. That way, the customers will be assured that a stockout will not happen and they won’t hoard supplies. Amazon prime also comes for a 1-time yearly cost for free deliveries. Walmart groceries has also adopted deliveries for a year at a priced membership. If a similar approach can be taken by smaller retailers, they can compete with e-commerce giants with regard to deliveries.

    Labour costs associated with curbside deliveries is something that the retailers will have to pay for. If the customers pay for it. the prices will have to be increased and it wouldn’t be conducive for the goodwill and customer relationship during a pandemic. To absorb the disruptions in the supply chain and maintain a steady flow of customers will need a trade-off in terms of cost allocations for various components in the supply chain.

    Reply
  45. Sheng-Yang, Chou says:
    September 16, 2020 at 2:52 pm

    According to the article, at this time of the pandemic, it may not be wise to increase the costs of the customer in order to meet the increased expenses of the retailer. The company should find out the data or think about how the customers will think. Using popular social media such as Twitter or Instagram would be a better choice for small retailers, they can give their customers some gift after customer followed their social media account and update their inventory in the social media every day. Hence, any investment made in that aspect will be beneficial to the retailer in the long run.

    Reply
  46. qiyaoliu says:
    September 28, 2020 at 12:46 am

    Who should pay for the store labor costs associated with curbside delivery to customers? How many of these online customers will remain in that mode as the pandemic worries decrease?
    Nowadays, free delivery becomes very critical for online purchasing. In order not to lose customers, offering free shipping is necessary. However, this action would squeeze the profit margin for small retailers. In that case, corporate with platforms like Amazon might help. Relying on Amazon’s advanced logistics and warehousing, retailers can save money on holding costs and transportation costs.
    The labor costs associated with curbside delivery should pay by the retailers since it is a service offered to attract customers, or a response to specific situations, for example, the pandemic. Customers would have more available options after the pandemic, but the pandemic changes customer purchasing habits, and this impact can be permanent.

    Reply
  47. David Ng says:
    August 24, 2021 at 11:12 pm

    Customers are a vital component for any companies to strive. During the pandemic, we have seen that many retail stores, such as Walmart and Target, runs out of essential goods that can be sold to customers. In turn, customers panic and start to stockpile any essential goods that they see in retail stores. This creates a vicious cycle in any retailers supply chain system, and thus they are not able to meet the customers’ demand. As the article has mentioned, to disintegrate this vicious cycle, retailers should be proactively acquired inventories that the customers demand so that customers know that they can always purchase goods from the retailers. This will instill confidence to customers and disintegrate the vicious cycle that we are currently in during this pandemic.
    Retailers should also invest in their e-commerce because many customers have expectations because of Amazon Prime Expectation. According to the article, Professor Iyer has mentioned that retailers, such as Walmart and Target, have made commitment to increase their usage on robotics and automation. However, it will still take some time for them to operate efficiently. Therefore, retailers should reduce cost in their supply chain system, save those cost, and invest in delivery system. Since increasing the price of the goods can only do more harms than goods for the retailers, expanding their supply chain to meet customers’ demands are vital for their success.

    Reply
  48. Amanda Tronchin says:
    August 24, 2021 at 11:23 pm

    Smaller retailers must understand their target customers fully. If retailers understand their customers’ needs and constraints and tailor the shopping experience to their customers, it will increase the likelihood that customers may show loyalty to the smaller retailers. If you think about local stores, while they may not have the most competitive prices or the largest variety, they provide a quality of service and personal effect that trumps the large big box brands.
    If I were the retailer, I would try to force the cost on the customer. Therefore, it would deter some customers from using the feature and reducing the number of employees needed to run the inside and outside operations. In my experience, I have watched employees joggle between helping customers in the store and fulfilling curbside delivery orders. While I primarily watched this happen during the pandemic, when labor levels were depressed, I think there would still be a struggle between in-store and curbside delivery management.
    Finally, I anticipate a decrease in online customers as the pandemic worries decrease, especially if there is an added associated cost. While some socio-economic classes will have no issue with paying a premium to have this feature, others may not be able to remain.

    Reply
  49. Ying-Hsuen Tsai says:
    August 25, 2021 at 4:23 am

    The pandemic changed the ways of customer shopping and store operations. More and more consumers are ordering goods online or choosing curbside delivery to pick up their orderings. For most of the retail stores, both shipping and curbside pick-up services increase the associated costs. While many customers now being pampered by Amazon prime which offers free and fast delivery services, it’s difficult or almost impossible for even big retailers like Walmart and Target to offer such premium services, not mentioning the medium or small size retailers. As mentioned in the article, the comparative advantage is that they understand more about their customers. Therefore, instead of competing head-to-head with Amazon prime in terms of delivery fee and time, these small businesses should continue to focus on exploring customer data to provide the value that Amazon can’t offer. As for the big retailers like Walmart and Target, they should exploit more of the comparative advantage – allowing customers to get the products they want immediately or within the same day. This is the value that Amazon can’t provide. Therefore, at the same time applying automation and robotics to reduce costs and maintain margin eroded by extra services like curbside pick-up, these retails should also strive to keep enough stock in the store, so customers can get the products they need immediately or within the same day. Due to the competitiveness of retail industry, it’s unlikely to ask customers to pay for all the extra cost caused by curbside pick-up service. However, just like people are willing to pay for the Amazon prime membership fee, people might be willing to pay “some” for the services like same day curbside pick-up service. It can get the customers to pay for part of the increased caused by extra services. Even the pandemic worries decrease, some of the customers behaviors might have changed forever. According PwC’s June 2021 Global Consumer Insights Pulse Survey, consumers do not think they’ll go back to their old ways of shopping once the pandemic is over. It’s for sure that some of the customers will go back to in-person shopping, but online customers will surely to be more comparing to the time before the pandemic. Retailers should re-evaluate and adjust the current supply chain model to survive in the new-normal post-pandemic era.

    Reply
  50. Jason Harris says:
    August 25, 2021 at 2:13 pm

    Retailers should provide the least expensive shipping method for free while offering faster shipping options at a cost while maintaining competitive pricing with the goods sold. Every customer does not necessarily need the items purchased immediately. Many may need the item within a broad window of time while seeking the most competitive pricing within the market. Additionally, retailers can begin to conceptualize opportunities to be more competitive, with various sales, and become a trailblazer within the industry like Amazon Prime by identifying ways to offer services to customers no other company in the market currently offers. The store labor costs associated with curbside delivery to customers will need to be paid for through efforts to increase sale volumes, at least initially throughout the remainder of the pandemic. Over time, these costs can be marginally passed on to the customer as COVID-19 constraints level out. A vast majority of the e-commerce customers will maintain sourcing goods online post-pandemic, considering the impact of COVID-19 will have a long-lasting effect on the global retail market. Most customers who have identified some of their favorite retailers diversifying operations to include e-commerce will likely continue to reshape the landscape of online shopping as we know it and become the new normal. There will be no turning back once a customer develops an appetite for convenient shopping with free shipping and returns options. Shoppers may decrease the rate at which they shop considering their back to work status, decreased need to stockpile products due to a fear of any scarcities within the market, and their ability to visit in-person retailers. Nonetheless, this decrease in e-commerce sale volumes will not likely be drastic.

    Reply
  51. Yijia Chen says:
    August 25, 2021 at 3:31 pm

    During the epidemic, many large retail stores began to pick up goods on the roadside. Customers can get the goods they want in a contactless way. It is true that this new omnichannel approach may increase the labor cost of retail stores, but it will also increase more opportunity revenue. Because the market competition is very cruel, if large retail stores do not open new delivery services, it may be on some non-emergency goods, such as disinfectants, disinfectants, and other products that are popular during the epidemic. Customers can go to purchase through amazon prime. This loss is the business of large retailers. For the development of the small retail industry, they should be well aware of their target group, competitive pressure, supply channel pressure, and distribution channel services. They can set the free shipping transaction volume line according to their own situation so that they can increase their sales and achieve profits. And it can retain their target group with a high probability.

    Reply
  52. Ahmed Hegazy Ali says:
    August 25, 2021 at 3:36 pm

    I think retailers can compete through similar programs with added unique value proposition. While Amazon Pantry and Amazon Fresh are available in major cities, they’re not available in smaller cities like Lafayette or West Lafayette.
    Retailers have an edge because they are more agile that Amazon, seeing that Amazon is growing to become a larger organization that has to go through major programs to make a change in its supply chain, while smaller retailers can make more decisions momentarily and adjust based on the results. However, retailers need to make more data-driven decisions, all based on retrospective analysis and historical data, rather than using feeling and “knowing people’s behaviors”. Larger retailers like Walmart have launched free delivery platforms like Walmart+, and appear to be offering same day delivery due to inventory pooling from multiple Walmart stores within on municipality. This is an intelligent move, seeing that Walmart is more segmented within the Grocery sector than Amazon.

    Smaller grocery stores need to remain afloat within the pandemic, primarily through supply chain optimization and maintaining higher fill rates so that demand on the store is maintained. They should invest in partnering with companies like DoorDash or Postmates, and disregard the high margins.

    Within the pandemic, my belief is that stores need to pay costs associated with curbside delivery. That’s assuming that the customer’s only choice is to wait in a car while items are placed in their trunks. However, post-pandemic, this is more of a valet service, which is not required of the store. This means that the customer should be carrying this cost. However, I do believe that the stores view this cost as a customer acquisition cost, so I believe stores will remain to do this post-pandemic to attract more customers.

    I believe that customers will remain online after the pandemic, seeing that they discovered new media of getting items delivered, rather than wasting time and gas on going to a store. However, for stores to be able to sustain themselves, I believe that they need severe supply chain optimization metrics to enable them to compete in the returns part of the supply chain.

    Reply
  53. Emma Wellington says:
    August 25, 2021 at 5:48 pm

    Retailers can compete with the Amazon Prime expectation of free delivery by offering free delivery to their customers, and gradually increasing prices after the pandemic. I agree with the article that during a pandemic is not the appropriate time for retailers to raise prices to cover additional costs from transportation, staffing, and supplying online and pick up orders. However, retailers will need to adapt their business model to meet this change in consumer demand. In the short term, I don’t think there is an easy fix to absorb all of the costs associated with selecting and packaging pick up orders. However, in the long term, retailers can slightly increase prices to account for this new service offering. Therefore, presently retailers will have to absorb the store labor costs associated with curbside delivery to customers, but as prices increase, this cost increase can be shared between customers utilizing the service and retailers. The price increases can be positioned to consumers as the cost for utilizing their curbside or online service. If prices do not increase and online delivery is at no additional cost, I believe many consumers will continue to utilize online shopping after the pandemic due to the convenience the service offers. However, if prices increase, I believe the number of users of the online service will decline and consumers will begin to shop more in-person.

    Reply
  54. Aadav Srimushnam Sundaranathan says:
    August 25, 2021 at 6:38 pm

    While there is discussion around margins not allowing small retailers to provide complementary services to their customers, the home deliveries from small mom and pop shops have been free of charge in the eastern hemisphere, and where as the e-commerce had to compete against customer loyalty to these smaller retailers. On the other hand, during pandemic, it is interesting to see how the bigger e-commerce players are looking to leverage the small mom and pop shops to reduce inventory in their own warehouses and enable quicker last mile deliveries. E.g., Amazon, Reliance establishing partnerships with smaller retailers for deliveries. The collaborative effort of delivery partners, e-commerce players and smaller retailers have benefitted the involved stakeholders by leveraging their individual strengths of last mile deliveries, technology and product availability respectively. The customer service remained uncompromised and prices were kept stable. In this e-commerce players could reduce the costs of inventory, smaller retailers had more volumes moving and delivery costs was taken care of by e-commerce players who either charged their customers or offered free of charge deliveries based on order values and providing convenience to customers. This model is to stay post-pandemic as well, and the users will adapt to this behavior as there is intersection of benefits from different stakeholders. And increasing investments from e-commerce players provides a stronger validation to this pattern. But adoption of this model in other geographies is something to ponder upon where there is higher stickiness to online apps.

    Reply
  55. Yi-Hsuan Hsu says:
    August 25, 2021 at 10:54 pm

    With customers’ expectation of free delivery, large retailers follow up to ensure they could satisfy their customers and compete with Amazon. However, costs would be increased with such actions. During the pandemic, it is not practicable for the retailers to cover the cost by increasing the price, and thus they need to maintain their overall profits from another aspect, by increasing working efficiency and reducing the overall costs. For example, Walmart and Target have announced the increasing use of robotics and automation. On the other hand, to attract people to come into stores, small businesses could respond by leveraging software tools and better understand the customers data.

    Normally, the store labor costs associated with curbside delivery to customers are paid by customers themselves, as the retailers would try to charge extra fees in other forms to cover the cost. However, during the pandemic, such strategy is less practicable, and retailers cover such costs by trying to cut off the costs instead.

    When the pandemic worries ease, the customer demand would be less uncertain. However, I believe the trend of online shopping trend will remain, as both the retailers have learned from COVID and the mode of supply and demand has been changed. Customers now know that the retailers could provide more efficient services to fulfill their needs, and the retailers are incentivized or forced to provide more efficient services to customers to maintain their competitiveness.

    Reply
  56. Sruthi Madadi says:
    August 26, 2021 at 10:50 am

    Post Covid there is a change in the consumer purchase pattern. Customers are looking for Product availability, Ease of shopping /return, Price (Even as a customer myself I look for the prices online for the same item before purchasing instore and I think it has become a new norm now) and Free delivery- Thanks to Amazon customers are expecting for a free delivery if they place orders online. Even though there is an increase in online shopping majority of the customers still prefer instore purchase as they want the touch and feel experience before investing.
    Technically it’s difficult for small retailers to compete with Amazon, but they could either tie up with the delivery services like Instacart, which provides the logistic service with the technical support. But in addition, small local retailers need identify emphasize on their core competencies like providing locally available fresh products which would help them to retain the existing and as a word-of-mouth it also might help them to acquire new customers.
    Big retail chains like Walmart, Target and Kroger are expanding their ecommerce presence but are also taking the advantage of the physical stores by offering services like curb side pickup, instore pick up. In addition, once the pandemic ends there is a good chance that the customers might come back to the store to get the instore experience. Retail stores should prepare themselves to provide the best possible shopping experience by attractive instore layout, information on the products in each aisle and friendly staff.
    Finally, as the article mentions one who could satisfy the customer demand with high in stock rate, provides better customer service and maintains the competitive prices will be the winner of the race. But to accomplish it there should be a good coordination in the chain structure, the retailer should always evaluate its performance on KPI’s compared to its competitors and the organization should always remodel itself with the changing demands and shopping patterns of the customer.

    Reply
  57. Dakota Ropp says:
    August 26, 2021 at 11:00 am

    Smaller retailers are having the problem of trying to compete with bigger retailers such as Amazon who are able to offer things like free shipping. This means that smaller retailers will have to evolve in some way to help cut costs to make up for the fact that they can’t offer free shipping. This will involve maybe looking at their logistical process and see if changes can be made that would cheaper for them. This way they also don’t have to raise there prices, which with the competition would really hurt them in the market. This could be things like pooling their shipments instead of getting a bunch of different ones. Another thing they could do is have things shipped directly to stores rather than to extra wholesalers in the market. This would allow them to cut costs by cutting some parts of the process out.

    Reply
  58. Hao-Wen Weng says:
    August 26, 2021 at 5:57 pm

    I think customers will still buy stuffs to retailer but it really depends on the types of these goods. For example, if the customer is going to buy perishable goods, such as meat, vegetables or fruits, I think they will tend to use the retailer who has better reputation and well-known products instead of buying them on Amazon. The retailers just need to make differences from Amazon’s products.
    Also, I believe that the customer who use curbside delivery should pay for it instead of the retailers should pay. Because there are some customers who still go into the stores, select the goods they want and do self checkout. If they still pay the same prices with the customers using curbside, it will just encourage the customers to use curbside pick-up and increase the labor cost on this part.
    The last question can be related to the first one, how those retailors keep competitive after the pandemic. I think retailers can still be competitive because the local retailers are more close to the customers’ neighborhood. Besides, if they are satisfied with the service and products on retailers, they will go back to the retailers. Amazon can provide an online option for the customers, but the delivery lead time and the uncertain quality of the products might drive the customers back to the retailers as well.

    Reply
  59. Ting (Tina) Lin says:
    August 26, 2021 at 6:55 pm

    Nowadays customers have many options to buy their goods from, and customers can look up and compare prices easily with mature e-commerce. Online stores take care of part of the customers’ shopping procedures and present them in sophisticated and efficient ways for the customers to order from the websites. In a way, online stores need to invest more in setting up the shopping experience. Retailers competing with large retailers such as Amazon should understand customers’ worries to be competitive in the market. Customers have different concerns and retailers should tackle each concern using different strategies. Instead of requiring a costly membership or minimal shopping amount to qualify for free shipping, retailers may encourage customer loyalty by enrolling them in free shipping or free curbside delivery, if they meet yearly accumulative points to qualify for the program. Retailers might have to expand items or brands to source from during uncertain times, retailers can ease the anxiety and gain reputations among their customers by having higher fill rates. Customers will need to accept that with free delivery or curbside pickup services, there will be a mark-up price on their items. The small margin will be used to cover the cost of having additional services. A majority of customers who utilized the online shopping experience during the pandemic will eventually go back to their pre-pandemic shopping habits. However, people who have seen the benefit of convenience and time-saving might continue to order online even after the pandemic.

    Reply
  60. Calei Kelly says:
    August 27, 2021 at 8:32 am

    Smaller retailers have to stay relevant by following the competitive trends, as per the equilibrium view. As one firm in the industry moved to free delivery (with membership), other retailers need to follow suit. Alternatively, they need to provide options that compete with Amazon Prime: have their own membership program for free shipping, order amounts that qualify for free shipping above a threshold, or frequent shopper points that get the benefit of free shipping. With the right technology, hopefully other labor costs can be reduced to help cover the delivery costs, however, it is likely that some of these costs will get passed onto the customer, making free delivery not quite as free as it seems. I think customers will mostly come back to the stores when the pandemic worries do decrease. Right now, they seem to be spiking again which might postpone this. Additionally, the convenience with curbside pickup and delivery might keep some customers longer than the pandemic lasts. It can save the customer a lot of time, which for busy people is great.

    Reply
  61. Oladapo Olatunde says:
    August 27, 2021 at 12:14 pm

    The first way to look at this, is to note that Amazon is one of the most successful and iconic brands in the history of business. Not every company can provide, in-store health programs or drone delivery which other services major retailers are doing to stay competitive with Amazon. As Amazon has crushed traditions by finding new ways to deliver the customer a better service experience and not all retailers have the deep pocket and tech expertise to make this happen.
    For other retailers to be able to compete with Amazon in free delivery, they might need to come together to form a data driven coalition within a fulfillment network. This coalition will include flexible warehousing, customer experience technology and gig-economy workforce. They will need to accommodate third party fleets to handle their last mile delivery. To minimize labor costs and still have the flexibility to handle a peak online order, many retailers can cross-train cashiers and other store workers to step in and pick for curbside pickups. A huge proportion of customers would still want to do the curbside delivery even after the pandemic worries decrease, however the only way this could be profitable to retailers is if customers will have to belong to some sort of loyalty program in exchange or pay a fee/ buy a minimum amount.

    Reply
  62. Shivang Batra says:
    August 27, 2021 at 1:22 pm

    In my view, retailers can compete with Amazon prime as we know that Amazon fresh, pop up, go grocery is only available in few locations so retailers can have better positions in delivering products to the customer as they can react to the customer needs in a fast manner.

    Walmart started using inventory pooling(reduce forecast error) during the pandemic to offer same-day delivery to the customer. They have also invested in technology like using robots to check the inventory which can result in reducing cost. Through optimization of supply chain retailers can look out to reduce their supply chain cost hence can offer free delivery without adding extra cost.

    Amazon has invested in Reliance to built partnerships with “Mom-and-pop” businesses which can help small retailers getting good business by using network and offering free delivery on the other hand Amazon can reduce the cost of inventory.

    During the pandemic, the retailer has started providing curbside delivery to the customer but the concept continued after the pandemic so in my view retailers should take this cost as a customer retention cost.

    I believe that customers will remain online after the pandemic as they are getting products just with one click. So, inventory pooling will be helpful for retailers to reduce supply chain costs. Small retailers should partner with delivery companies like DoorDash without investing a huge amount in technology.

    Reply
  63. Juan Bautista Rigal says:
    August 27, 2021 at 2:42 pm

    I believe that there are different customers for different environments. Clearly retail grocery stores must know and understand the niche they should aim, so knowing your customers is part of the plan. If a classic retail store wants to compete with Amazon style delivery, it would be very difficult. Tailoring the service for their customers base is a way to enhance the shopping experience, therefore making the customer loyal to the brand. The pandemic has completely changed the service and operations of a retailer. Moreover, if there is the store labor costs associated with curbside delivery could be a combination of less cashiers and less people within the store given that a lot of customers has shifted their tendencies and got used to the idea of this type of delivery.
    On the other hand, retailers must be careful about doing drastic decisions where there is no coming back. With the end of the pandemic things can and will change again, developing new tendencies and if there is no room to go back or adjust quickly, it could lead to potential problems.

    Reply
  64. Anantharaman Gomathyshankar says:
    August 27, 2021 at 2:46 pm

    The pandemic has instilled the fear of unavailability of a customer’s desired products.

    Large retailers like Walmart and Amazon have introduced virtual inventory pooling to satisfy the needs of the customers with disparate geography. Moreover, Amazon has developed a partnership with Reliance to create a network of “kirana”(Local grocery stores) shops in India to fulfill customer demands. Walmart has also embraced the online model with their extensive investment in the Walmart along with the introduction of Walmart+.

    Mid size retailers have a challenge of acquiring products to increase inventory cycles per time period to show the customer that they can have a desired service level and fill rate for their desired products. For doing so, they have to temporarily take lower margins to instill confidence in the customer to revisit their store. Use of Software solutions to codify and organize the inventory and supply chain data and procedures can lead to better optimization of supply chain cost.

    Small size retailers usually have a strong customer base which is highly local. Knowing about the customers and focusing on customer data can be the most crucial element to remain competitive. Collaboration with other retailers to acquire higher quantities at lower prices is pivotal to stay relevant in these times.

    Shift of customers to online shopping is here to stay. People value their time even more with the advent of COVID-19 and the resulting phenomenon of working from home. The rate of multi-tasking has increased and the availability of online shopping bolsters the intent to multi task among the general population of customers.

    Reply
  65. Lindsey Prommer says:
    August 27, 2021 at 3:48 pm

    If customers demand free delivery, retailers must either compete by granting free delivery themselves with no item price increase (facing decreasing margins but might be the cost of staying in business), incorporating delivery fees into their item prices to offset offering free delivery (no change in margins but higher prices), or differentiating themselves from competitors in another way that makes paying for delivery worth it or encourages customers to come into the store (ex. lower item prices, in-store only promotions, etc.).

    As far as who should pay for store labor costs associated with curbside delivery, this is interesting because both customers and retailers benefit from this service (customers because they skip the effort of physically shopping and retailers because they can predict demand ahead of time). That said, if a retailer can pass off the cost to customers because they’re willing to pay for it, this is definitely advantageous to retailers. Some might say the store footing the bill is the cost of doing business. The retailer would definitely receive lower margins on already thin ones at that, but they could see an increase in customers that would make this cut in margins worth it. I think that who should foot the bill depends greatly on the price comparison of competition and whether the business predicts that increased revenue from more people purchasing items (incentivized by lower prices) will cover the retailer’s cost of delivery.

    Lastly, I believe that most online customers will remain online customers, despite the “end” of the pandemic on the horizon. Online shopping is incredibly convenient and is not something that I foresee going away even though now safety concerns are declining regarding shopping in person.

    Reply
  66. Su Tien Lee says:
    August 27, 2021 at 4:44 pm

    Different from the e-commerce tycoon such as Amazon, the retailers have clerks to service the customers indoors, and can solve almost all their issues immediately and provide a decent customer experience. Shopping at the scene also allows customers to nicely walk through the items they want. They compare the colors, sizes, materials, extent of handiness of similar products, and the most important thing — to bring home the products on the shopping day. Though unable to provide discounts such as free delivery, the retailers assure customers with timeliness and quality assurance, which is an important aspect that e-commerce can hardly achieve.
    Obviously, customers notice this advantage, so some may go and try a product at the store, and place an order online back at home. They understand prices are higher at the store because they cover rental fees and labor costs. They enjoy this benefit but refuse to pay for the service. Then who should pay for the store labor costs? Is there still value for the physical store? One breakthrough might be to open both offline and online stores. The offline branches provide walk-in, pick-up order services, and consultant with a specialist. For customers who feel more comfortable buying in the store, they buy at the scene, but for customers who are more familiar with e-commerce, and are fine with waiting for the delivery time, they may place their orders online. In this chain, the retailers can also provide discounts for customers who place the orders after consulting or choosing at the store. This will help to keep customers in their shopping cycle.
    Shopping online remains uncertain in products’ quality. I believe when the pandemic worries decrease, people will return to offline chain stores. For daily supplies or MRO goods that do not require a high level of qualities and customers already have their most-used items and brands, there isn’t a necessity to buy offline. For these commodity buyers, there is a high possibility that they remain in the online shopping mode.

    Reply
  67. Chia-Yen Lu says:
    August 27, 2021 at 5:00 pm

    How should retailers compete? Take my personal experience, for example, my parents own a houseware store in Taiwan. Last year we also have a surge in demand for tissue paper during the pandemic. However, my parents seize this opportunity to better understand the reason behind each customer, and our store never runs out of tissues. How did my parents do that? First, my dad reached out to the connections that he had to order the tissues and he also released a rule to make sure every customer’s maximum of purchase, at that time, every customer could only purchase 1-2 bags of tissue. Even some customers might think they want to purchase more, my mom told them my dad is proactively ordering the tissues and he is got enough supplies in the coming days. Then the customers would realize that this store will not be running out of stock even during this challenging time. The customers will no longer worry about the supply of the tissue. About the possible low margin during this case, my parents would not raise the price at this moment. With the building of the trust with customers, the customers would start to consider buying directly from us, because we are never out of stock. My parents could easily earn more margin from other kinds of products and most of the new customers that understand my parents’ way of doing business keep buying other products until now.

    Reply
  68. Alexander Rabold says:
    August 27, 2021 at 6:56 pm

    Retailers trying to go against Amazon Prime are facing a difficult spot, simply due to the differences in scale between most companies and Amazon. Amazon has had years to build up effective supply chains, streamlining the process and vastly improving their distribution networks. Free shipping through Amazon Prime, even if it does come with an added membership fee, is going to be less troublesome for them to implement than it might be for smaller retailers.
    There are a few ways retailers could react. They could attempt to follow similar models of free shipping, although that would result in decreased margins. They could also try providing unique benefits depending on areas, such as local sales and promotions. If they want to improve their ability to meet customer demands, they could adjust their inventory systems to take stock of all nearby stores and ship goods around that way. Keeping up-to-date information on customers and their demands is vital for each of these.
    In terms of the costs involved, it would likely either be held up by the retailers alone or distributed between retailers and customers. Keeping costs low is a vital part of customer retention and goodwill, even as new services become prominent in the market and demands change. Either way, the retailer is likely to face lowered margins.
    I’d say that the number of people relying on solely online ordering will decrease as the pandemic lets up, but there will still be a substantial number of customers using that method. As others have stated, it’s far more convenient for the customer to order online than to go to the store themselves, even if there is a risk that they’ll have to return some items. Unless the cost of providing free delivery and similar services becomes prohibitively expensive, retailers are likely to be stuck with them in the future.

    Reply
  69. Rajinder Budhiraja says:
    August 27, 2021 at 9:44 pm

    Retailers should try to ‘Amazon their supply chain’. Amazon brought this competitive dimension of ‘free home delivery of grocery’ on the table and immediately grabbed the attention of customers who started switching from in-store pickups at retail stores to ordering online and getting the stuff home delivered. Customers are making decisions in their best self-interest and therefore are rational, and retailers must embrace this with open hands to stay in business.

    Retailers are facing increasingly higher costs due to unexpectedly higher variations in the demand for consumables due to COVID-19 pandemic. This is squeezing their profit margins and furthermore are now facing competition on another front called free home delivery. Therefore, increasing the prices of goods and services is not an option. Nor it would be in the interest of the retailers to pass on this cost to the end consumers in any form.

    Retailers can look at the following options to improve their supply chain performance.
    First, they can look at the possibilities of doing virtual inventory pooling. This will help bring in benefits through the effects of square-root of ‘N’ where ‘N’ is the number of stores whose inventory will be virtually pooled.

    Secondly, retailers can introduce more options for last-mile delivery. They can provide an ordering platform through E-commerce and arrange curbside pickups. Additionally, since retailers have multiple channels of E-commerce, they can try to connect all channels. This will provide a seamless experience to the customer across all platforms.

    Retailers can also do a supply chain audit to identify potential sources for improvements across all the paths and entities through which goods, services, and information flow before reaching the final customers.
    Supply chain managers can create a map of the entire supply chain so that they are aware of where their store stands in the entire structure. It can help supply chain managers to order directly to the manufacturers instead of going through the traditional distributor route.
    Supply chain leaders can also do a capacity audit and examine how best they can deploy their resources based upon the sales portfolio across different locations. Efforts can be made in the direction to tailor the supply chain based upon product characteristics. This can lead to a sufficient reduction in supply chain costs.
    In the share of the total cost of shipping, last-mile delivery costs are substantial. Retailers can look at coordination across the supply chain using geographic postponement. Geographic postponement allows delaying the delivery of the goods to a particular location until the demand has occurred. Consolidating the dispatch of orders after using geographic postponement as a strategy the last mile delivery transportation cost can be substantially reduced. This will improve these supply chain efficiency and thereby reduced the supply chain costs, thereby making retailers more competitive in the face of pandemic and new competition KPI’s introduced by Amazon.

    Reply
  70. Sara Fortman says:
    August 28, 2021 at 2:09 am

    Customers have high expectations for delivery time and costs because as customers get used to overnight shipping, 2-day shipping, or quick shipping overall, they get more impatient and expect all deliveries to come quickly from then on. Within the past (around) five years, we have seen many large retailers like Target and Walmart have quick shipping, delivery, and pick-up options, they have the resources to make these quick demands available. These retailers are also so large that they have distribution centers strategically located within a certain mile radius from the stores to make sure the store shelves are always stocked. Whereas smaller stores do not have this convenience, and unfortunately suffered during the pandemic due to the lack of resources, services, and customers. But Amazon has continued to grow, and their quick delivery of all types of products has allowed them to be a top competitor to any store. They provide options, prices, free delivery, convenience, and contactless shopping. Shipping costs can get pricy which customers hate, which is why they enjoy Amazon Prime for free shipping, but people like quick actions and shipping/delivery. So many are willing to pay the curbside delivery price for the retail stores if they need the items urgent, since the customer is demanding their purchases to be picked and brought to them, then they should be the one to pay for the store labor costs associated with curbside delivery. If they do not want to pay for those labor costs, then they can just walk into the store themselves and choose what they want.

    When customers in-store shop, they are more likely to impulse buy and purchase more items that were not on their grocery list, which leads to more profit margins for the company. When they do pick-up or delivery, they are strictly only purchasing what they intended to from the beginning. If they do in-store pick-up they do have the option to add more to their cart when they spot merchandise when they walk in. But we have come to a convenience state of mind, customers view shopping as an extra task and a waste of time, so they choose the pick-up or delivery options for convenience while allowing them extra time for their other activities, this will continue even after the pandemic worries decrease.

    Reply
  71. Coumba Niang says:
    August 28, 2021 at 10:33 am

    I believe that for this particular period of time, retailers should expect to have operational losses as it will cost more to offer a discounted or a free delivery. One thing that they could do is to incentivize more buying by offering free shipping at one point. For example, a store like Walmart could say “free shipping over $35 purchase;” that would work because people are at home and it seems like the concept of money doesn’t hold as much value during their stay-at-home period. Retailers would still be having lower margins but hopefully they cover those costs with the panic buying from all of the customers. On the other hand, smaller shops will incur even more losses and should probably consider third-party shipping. One thing that would save them would be the relationship that they have with loyal customers, and the challenge is how to get more people to know about them, and that all lies on a good marketing strategy to make the best of this period.

    Retailers should be paying the labor cost associated with curbside delivery because they have to cater to customers need or else those customers will take their business to the competitor. This is the time to reel in as many shoppers as you can and give them incentives to keep shopping with you during these difficult times. One thing that retailers can do is to divide their associates and create a curbside delivery team that only focuses on online orders. Because there are less people in the store, that would be a good option to minimize the effect of the labor cost.

    I like to believe that not as many customers will stay in the online mode when the pandemic worry decreases. I think that a lot of people will be going back to grocery stores because it is natural that customers want to pick up their own product, mostly when it is a grocery/food item. Retailers should still invest in e-commerce because the predictions show that the world is starting to move completely online. Retailers should be on the lookout and be ready to be proactive at any given moment.

    Reply
  72. ptodjalla says:
    August 28, 2021 at 1:40 pm

    Amazon had set the bar for free delivery for a while now. Since then, many retailers have gotten away with charging shipment fees. A justification would be that Amazon free delivery is for members who are charged membership fees yearly. COVID-19 global pandemic has brought about a new reality for shoppers, especially when governments around the world are imposing population lockdowns. Traditional retailers were allowed to keep their operations open almost as usual however, the crisis has spurred an instant explosion of virtual shopping / home delivery / curbside pickup market segment. Retailers are faced with the challenge to satisfy their customers who have transitioned into this segment, better yet the need to take advantage of such disturbance and grow their market shares. To compete in this environment, retailers need to establish viable competitive advantage, allowing them to set apart from competition. This means retailers need to create offers (shopping experience, prices, customer satisfaction, etc.) that are perceived as much better value to customers compare to competition. One thing is certain in this new market environment, survival would be near impossible for those who will choose not to offer virtual shopping / home delivery / curbside pickup services, perhaps for “free.” It is safe to say that in today’s retail business reality, growth is essentially within this market segment. When it comes to costs of activities associated with these services, who should bear the costs or how to structure them in the budget; companies may have to be very creative about that. Tasks like merchandises pickup or/and delivery may be assigned to front-end customer facing associates such as cashiers and even merchandise shelves stocking crew members. This would require cross-training store associates, as well as planning flexible scheduling to allow for rapid responsiveness to clients’ demand. Retailer would need to establish productive partnerships with their suppliers, if they were not doing so already, to permit for effective and efficient collaborations. The goal here is to ensure most highest fill rates as well as fast customers demand responsiveness.
    In the case these new costs needing to be transferred to end-customers, retailers do not necessarily have to assign prices or fees to home delivery / curbside pickup, these costs can be included in products’ advertised prices. Also, these costs should not necessarily be passed on to consumers, at least not entirely, because the new situation offers ample opportunities for costs savings, which can cover for these. With the advances made in the Tech and social media industry in recent years, and assuming privacy and cyber security would continue to improve, a safe guess is that a good size of the online customers will remain in that mode even as the pandemic worries decrease. Also, considering the cultural evolvement, as it pertains social media acceptance or the positive perception of online / virtual transactions in general, one can easily foresee future growth of this market segment.

    Reply
  73. Zeyu Hu says:
    August 28, 2021 at 9:52 pm

    Actually, during the time I was living in the United States, I did not see both efficient and free delivery services at all, even Amazon Prime itself requires membership fee. As for retailer giants, as long as you purchase their membership card, such as Warlmart+, they can also offer fast and free delivery service to you. I am envisioning whether some small-scale retailers can expand their delivery business by cooperating with DoorDash. Just like we usually order a meal on Doordash, could we also buy groceries on DoorDash and receive them within 2 hours? In fact, this business has been proven to be feasible in China, but I am not sure that if it can also be implemented in the United States.
    It is best for retailers to bear he store labor costs associated with curbside delivery to customers, because every decision that retailers make relate to price will be deeply remembered by customers during that a particular time.
    In addition, I personally think that if the delivery services provided by retailers are really convenient, efficient, and reasonably priced, the number of online customers will not decrease. In fact, in the days of living in China in recent years, I rarely went to the supermarket to buy groceries, and most of the groceries are bought on takeaway platforms. It only takes 30 to 60 minutes from the moment I place an order on the takeaway platform to the time my order is delivered.

    Reply
  74. Esha Kaushal says:
    August 29, 2021 at 12:19 am

    As companies like Amazon rapidly expand their reach, many brick-and-mortar businesses are worried that they can’t compete. As stated in the article, local businesses worry that customers will no longer bother to leave home to shop when they have the alternative to get fast delivery online.

    The key to competing in this landscape full of big players like Amazon is to have a framework for understanding what’s happening – and then understanding what a retailer can do to win more omnichannel sales by leveraging the strengthens of their stores, their proximity to shoppers, and the growing influence of digital on in-store purchases.

    Smaller retails would have to improve their last-mile delivery with options like curbside pickups. To make this work, the retail store will have to invest in an efficient POS system to ensure that their store’s inventory is maintained and consistent across all channels, along with training staff. Since there is a lot of investment involved in enabling this service, the small retailers should charge a convenience fee for such services. Retailers can also consider developing delivery strategies to reward first-time customers and frequent customers, this will serve as a promoter of their new service and a way to retain customers.

    Additionally, since the small retailers usually have a loyal customer base, they should rely on analyzing customer data to track which items are in demand and come up with strategies to effectively manage their capacity to ensure that high-demand items are available for customers to order online.

    Further, in my opinion, the shift in trend from in-person to online shopping is here to stay. Therefore, small retailers should learn from this trend and get on board with leveraging digital media to drive their sales

    Reply
  75. Wei Ling Huang says:
    August 29, 2021 at 12:40 am

    I would suggest smaller retailers cooperate with Amazon Prime for its free shipping service because small businesses usually do not have economies of scales to build their own e-commerce platform. Besides, Amazon would also help increase online visibility of small retailers.

    For large retailers, take Walmart for example, it already launched Walmart+ membership with free shipping service for online purchases at any amount. It gives customers a 15-day free trial and customer can pay an annual fee to enjoy the benefits after free trial if they like it.

    As a Walmart+ customer, I feel I tend to buy more online without worrying about delivery costs as many shelves in the brick-and-mortar store are empty during the back to school season. Those products that are out of stock in the store might be available online so I can order with Walmart+ instead of turning to Amazon or other shops.

    The membership fees from customers pay for the curbside delivery labor costs at least partially if not fully.

    As the pandemic worries decrease, I think that panic shopping and stockpiling will ease and that more customers may shift from online to offline store shopping mode because they need to go to the store to buy perishable products which are not available online, and they can just buy all the items that they need in the store at once without waiting for delivery.

    Reply
  76. Wei Ling Huang says:
    August 29, 2021 at 12:40 am

    I would suggest smaller retailers cooperate with Amazon for its free shipping service because small businesses usually do not have economies of scales to build their own e-commerce platform. Besides, Amazon Prime would also help increase online visibility of small retailers.
    For large retailers, take Walmart for example, it already launched Walmart+ membership with free shipping service for online purchases at any amount. It gives customers a 15-day free trial and customer can pay an annual fee to enjoy the benefits after free trial if they like it.
    As a Walmart+ customer, I feel I tend to buy more online without worrying about delivery costs as many shelves in the brick-and-mortar store are empty during the back to school season. Those products that are out of stock in the store might be available online so I can order with Walmart+ instead of turning to Amazon or other shops.
    The membership fees from customers pay for the curbside delivery labor costs at least partially if not fully.
    As the pandemic worries decrease, I think that panic shopping and stockpiling will ease and that more customers may shift from online to offline store shopping mode because they need to go to the store to buy perishable products which are not available online, and they can just buy all the items that they need in the store at once without waiting for delivery.

    Reply
  77. Wei-Ling Huang says:
    August 29, 2021 at 12:41 am

    I would suggest smaller retailers cooperate with Amazon for its free shipping service because small businesses usually do not have economies of scales to build their own e-commerce platform. Besides, Amazon Prime would also help increase online visibility of small retailers.
    For large retailers, take Walmart for example, it already launched Walmart+ membership with free shipping service for online purchases at any amount. It gives customers a 15-day free trial and customer can pay an annual fee to enjoy the benefits after free trial if they like it.
    As a Walmart+ customer, I feel I tend to buy more online without worrying about delivery costs as many shelves in the brick-and-mortar store are empty during the back to school season. Those products that are out of stock in the store might be available online so I can order with Walmart+ instead of turning to Amazon or other shops.
    The membership fees from customers pay for the curbside delivery labor costs at least partially if not fully.
    As the pandemic worries decrease, I think that panic shopping and stockpiling will ease and that more customers may shift from online to offline store shopping mode because they need to go to the store to buy perishable products which are not available online, and they can just buy all the items that they need in the store at once without waiting for delivery.

    Reply
  78. Mu Hua Hsu says:
    August 29, 2021 at 1:31 am

    Due to Amazon’s prime free delivery service, customers might anticipate other retailers providing the service as well. Although it is possible for large retailers to follow up to compete on the same base, it is unreasonable for small retailers to do so. Small retailers don’t have the ability to absorb the cost, especially when pandemics last longer. However, it doesn’t mean small retailers have no chance to compete. They have several advantages. First of all, as mentioned in the article, retailers can build stronger relationships with customers through understanding the customer data, such as their preference to manage inventory, or deep conversation/observation with customers to increase satisfaction. Also, with the data, retailers might have more insight about niche market and provides products fits the customer’s need.
    However, some small retailers might still want to provide free delivery. In such a case, they have to absorb lower-margin since automation. Retailers need to think of ways to increase demands. The bundling strategy might be a potential option since customers might buy more than they expect. For this strategy, customer data, again, is useful.
    As pandemic ease, customers will back to brick and mortar stores. However, it doesn’t mean that the trend of e-commerce will plummet because people already experienced the convenience of online shopping and recommendation systems and become dependent on them. I think retailers can consider an omnichannel strategy so that customers can choose the ideal way of shopping. Also, with the tracking technologies they developed during pandemics, retailers can control the inventory more easily.

    Reply
  79. bmyczkow says:
    August 29, 2021 at 7:55 am

    The interview highlights the importance of store to customer relationships, especially in the smaller business sector where the stores can be more personal and more direct with their customers. However, this customer relationship should not be overlooked even for the bigger retail giants like Target and Walmart. According to the article, one of the primary methods to retain customers and keep people from panic buying is to continue to operate the visible aspect of the operation as normally as possible. In other words, if Walmart continues to operate as normal, with stocked products, and the same prices, customers will be less likely to buy excessive amounts of goods, which in turn will lead to more stable supply chains. What the customer won’t see is that these stores need to change their logistical operations to better match the demand, increasing truck loads, using stocked inventory, and most importantly cutting their margins so as to avoid depleting their supply chains.

    Reply
  80. Zach McClurg says:
    August 29, 2021 at 12:56 pm

    Customers should understand that nothing is really free. Amazon Prime members do pay a fee for this service. This fee likely does not fully cover the cost of the delivers the average Prime member receives in a year, however it puts a dent in it. While shopping on Amazon, you can compare the price of the same product with free delivery to one with a fee. The free delivery item may cost $25, and the one with a delivery fee with cost $20 with a $5 delivery fee. The customer is likely still paying for shipping, but Amazon does a good job making the customer believe it’s free. Many other retailers have started to follow suit and offer free delivery, but they make up for it by raising prices. That will be the easiest way to compete or accept smaller margins or even a loss to win over the customers.
    Regarding curbside deliver, the customer is receiving an addition service that was not as widely used before the pandemic and usually had a fee built into the charges. As with any service received, the customer should be footing the bill. Large retailers like Wal-Mart now offer this service for free which then customers will expect to be free everywhere like they expect free delivery because of Amazon. This will likely reduce margins, but it could boost traffic to the stores. Due to COVID, customers may feel safer by getting curbside service. People may be willing to shop in store more because the know the amount of people in the actual store will be lower because they are using the curbside service. With lower foot traffic in the store, the stores can replace cashiers with the online shoppers’ pickers and delivery personnel. With these things in mind, the store is likely to accept the additional cost for now, but in the long run, will likely transfer the cost to the customer depending on what the new normal looks like.
    I believe many customers will continue their pandemic shopping habits. That includes stockpiling and using delivery and curbside services. The media continues to worry many people on the future of COVID and there will be many individuals who continue to prep for worst case. Additionally, turmoil overseas and even amongst ourselves stateside with push doomsday preppers to stockpile. For many, the convenience of not having to leave your home or car to shop has and will continue to be their new normal.

    Reply
  81. Jiandong Hu says:
    August 29, 2021 at 12:59 pm

    Admittedly, Amazon is the king of online shopping, and it has been stealing market share from traditional retailers increasingly since Covid; however, retailers still have ways to compete with Amazon. Traditional retailers must use data to inform their offline strategies. Retailers need to know a customer’s likes and dislikes, the likelihood of using coupons, gender and locations so that retailers could find the more affordable and effective way to satisfy customers’ demand. Also, AI and machine learning will give the business an advantage when preparing new products and pricing products.
    Free shipping has become an expectation from the consumer’s point of view. Free delivery might be a great way to build sales and market share, but it is unhelpful for margins and profitability. Even Amazon, there is a membership fee every month. I think retailers should have a range of delivery options, including setting minimum thresholds for free shipping, store collecting, or charging is to offset escalating logistic expenses.
    I think online shopping channels will remain popular post covid because it worked pretty well for shoppers, but when covid ends, more and more people return to the office, they will spend much less time at home and go back to their favorite store shopping. Retailers should be well prepared and welcome shoppers back.

    Reply
  82. Sara Yung says:
    August 29, 2021 at 2:29 pm

    During the pandemic, many grocery stores struggled to keep up with demand for specific items like toilet paper, canned goods, and cleaning products. From the pandemic and to prevent stockpiling, businesses enforced limits on how much an individual can buy of a product. Smaller retailers also saw struggles in how to manage demand while also staying profitable. Because of the Amazon Prime expectations, independent retailers have found it increasingly difficult to maintain competitiveness in the market. I think independent retailers can use their advantage of reviewing customer data and maintaining close customer relationships to stay afloat. By understanding their customers, retailers can establish strong loyalties during turbulent periods. The retailers may also have decrease overall profit margins, but if loyalties are established, they should still be able to continue to operate in the competitive market. Another method that grocery stores can consider is curbside delivery to customers. Through this delivery method, retailers will pay for the store labor costs. I think more contactless forms of delivery/payment will become a norm, so retailers need to be flexible to the changing environment. I do believe that online customers will move to in-person shopping when the pandemic worries decrease; however, more people are discovering that online/contactless shopping is more convenient and easier. So, retailers will need to adapt to what their customers want to ensure that they are stable in the market.

    Reply
  83. Vasif Yusifzada says:
    August 29, 2021 at 2:40 pm

    As mentioned in the article, one of the primary responsibilities of the retailers should be to ease customer concerns such as price increases, inventory shortages, whether stores will be open, etc. If the customers see that stores have enough stocks to cover their demand, the stockpiling process will eventually decrease. The retailers should compete by analyzing and covering their customer demand and assuring their customers about their concerns. For example, the article mentions about express shipping, taking full truckloads, and scheduling third-party pickup with direct transportation. Especially during the pandemic, customer satisfaction will increase or decrease retailer’s competitiveness in the market. In this case, e-commerce is one of the important keys to success during the pandemic because you are saving time for your customers and increase the satisfaction level that they receive from their orders. Considering the fact that most retailers offer free shipping to their customers, they need to find a solution to cover the free shipping cost. While it doesn’t seem to be easy for the retailers in the short-run, it can be possible in the long-run. For example, as mentioned in the article, some retailers, like Walmart and Target, are working on robotics and automation strategies to improve their efficiency and decrease their costs. Since it is not possible for retailers to increase prices especially during the pandemic, they need to cut their costs in other sections of their supply chains to cover free shipping costs. Improving e-commerce should be retailer’s primary goal in order to stay solvent in the long-run and be competitive in the market because I think that even after the pandemic, customers will not change their online shopping habits because they have seen that it saves them a significant amount of time and increase their satisfaction level. It is not easy to cover ‘free shipping’ costs for the retailers but as I have mentioned they need to implement cost-cutting strategies in other parts of their business operations in order to be competitive in the market.

    Reply
  84. Li Ci Chuang says:
    August 29, 2021 at 3:04 pm

    In the interview, I think the most two important points that Iyer commented are: do e-commerce efficiently and understand customer data, as small business.

    It is obvious that it is normally in struggles for small businesses to survive and compete with large-scale e-commerce companies such as Amazon. Amazon has free-delivery service, and operates globally, the local business only can serve a small group of communities with shorter-distance delivery. In order to do it better and become competitive, these small businesses should focus on the quality and efficiency, also understand customer needs. When it comes to pandemic period, I think some people went back from online shopping to physical in-store shopping due to the concern of the risk, and most of the purchases were about groceries: they hardly bought some luxurious or furniture things, because they cared more about on necessity, such as tissues, hand soap, etc, and they were afraid that there would be out-of-stock. In-person shopping reduce this kind of risk significantly, and all the company, no matter they are small, medium or large, they should take method to flexible operations.
    However, after the pandemic, it’s possible that the online shopping will resume, putting more tight competition for all the companies: those succeeded during pandemics will attract more customers and keep existing loyal customers. It’ wll be new challenge that others come up with more innovative method to meet customer changing needs.

    Reply
  85. Chi Wen Chen says:
    August 29, 2021 at 3:52 pm

    Retailers, no matter their scale of size, though, are experiencing difficulties but they are also facing a good opportunity to compete with those giant e-commences. During the pandemic, customer behaviors have changed a lot and they prefer to place orders online. However, customers, as humans, are still having this tendency that they want to have real interaction with others and that’s the point that retailers can do better to gain a comparative edge. Let’s say, retailers can provide curbside delivery to customers, which allows them to have a combination of physical shipping experience and free-contact transaction.

    Reply
  86. Wenbo You says:
    August 29, 2021 at 4:10 pm

    The business environment has changed dramatically during the pandemic, and customers’ favor has greatly shifted to online shopping.
    I believe that under the current business environment, it is viable for larger retailers to step up their game and face the challenges from online retailing as customers demand free delivery due to Amazon Prime expectations. Though it takes great operational and logistics effort and investment for some retailers to have a free delivery service like Amazon’s Prime Now, having such services is an ideal way to prevent business decline during the pandemic, and also an opportunity to grow in the online retailing market. As Amazon crashes the traditional retailing business, growing in the e-tailing market and develop their delivery service to match customers’ expectations is a great way for the larger retailers to counter Amazon, both for now and the long run, and the pandemic is the perfect time. The labor costs of curbside deliveries should ideally be covered by the third-party sellers, or the retailers themselves whose shipping costs can be reduced overtime by economies of scale.
    For smaller retailers, I suggest going for the no-contact self-pickup services. It is cost-efficient while being able to satisfy a certain range of customer demands during the pandemic. They can also set a minimum spending for online orders if they decided to implement free curbside shipping.
    Most customers will likely remain in this mode as the pandemic worries go away. After all, online retailing is growing into the mainstream, and the pandemic let more people felt the convenience of online shopping, which further boosted the trend. It has become necessary for retailers to utilize digital media to expand into e-tailing, and for any retailers that are already in the market to grow fuller.

    Reply
  87. Rubin Mao says:
    August 29, 2021 at 4:11 pm

    It is hard for local retailers to compete with Amazon, which is like an ant trying to an elephant. But either small retainer and Amazon has their own advantages. Amazon has more products for sure, complete and standardized operation procedures and experienced workers. However, small local retailers have their advantages that Amazon does not have, which is the closest distance with local communities and residents. Amazon prime shipping depends on the local distribution center to determine the time needed for shipping, quickest as second day delivery. However, local retailers have much less orders to process and closest distance with customers. If they can take advantage of it, their deliver time can be counted in minutes. For the same product, will a customer wait for 24 hours or 60 minutes?
    To pay for the labor cost, one way is to increase the price by a small portion, only to online customers. This strategy is common in food delivery industry. Secondly, to work with some experienced delivery company, including logistics company like USPS, UPS, Fedex or food delivery company like ubereat, doordash, will also be good. Their drivers are more familiar with local addresses and their mode is more mature to minimize costs.
    I do believe there will still a lot of online customers remained after the pandemic worries decrease. Once people got conveniences from this mode, they may not stop. Not many people treat the shopping in market as interests or fun. For most of them, it is just a job to buy all the things they need for survival. If someone else can do this for you, all you need is to select what you need on an App or website and pay, why wouldn’t you choose? Especially, there are not extra charges and you do not need to spend many efforts like driving a car or possibly carrying heavy staffs?

    Reply
  88. harishgavva says:
    August 29, 2021 at 4:46 pm

    Due to the pandemic situation many customers who used to be regular visitors to the small retailers are now ordering things online now this might reduce over a period as things get back to normal but still, I think going forward customers will prefer a hybrid of both, so the smaller retail chains can compete with Amazon prime by reacting to the ever-changing customer needs in a rapid manner. Walmart already started using inventory pooling during the pandemic to offer same-day delivery to the customer. They have also invested in technology like using robots to improve the logistics. Smaller retailers can also reduce their costs through optimization of supply chain and hence can use those savings in improving their margin after offering free delivery. the retailers have also started providing last mile delivery to the customer(curbside) and after the pandemic this will continue to serve majority of the customers in my view. These retailers can also try to partner with the local delivery companies in order to decrease their investments in labor costs this will benefit both the parties involved to sustain in the long run.

    Reply
  89. Vinay Krishna Devulapalli says:
    August 29, 2021 at 4:51 pm

    It is not wise to pass on the costs directly to the customer as that would negatively portray the picture, especially during the pandemic. Small retailers need to have appropriate customer profiling to cater to their needs better. Beating the big league like Amazon and Target on prices is not possible, but instead, these stores should focus on building personal relationships with the consumers. In the long run once, the customers are accustomed to the store, an increase in prices could be passed on to the customer by taking a direct opinion. Walmart can provide additional services due to economies of scale and efficiently automating the supply chain. All of these helped them in realizing higher profits in past quarters. Compared to 2020, the pandemic worries had decreased, and many customers have regained confidence that the supply chain is stabilized. Hence the buying trends to the daily usage products are at pre-pandemic levels without much stockpiling. To further decrease stockpiling, stores can assure the customers of having stable prices and inventory.

    Reply
  90. Hasit Yarlagadda says:
    August 29, 2021 at 4:58 pm

    Due to the pandemic there has been a huge change in the consumer buying behavior. Either the consumer is worried about the future increase in prices or shortage of goods or shut down of supplies. For all the above reasons consumer have started buying more even if it is unnecessary at the moment. The retailers are unable to predict this demand since this has never happened in the recent past. Retailers should try to focus on making the customer knowledgeable rather than trying to tackle the high demand and stockpiling. They should try to assure the consumers that they will sell the goods at the same price for a period. This will ensure that the consumers are not panic buying and would prevent stock outs. In this pandemic time, online shopping has become very common and if retailers are not ready to offer this, anybody would want to shift to Amazon which is more reliable and offering this delivery option from quite sometime. Curbside delivery is also a facility which is being used highly during the pandemic situation. It would be difficult for small retailers to pay for the store labor costs associated with this, so they could charge a minimal fee for this but should still keep this feature available. If they remove this feature, they might lose customers which might be a greater loss. They should try to make up for the loss due to curb side pickup costs or free shipping charges by reducing the costs in packaging or other manufacturing. I strongly believe that there will not be much effect on the volume of online customers even after the pandemic worries decrease, since the customers have been accustomed to that and it offers them convenience and the supply chain is also modified to cater this mode.

    Reply
  91. Darsh Shah says:
    August 29, 2021 at 5:26 pm

    As clearly mentioned by Dr. Iyer in the article, customer satisfaction is the ultimate goal which is primarily served by companies like Amazon. One strategy that small retailers can use is by collaborating with their competitors and pool the risk of stock out. But collaborating with competitors is difficult to achieve and often not possible.
    The other option is that retailers should identify products that are not offered by competition and try to sell it on Amazon to incorporate the shopping basket effect.
    Regarding the store labor costs, customers and retailers should pay a part of the store labor costs making it feasible fair for both parties. Alongside, big companies should also bring in capital projects to automate the pickup process. All small and big players should try and incorporate more process improvement and six sigma projects to identify areas where costs can be reduced. Reduction in operating costs is the best way to keep the downstream costs attractive for customers.

    Reply
  92. Brian Mbui says:
    August 29, 2021 at 5:44 pm

    The retailers here are caught in a very interesting situation because they must figure out how to cater for the extra costs that come with curbside and home delivery. This comes with no option as the only other way around this would be to transfer the bulk of the cost to the customer and this will drive them away which is not good for business. If customers would retain some flexibility on their end and not hold the small retailers to the same standard as the giants in the industry who can afford to take a hit while adjusting to market forces, then the small-scale retailers would have just enough time to figure out their operations so as to cater for the new trends of the e-commerce industry. They could choose to offer free deliveries after a certain number of purchases has been hit or they may choose to cater for a percentage of all deliveries and keep balancing the scale back and forth until they reach a point where the customer is satisfied and the business is not hurting from extra costs. While this is happening, the giant players need to be regulated on how they are setting the competition for the rest and if it is a healthy trend for small scale retailers in the long run.

    Reply
  93. Soheil Zargami says:
    August 29, 2021 at 6:13 pm

    I do not completely agree with the article, at least to some parts of it. There is a part that it mentioned “Retailers may need to be flexible regarding the brands they carry”. During the pandemic brand verity should not be the focus for the retailer. If we focus on hand sanitization and/or toilet paper, even though customers have preferences, during a panic purchase, brand verity is not as important as the product availability. This is just my opinion, but from what I experienced the availability of masks, toilet papers, hand sanitizers, milk, bread, is much more important and vital to me than number of brands available for these items. To surviving the pandemic brand choice plays a small role, at least for me. Instead, I think they should focus on procuring high volume for these important items.
    I believe the companies who have self-checkout, can use their store associates to help out with the curbside pick-ups. Self-checkout reduce the need of associates on the register to a ration of 1 employee to 10 register. Therefore, the other associates can do the curbsides pick-up at minimal cost.

    Reply
  94. Chou Yen Hung(Misha) says:
    August 29, 2021 at 9:12 pm

    I would highly suggest smaller retailers work with Amazon because they won’t have chance to approach wide range customer as Amazon had. Furthermore, smaller retailer doesn’t have enough resource to build their own logistics system. Furthermore, Amazon Prime can reach more customer base even in outside of US.
    Small retailer should also add up pick up services as Walmart or big supermarket does although they should hire more employees to deal with pick up service. People who use pick up service tend to want products as fast as possible. Therefore, if some products in big retail stores are out of stocks. Small retailers will have chance to approach new customers.
    Besides, small retailer also can do deliver service if they have more labor because Walmart+ or Amazon can’t deliver that fast than local provider. Normally will be 2 or 3 days. This will also give chance to small retailer. Even in pandemic time, deliver service will be crucial for many people.

    Reply
  95. Chou Yen Hung(Misha) says:
    August 29, 2021 at 9:37 pm

    I would recommend smaller retailers cooperate with Amazon Prime because they have free shipping service to all over the world and help small retailers to have more public chance to approach new customers because building up an fast logistics system and an attractive shopping system will be very difficult for small retailers.
    Furthermore, I think small retailer should develop pick up and deliver system(work with local delivery company) because if big retailer such as Walmart are out of stock small retailer will have big chance to take over these customers because normally Walmart or Amazon need 2 days delivery time and many customer sometimes will need product urgently.
    Take myself as example, I will always buy water in Walmart. However, in back to school season. Water are always out of stock because of high demand. Using Amazon or Walmart+ I will need to wait 2 days time to wait for my water. So I will search for small local shop for pick up service.
    In this two years pandemic periods, more and more people choose to buy online or pick up services in order to not get in touch of people. However, I think the pandemic would be terminated in these two years and people will be back to normal buying in a small shop. Therefore, adding up self check service will be also another choice for small retailer to consider.

    Reply
  96. Anupam Choudhury says:
    August 29, 2021 at 11:40 pm

    Unfortunately, small retailers cannot compete with Amazon on price and variety, but fortunately for them, online shopping cannot always replace the merits of in-person shopping. Small retailers should rather focus on customized service and speed of service to compete with big online and offline retail giants. Customized service always doesn’t mean that you need more manpower, but rather better manpower infrastructure and ambience. Customers should be treated like guests rather than another customer which big retailers cannot ever achieve. There is always an inherent advantage of being local and that advantage needs to be leveraged to achieve success in business.
    For other big retailers and brick and mortar stores competing with Amazon, they should again focus on their proximity and speed of service rather than just price. I agree that price is a big differentiator but local retailers should focus on their strengths and not their weaknesses. I am a firm believer in the phrase ” nothing is free” amazon can afford free deliveries cause of its unique business model, but that also comes at a cost of a yearly Prime membership fee. Other big retailers with brick and mortar infrastructure can still offer comparable services like pick up and stock pooling by making use of the latest information software and better membership deals rather than just free service.

    Reply
  97. Vikram Narendra says:
    August 30, 2021 at 12:12 am

    The Pandemic has only accelerated digital technology, and the more prominent retailers have pivoted well to adapt to these changes. The future is an omnichannel strategy where the customer has multiple options to get the supplies. Retailers can compete with Amazon and other E-commerce companies through virtual stores and inventory pooling. With access to data, we can make better predictions about forecasts and optimize inventory. Smaller retailers can collaborate with retailers to have their inventory integrated and work towards online delivery. I think there is a future for everyone as we slowly come out of the Pandemic.

    Reply
  98. AKSHIT JAIN says:
    August 30, 2021 at 12:58 am

    In order to compete with retail giants such as Amazon Prime, Target and Walmart, small retailers would have to provide free delivery option on transaction of certain minimum amount. But, talking about free delivery option from Amazon Prime and Walmart we need to be clear that this free delivery is actually not Free – customers have to pay annual subscription fee to avail these services. Similarly, instead of developing delivery infra by themselves, retailers can tie up with 3rd party delivery company to carry out delivery of their products to the end customers, with increase in customer revenue and profit margin, retailer can expect great benefit in long term, because free delivery option will become major competing factor in retail market. For example, even after launch of Covid-19 vaccine in market, major portion of population still give preference to online shopping instead of retail shopping, because of time saving, availability of discount vouchers, ease of operations and health safety. Retailers can still gain competitive edge even in these market situation by ensuring same day delivery of perishable foods + essential items, maintain good product quality and keep their customer base satisfy by ensuring continuous delivery of goods without any sudden increase in product cost. With correct strategy and demand forecasting, small retailers can excel in today’s competitive retail market.

    Reply
  99. Nilo Cedeno says:
    August 30, 2021 at 2:22 am

    Since this commercial world has showed enough capacity in business people who develop strategies to sell and to improve qualities in services and products, excellence is what customers expect in every transaction. What have Amazon done? As the interview mentioned, they have reduced the stress in customers; the stress to go outside and get what they need (if there is availability). They put what customers need in the front of their doors. Is this easy? Well, it is not, and behind this there is a huge amount of money that small retailers just think how they can do to improve Amazon’s supply chain management. Then Walmart, Target, and other retailers developed strategies to at least offer their customers a new experience buying from home frequently because of the pandemic. What happened? Probably this happened to all customers who experienced a purchase using any other retailer but Amazon: they thought that the purchase’s experience with Amazon has not comparison. However, thorough the time everything improves and these few retailers that have strong financial muscle sharped their e-commerce. By the other hand, there are several small retailers that have struggled a lot due to the big retailers’ operations and prices. To conclude, the only strategy that really matters for retailers (apart from generating revenues) is to convince people to buy their offer, and this happens when purchases are easy with convenient prices. Retailers should reinvent the way to sell.

    Reply
  100. Colton Kaplan says:
    August 30, 2021 at 9:40 pm

    Since COVID-19 began retailers had to adapt significantly. As customers are used to Amazon Prime’s free delivery other companies have to do what they can to compete. Walmart has created Walmart + now which is currently cheaper than Amazon prime at $12.95 a month or $98 a year. They also just launched GoLocal where they will expand their capacity and work with small businesses. Additionally, using their omnichannel network they allow customers to pick up groceries outside of their stores.

    In order for other retailers to compete with Amazon, I believe the procurement teams need to work with the suppliers to develop better rapport, focus on high-velocity items, and increase their margins in the long term. For the time being Walmart and the other big retailers should take on the costs by allocating more of their labor to picking those orders and use automation in the stores to replenish the items on the shelves.

    For small businesses to survive they have to use new software to keep track of their inventories and use all the data from their customers to implement new strategies.

    I believe e-commerce is here to stay in the long run. While some customers do enjoy going to the store to shop there is a significant amount of people that will stick to online shopping because of the convenience factor. It allows people to use their time in other ways.

    Reply
  101. Daniella Cobos says:
    August 31, 2021 at 10:12 am

    One of the ways that small retailers can compete with amazon would be by offering same day delivery. They could have a preset amount of deliveries in a given day, and take all of them at once to save on transportation costs. It is important to note that people still want the experience they get when they go in person and shop. They could advertise free delivery but charge for a premium membership like amazon does where it includes the free delivery. This way the customer would pay for the extra labor without necessarily “feeling” the impact. Post Covid-19, I think that people will still conduct a great part of their shopping through e-commerce. The reason for it being easy, accessible and it goes to your door.

    Reply
  102. Haoning Wang says:
    September 5, 2021 at 12:13 pm

    As we all know, the COVID-19 pandemic influenced a lot of businesses. They should change their business model in order to adjust to the trend. According to the reason why retail grocery customers might be stockpiling, I will say that this is a good way for them to keep a good safety stock. Due to the pandemic, some kinds of groceries item like hand sanitizer, water, and toilet paper are in high demand. If the retail operators want to satisfy the customer demand, they should keep a good safety stock to remain fair pricing. In this situation, the customers are willing to achieve some contactless grocery shopping. The retail operator should offer some online grocery shopping to reassure customers. The retailers can cooperate with some local delivery companies. The contactless agreement should be signed by them. If the delivery fee is as low as $2, I believe that the customers will take cover the delivery fee other than taking the responsibility to go to the stores. Once the customers get used to online grocery shopping, they will keep this habit in the future for sure.

    Reply
  103. Kristian Komlenic says:
    September 5, 2021 at 6:24 pm

    I would say that smaller retailers should focus around the customer. Offering free next day delivery can be hard but to what extent. I do think we should carry, as consumers, little responsibility on our size/frequency of orders. If you as a retailer are able to separate consumers into brackets and offer deals based on size/frequency. As a consumer who pays $80/week vs $150 for groceries. How are you able to charge me the same as someone who is not a “rationale” consumer? Retailers that are emerging in market, if they are able to offer discounts on purchase size or frequency you make, based on your trend of your orders this will be able to push the margins and save some costs. I do understand this can negatively impact on how consumer will see you but there would still be demand for “rational” consumers to pursue. If I make once a week a purchase, you as a retailer should offer me a deal on having free next day delivery and cover the cost. For infrequent and not rational consumers, who are afraid we will not have this item tomorrow then you carry part of the cost on his end to recover part of profit margin. If retailers are investing huge amounts in automation, then they should recover cost on their end and have shorter margins at the beginning. This will allow us consumers to order frequently and have more precision on how much inventory I need to carry.

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