Loss Prevention Research Council Weekly Series - Episode 57 - COVID-19 Vaccine Research and Winning Retailers' Strategies
With Dr. Read Hayes, Tony D'Onofrio, and Tom Meehan
The Countries Funding Covid-19 Vaccine R&D
https://www.statista.com/chart/24808/top-sources-of-covid-19-vaccine-funding/
The top five countries funding vaccine research and the amount they are spending:
- United States - $2.23 billion
- Germany $1.51 billion
- United Kingdom - $500 million
- European Union - $327 million
- Canada - $283 million
The World's Most Powerful Passports
https://www.statista.com/chart/15751/the-number-of-visa-free-countries-passport-holders-can-visit/
Based on the numbers of countries that people can travel to without a VISA
- Japan – 191
- Singapore – 190
- South Korea – 189
- Germany – 189
- Spain, Finland, Italy – 188
- USA – 187 – Equal to New Zealand, Belgium, Switzerland
Winning Retailers: What characteristics separate winning retailers from competitors
https://www.ihlservices.com/product/winning-retailers-what-characteristics-separate-winning-retailers-from-competitors/
There can be many definitions of what a winning retailer might be, but for this research we defined a winner for 2020 as a retailer that saw total sales increase of 10% or more.
Of the winners, 57% were long-term privately owned companies. The other 43% were large public companies. None of the winners in our study were owned by private equity companies. Part of this was due to segment differences, but we feel strongly that long-term private companies were able to pivot faster due to culture and that public companies succeeded due to their store portfolio and access to almost unlimited capital to take advantage of the pandemic surge opportunities.
On average, winners’ store walk-in business grew 18% alone and then the digital orders on top of that; making it clear that while digital orders got all the news headlines, it was the stores that were the stars in 2020. Only 7% of the total sales in winners came from an online order that was completed via a warehouse or fulfillment center. A full 93% of all the business had a store component.
Looking at 2021, winners are reporting a 7% planned increase in total IT spend across the enterprise. That spend includes support for store pickup at a 7.7% increase, traditional store IT spend at 4.5% increase, and 4.2% growth spend to support local delivery.
The point is that winners are continuing to double-down on IT expenditures at a level up to 4x the growth of other retailers and this is leading to significant performance separation.
Winning retailers are taking advantage of the pandemic to accelerate touchless shopping options. These can range from self-checkout, kiosks, electronic shelf labels, click and collect, touchless delivery, customers using their own devices for checkout, and even contactless payment such as tap and pay or things like Apple/Samsung Pay.
the number 1 priority for 2021 is the deployment of touchless solutions of all types which rated 178% higher for winners than other retailers.
Which technologies are they investing in at a much higher level than others? Before we address that, let us first look at technologies that winners are using at a much higher rate already.
There are four specific technologies that winning retailers have already deployed at a much higher rate than others. First is the use of voice recognition specifically for order picking and inventory. Winning retailers are 214% more likely to already be using this technology. This is critical as using voice frees the hands of associates to do picking, sorting, and other activities. Further, workers can hear the commands in their native languages, removing possible confusion which speeds production.
Next is the investment in self-checkout at a use already 124% higher than average. As we will see later, winning retailers were not just already using self-checkout, but are doubling down on the technology, adding more units to existing stores and in some cases even having entire stores move to self-checkout.
NEW PERSONAL ARTICLE
Back to the Post Pandemic Bright Future of Physical Retail Stores
https://www.linkedin.com/pulse/back-post-pandemic-bright-future-physical-retail-store-tony-d-onofrio/
Despite the coronavirus pandemic’s impact on how we work, shop, and entertain ourselves, the retail industry has managed to adapt in the face of these challenges. Although e-commerce has played a bigger role in retail sales than before the pandemic, the “retail apocalypse” has been largely overstated. In fact, with brick-and-mortar sales generating over $18.5 trillion in the United States in 2020, I anticipate that the physical store will continue to act as the epicenter of the post–COVID-19 retail experience.
In a recent survey of retail technology trends and spending, RIS News found that 31.6% of overall USA sales now come from digital channels, compared to 23% last year. As discussed in my last article, worldwide e-commerce sales spiked 27.6% in 2020 because of the pandemic but will drop to 14.3% growth in 2021. By 2024, 78% of retail sales will still take place in physical stores.
COVID-19 has become a brutal accelerator of digital transformation trends that were already underway. The physical store will remain a critical component to the retail success mix, but its level of digital connectivity to the consumer needs to dramatically increase.
In the article I list the technologies that retailers are currently invest in which includes RFID, digital devices, electronic shelf labels, etc.
With sales extending beyond the store into the parking lot, the retail store now plays a major role in online order fulfillment. Experts predict that 70% of retailers will offer curbside pickup by 2023 while 80% of retailers can provide in-store pickup and return options to customers by the same year.
The biggest challenge that retailers need to address in order to succeed in pandemic-accelerated digital integration is inventory distortion which is a $1.8 trillion worldwide problem.
Inventory accuracy has been elevated to the most critical asset to keep consumers happily shopping across harmonized retail channels. New technologies such as RFID and computer vision, which I have discussed in previous articles and podcasts, are increasingly being deployed to meet this challenge.
In the article check out all the different data that retailers are currently mining.
Retail is, as it always was, about helping loyal customers getting their merchandise when they want and where they want it. In a post-pandemic world, this now translates to product availability online with fast delivery, on store shelves, and at curbside, with the flexibility to switch among these services for an increasingly convenient and positive shopping experience.
Summarizing this week:
- The investments in COVID-19 vaccines in USA is paying off as we start to come out of the crisis and ahead of regions such as Europe.
- We will start traveling again as I was reminded by the world’s most powerful passports.
- Technology is a key differentiator of winning retailers and remember you can leverage LPRC to add value to those technology investments.
- The store will remain the epicenter of the retail model for a very long time.
US Invested over $1 Billion in Vaccine Development and Pipeline Shutdown by Cyber Ransom Ware Attack! In this week’s episode, our co-hosts discuss these topics and more, including the testing of mixing vaccines, the Largest Retail Investments in 2020 by Top Retailers, the Retailer Investment Type that “Winning Retailers” use, and the possibility of protests within the US because of Gaza Strip Violence. Listen in to stay updated on hot topics in the industry and more!
