by Anh H. Nguyen
Barely a quarter into the new decade and the world is already at the cusp of the worst financial crisis since 2008. China, indisputably one of the world's largest economies as well as the definitive global manufacturing hub, has virtually shut down. As a result, the world's economy has been put in survival mode. Markets are expected to fall further and global growth could be cut in half if outbreaks continue to escalate. In Vietnam, although the government so far has delivered stellar success in containing and controlling the virus (all 16 confirmed cases have been cured), the financial outlook does not look so cheerful, especially for retailers.
As China's next door neighbor, Vietnam has felt China's influence since time immemorial in almost every single aspect of life: its language, culture, history, and economy have always been intimately intertwined with those of China. In the present, the two countries are mutual voracious consumers of each other's products, we heavily rely on China for material supplies and cheap goods, Chinese tourists make up one third of the total number of travelers to Vietnam. For better or worse, Vietnam could not and would not totally escape China's reach. Now, China's strain has put Vietnam and its retailers in a vulnerable spot. Vietnam retail is currently under a heavy burden of dwindling traffic and disruption in the supply chain.
However, this is not the world's, nor Vietnam's, first rodeo. As history has shown, the retail markets typically dip during a crisis (e.g. the SARS outbreak in 2003 or the Fukushima disaster in 2011), but eventually stabilize. (Bain, 2020) In the face of adversity, retailers need to think long-term and have strategies laid out not only for during but also after a crisis has passed. In our previous article, we outline how AI and Palexy in particular could help retailers withstand the financial shock of coronavirus. In this one, we present several other usages for retailers if they want to bounce back quickly after the epidemic.
1. Ensuring the quality of staff's performance:
This is a nerve-wracking time for retailers: consumer demand declines while operating costs remain the same or even increase. As a result, many retailers have to close multiple stores or even let employees go. Fewer customers mean fewer interactions, and sales staff's skills could go rusty during this period. Sales staff also likely to face personal financial problems of their own, which could result in lackluster assistance. But as the previous article has stated, it is crucial for sales staff to maintain a high level of service, not only to make the most of the reduced traffic, but also to guarantee that they could keep up with the inevitable influx of customers when the market springs back. The cosmetics and fashion sectors are especially susceptible to this "dip and rebound" pattern. Palexy allows retailers to track the interaction rate between customers and sales staff, so that they could both increase conversion rate and prepare for the renewed demand.
"Dip and rebound" pattern demonstrated by Bain, 2020
2. Reinforcing customers' loyalty:
Customers' loyalty is a fickle breed, hard to gain and harder to keep. During ultra-stressful times such as the coronavirus outbreak, the public mood could be unpredictable. One thing is for sure, though: customers like stores to keep shelves full and prices stable, and not brazenly take advantage of their plights. The swift boycott of certain pharmacies in Vietnam that jacked up the price of face masks and hand sanitizers was a shining example. If retailers could project the optics of reliability and proactivity, they could both secure the support of old customers and gain new ones. Daily necessities retailers like supermarkets and convenience stores fit this pattern the best. Palexy's In-Store Customer Analytics could visualize store traffic distribution, dwell time, and shopper profiles across different stores to identify products that capture customers' interest, introduce new products to their roster, allocate staff for maximum efficiency, and tweak marketing campaigns to fit their desired customer demographics. Based on data gathered, retailers could even alter customers' preferences for good.
Keeping supply under control is a challenge when pantry-stocking and panic buying behaviors prevail.
3. Providing the basis for omnichannel marketing:
One trend is visible during these days all over: as people go out less to avoid crowds and take care of their children as schools are closed nationwide, they also spend more time shopping online. In fact, retailers that have a digital presence tend to fare better than ones that rely on brick-and-mortar stores only. So the strategic implication for Vietnam retailers is to invest in an omnichannel. Palexy helps complete a thorough, insightful picture of in-store customers, which retailers could then use to maximize customers' experience and increase brand visibility. The sooner retailers select a robust AI tool, the earlier they get concrete results to implement their omnichannel. Even when this crisis subsides, this will boost their profit and strengthen their adaptability for the future.