In last week’s article, we reviewed some of the ways that Tractor Supply Company used both situational advantages and corporate nimbleness to move through the pandemic with positive momentum. Obviously, TSC had some tailwinds that other retailers did not have as the pandemic’s effects were felt. What are the equivalent changes we anticipate as consumer behavior begins to stabilize toward a new normal? What can we anticipate as 2021 unfolds, with the prospect of widespread vaccination? Looking at how other countries like New Zealand and China have re-adjusted can help provide some insight into new needs.
- Back to normal behaviors – kind of: As a New York Times article highlighted, behaviors in New Zealand over New Year’s Eve looked much like it used to. Few masks were seen, and people were partying on the beaches like it was 2019. It is likely that, once vaccination numbers reach high thresholds, consumers’ pent up desire for some aspects of “normal life” will break free. Businesses need to be prepared to address which consumer changes are likely to move from a trickle to a gush first, as well as how they will have morphed. (Ex. Going out regularly – but doing so in much more relaxed and comfortable apparel)
- Nimbleness is not optional: TSC demonstrated the importance of being nimble in addressing both personnel, store, and inventory needs. Just 3 weeks after the above New York Times article was published, a COVID-19 South African variant case was confirmed in New Zealand. Contact tracing commenced and some nearby countries instituted short-term blocks to free movement between the countries. Businesses must be ready to address short term and localized soft lockdowns.
- Some jump-started trends will not change: Digital behaviors (at least, when they met with positive experiences) will likely continue at high rates. Work from home for office-workers is another well-publicized genie that is not going back in the bottle. Delta is already talking about what international travel will look like and how it will be different in the near future. These change continuance areas create new opportunities for businesses to serve niche needs that have grown exponentially in the past year.
The Takeaway
It can be very easy to become defense-oriented during times of large-scale change. Managing to a bottom line and shareholder expectations create significant managerial pressure to be conservative and judicious. Small bets pay off… in small ways. Retailers need to see this changing market as a chance to find and size the new opportunity, evolve to support consumers’ changing needs, and deliver consistently against the values and principles that the company stands for.
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