Based on the latest KPMG analysis emerging community shops and online shops have increased their trading volume and attracted a mass of new customers during and after COVID-19 outbreak in China. Current situation may introduce new opportunities to those retailers who are able and to rethink their business model. In line with trend of long-term business development, enterprises should strengthen their capabilities in the following areas:
- "Omni-channel" marketing and digital retail capabilities. This is a chance to embrace technology and upskill employees. Retailers will be then able to reach out to consumers more actively. Innovative business models can help reduce margin costs via investment in automation or AI.
- Big data on footfall, customer profiles and shopping preferences can help retailers judge which store locations have the best long-term value, and which could be replaced by online sales to improve overall sales and cost efficiency.
- Improve the supply chain network and ensure all products have more than two suppliers. Supplies should be guaranteed by setting a reasonable inventory level. This action ensures that plants have contingency plans and also further drives the restructuring of the industry and eliminates over reliance on top tier suppliers.
- Invest more in automation and artificial intelligence, such as robotic process automation (RPA), automated replenishment systems, AI deep learning, to reduce labour costs in the long term.
- Retails apps should be fully utilised to ensure communication among employees, suppliers and logistic vendors.
Do not hesitate to contact me in case of any questions about this topic – Ivana Mazániková, Partner responsible for retail and consumer markets.