As the COVID-19 pandemic continues to spread worldwide, food retail industry is facing reduced consumption and supply chain disruptions. The COVID-19 pandemic has had a severe impact on the commodity prices and demand for essential and non-essential items. Besides, recent studies show that two out of five people in China are focusing on health and well-being in the light of COVID-19. As such, food retailers in China will need to revisit their sourcing strategies, streamline product offerings, and assess the agility of their supply chain operations.
The client is a global food retail manufacturer and supplier with manufacturing units in China.
Owing to consumers’ increasing focus on health and well-being and rising preference for local brands, the client faced difficulties in addressing these consumer shifts. Consequently, they encountered a steady decline in sales for three consecutive months. Besides, as home delivery orders increased rapidly, the client faced challenges in meeting customers’ delivery requirements. The client, therefore, realized the need to scale up their e-commerce channels and their capacity for home delivery. In addition to this, the client noted that their customers were interested in reasonably priced products as they were worried about the pandemic’s impact on their incomes. The client, therefore, wanted to revamp their pricing strategy to meet their customers’ needs. Also, the food retail industry client wanted to understand the potential market opportunities and prepare themselves for the next half of 2020. Besides, they wanted to take longer-term actions to position companies to succeed in the post-COVID-19 business environment.
Other key challenges faced by the Chinese food retail industry client were:
- To communicate efficiently with customers and retain valuable customers
- To evaluate spend and identify potential reductions in cash outflow
- To review inventory and assess supply chain disruptions
- To enhance digital presence and build a stronger e-commerce business
- To prepare for reopening stores post-COVID-19 crisis
- To reassess merchandising plans for the post-COVID-19 era.
As businesses across various sectors grapple with the COVID-19 pandemic, food retail companies must outline action plans to combat the impact of coronavirus outbreak with resilience. We can help you achieve this strategic objective. RFP here.
Our Integrated Approach
In the initial phase of the market opportunity identification solution, our experts conducted market segmentation analysis and helped the food retail industry client to segregate customers based on their value for the brand. Also, the experts conducted a financial analysis of the company and helped the client examine spend and identify potential reductions in cash outflow. This phase of the market opportunity identification solution also involved the creation and mapping of the client’s potential opportunity post-COVID-19 crisis from an R&D and competitive perspective.
In the second phase of the market opportunity identification engagement, the experts helped the food retail industry client to prioritize and select best-fit opportunities and formalize technology acquisition strategy. This phase also involved preparing the client to reopen the store and reassessing merchandising planning for the next half of 2020.
The last phase of the engagement involved a detailed addressable market analysis of selected best-fit-market opportunity in terms of market attractiveness, competitive factors, and end-user preferences. Besides, the engagement involved mapping a strategic journey to financial resilience, building an operating model around digital, and anticipating a shift in customer buying behavior.
With Infiniti’s market opportunity identification solution, the food retail industry client was able to stay abreast of the impact of COVID-19 on their business operations. By segregating customers into various groups based on their value for the brand, the client was able to communicate frequently and clearly about strict hygiene practices in-store and new safety procedures for handling online deliveries. This helped the food retail industry client to build the trust of customers and retain valuable ones.
Also, the food retail industry client was able to examine the company’s financial spend and identify new ways to achieve a reduction in cash outflow. Furthermore, by closely reviewing in year inventory position and assessing supply chain complexities, they were able to adjust inventory for the post-COVID-19 period. The experts also recommended the client to enhance digital presence and shift media spend to online channels. This helped them to maintain engagement and boost online sales during this critical period.
In addition, as customer behavior and preferences may have changed during the crisis, the experts recommended the client to reopen stores with a new operating model centered around customer engagement. Besides, the experts recommended the food retail industry client to reassess merchandising plan for the second half of 2020.
As a longer-term strategic action, the experts recommended the food retail industry client to map a strategic journey to financial resilience by giving a greater share to online channels and exploring new ways of partnering with e-retailers.