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10 Retail Companies Pivoting Their Business Model in Response to COVID-19

No one was prepared for what the COVID-19 pandemic has brought upon the world. Social isolation has pushed some companies out of business, forcing others to reorganize the way they work in order to stay afloat.

Among others, they had to shift their supplier strategies due to social distancing, introduce new and reposition their current products so that they correlated with the new, lockdown lifestyle, and introduce new, contactless delivery methods. 

In the following article, we’re going to discuss how 10 retailers, including IKEA, Woolworths, and Best Buy, pivoted their business model to operate effectively in this new reality brought by the pandemic outbreak. If your business has also been impacted by COVID-19, you’ll find tried-and-tested strategies and solutions that will help you adjust to this difficult new reality.

10 Retailers that pivoted during the COVID-19 pandemic 

1. Woolworths 

wollworths covid-19 business

Woolworths is a South African retail chain for homeware, fashion, and beauty. Although, prior to the pandemic, the retailer already featured an e-commerce website, online shopping was never as prevalent in South Africa as in Europe or the United States. 

Once the virus spread across the country, the retailer decided to introduce two changes. Firstly, Woolworths started offering essential groceries in addition to their homeware, beauty, and fashion lines.

Secondly, in order to make shopping as safe as possible, they introduced a ‘Click & Collect’ module, which allowed customers to order items online and pick them up from a parking lot. This method allows customers to never leave their car or come into direct contact with staff. As of April 2020, Woolworths announced that they would be testing the solution at 14 locations across the country

The results of introducing groceries into their offering, as well as leveraging this new distribution channel and product offering are yet to be revealed.

 

Source: Woolworths 

Business Pivot: new product/service, new distribution channel

2. IKEA

ikea during covid-19

IKEA is a Scandinavian chain that sells ready-to-assemble furniture and houseware in a warehouse-like space. IKEA owns stores in 38 countries and territories and employs over 211,000 people. In addition to having a warehouse, IKEA also has several brick and mortar shops. 

Their e-commerce business has remained fully operational even as stores closed to the public. It utilizes e-commerce as the cornerstone of their business and took steps to improve the online experience for customers. Since online shopping was used more heavily throughout this time, new services like contactless delivery (“Click & Collect”) were also introduced to protect customers and workers. 

Business Pivot: new distribution channel

3. Coach 

coach pivoting in response to covid-19

Coach is an American fashion luxury company. It sells accessories such as bags, footwear, jewelry, eyewear, watches, and fragrance. When the COVID-19 pandemic began, Coach released a comfort-focused collection to target their stay-at-home consumer crowd.

They also extended their return policies by an additional 30 days – both in-store and on the website – to encourage more people to feel comfortable with the thought of shopping online, which could be a new experience for some shoppers. Since covering one’s face became part of our new reality, Coach started selling reusable face masks to cater to their high end shoppers. 

Coach has also assured customers that their distribution centers remain open and have new safety measures in place to get packages safely to them. 

coach fashion coronavirus

Source: Coach 

Business Pivot: new distribution channel, product repositioning

4. Best Buy

bestbuy contactless curbside service

 

Best Buy is an American multinational consumer electronics retailer that sells video games, software, mobiles phones, and digital cameras, among others. It has stores in the U.S., Canada, China, and Mexico. 

Like other retailers, Best Buy implemented a contactless curbside service for both online and phone orders. They have pickup stations outside their stores that allow their employees to deliver items without coming into contact with customers. 

 

Another service that Best Buy has managed remotely is their technology repair. They have utilized virtual tools to aid Americans from a distance. With so many working from home or homeschooling, there is an increased need for technology support.

Best Buy’s Geek Squad remote support has been one way to resolve challenges that occur with technology – even from a distance. They advertise that the average wait time is only 3 minutes and each case is resolved in 45 minutes or less. 

Business Pivot: new distribution channel

5. Rag & Bone

rag & bone during covid

Rag & Bone is an American fashion label that sells clothing, shoes, and apparel for men and women. Along with more comfortable collections that fit with a “quarantine style”, they had to adjust their processes to meet new safety standards.  

They have notified customers shopping online that they adhere to all CDC guidelines and social distancing requirements. All incoming packages are quarantined for 24 hours and team members receive thermal checks and gloves when handling merchandise. Rag & Bone has also limited outside packages that they typically would have accepted, for instance, during the repair process. They’re also offering easy online returns – customers can print a prepaid UPS Ground Return label and drop off the package at the nearest UPS location. 

Rag & Bone has rolled out a number of virtual services like private appointments, live chat, 1:1 styling, and curbside pickup. For curbside pickup, all a customer needs to do is call a store, pay over the phone, and an employee will meet them on the curb.  

Business Pivot: new distribution channel, product repositioning

6. Walgreens

walgreens covid-19

 

Walgreens is the second-largest pharmacy chain in the United States and serves its customers by filling prescriptions, providing health and wellness products, selling grocery items, and offering photo services. During COVID-19, Walgreens increased its role as a provider of medicine and healthcare products as well as a grocery store. 

In addition to implementing safety measures in-store, Walgreens partnered with Postmates to deliver grocery items and personal care products. This partnership allowed brands to continue to serve customers more quickly and efficiently, especially vulnerable populations that couldn’t shop in-store. Walgreens offers drive-thru COVID-19 testing, holds “senior only” shopping hours, offers free delivery, and requires that everyone wears a face mask – all to keep their employees and customers safe. 

walgreens covid

Source: Walgreens 

Business Pivot: new distribution channel

7. Granadilla Swim

granadilla cape town

Granadilla Swim is a popular South African brand that sells women’s, men’s, and children’s swimwear. 

As soon as several European nations were forced into lockdown, the company’s founders, Joshua Meltz and Adam Duxbury, decided to introduce a new service: fresh produce, to ensure the company maintained a steady income.

They reached out to local farmers and small grocers who had no online presence, and offered them an option to sell their goods through the Granadilla Swim online store. Not only did this help the swimwear brand stay alive, but also helped small entrepreneurs maintain financial liquidity.

 

The new service turned out to be a massive success – so much, that the swimwear brand decided to launch a separate service, now available on the dedicated Granadilla Eats website. The shop now sells not only fresh produce, but also non-perishable goods, snacks, drinks, and baked goods.

Business Pivot: new product

8. Michaels


micheals during covid-19

Michaels is the largest craft and home decor store in North America, which operates more than 1250 stores across Canada and the United States.

With customers barred from entering stores, they joined a large number of retail stores offering curbside and contactless pickup. Customers are encouraged to make purchases online or through the Michaels app, call the store when they arrive, and then have a team member bring the purchase to their car. The entire transaction is done without customers and employees having any contact with one another. 

Michaels offers an almost instantaneous pickup at select stores, where customers qualify for same-day delivery if they place an order online before 6 PM. 

safe shopping michales

Source: Michaels

The craft store also decided to implement contactless home delivery – the drivers that serve Michaels leave the package at the front door, ring the bell, and return to their vehicle.

Business Pivot: new distribution channel

9. DSW

dsw covid

DSW is an American footwear retailer with over 500 brick-and-mortar stores and an e-commerce website. During the COVID-19 lockdown, DSW decided to make up for the lost in-house sales by encouraging customers to purchase online. In order to achieve this, they decided on a two-fold approach. Firstly, they offered its buyers free online shipping on all orders and extended its free returns to a full 90 days. 

Secondly, in order to cater to customers who wanted to receive their items quickly, they also implemented a curbside, contactless pickup and drop-off module. This solution allows customers to collect and return their items safely from in front of the stores, without coming into direct contact with any employees.

 

As of June 2020, select DSW stores were already open across the country, with staff strictly abiding by the CDC health guidelines, and only a limited number of customers were allowed into the store at once.

 

dsw covid solutions
Source: DSW

Business Pivot: new distribution channel

10. Dick’s Sporting Goods

dick's sporting goods

 

Dick’s Sporting Goods is an American sporting goods retail company, which  has 850 stores around the United States. With professional and recreational sports cancelled due to COVID-19, Dick’s Sporting Goods has seen a drop in the demand for their products along with store closures. 

They have continued to offer curbside contactless pickup for customers who shop online and wish to pick up items they have ordered in a safe and secure manner. They have also instituted policies for their employees that promote social distancing, sanitation, and employee wellness. Some stores also offer shopping by appointment or designated shopping hours for at-risk customers. 

Business pivot: new distribution channel

Retailers and COVID-19 – key takeaways

After the COVID-19 lockdown, retailers worldwide needed to take action quickly to alleviate the negative impact of the pandemic on business. During this time, most retailers from all categories – grocery, fashion, and others – introduced new distribution channels. Some companies, including Woolworths and Granadilla Swim, even went a step further and started offering an entirely new product category (in their case, essential groceries). 

The above-mentioned retailers had to quickly adjust their business models to effectively operate in the new reality, with all signs showing that they’ve made perfect strategic decisions. 

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