RSi COVID-19 Insights from Around the Globe – China
Frank Dai, Retail Solutions, China Retail Update – March 20
Greetings from the Retail Solutions China team!
It’s now March 23, three months after the first reported cases of COVID-19 in China.
We know many of you (our friends, colleagues and customers around the world) are in the early stages of your COVID-19 journey, so we thought we should provide some insight into where we are now and where we’ve been.
The View @ Month-3 in China
- Every day, more employees are going back to work in major cities throughout China.
- Shopping malls have begun to re-open this week and people are beginning to venture back out into public.
- Our long-distance bus network has recovered, and more workers who rely on that network can get to their jobs.
- Our retailer and manufacturer partners continue to struggle with out-of-stocks and how to respond to the persistent uptick of both online and in-store sales.
- Ideally, life will be back to “normal” in late April — a 3 to 4-month total impact on most people.
- That said, we know our customers will be working to recover and repair their stores and supply chains from the effects of COVID-19 through the end of 2020 — a 12 to 13-month total impact on most businesses.
The Retail Perspective @ Month-3 in China
- Total retail sales of Fast Moving Consumer Goods (FMCG) grocery continues to trend at +50% vs. a year ago.
- Online retail sales are trending at +270% vs. a year ago.
- We expect these numbers to regress (somewhat) back to the mean as more people resume their daily routines. However, we suspect that the systemic shift toward online purchasing during this period will impact future shopping patterns and are watching this closely.
- Average on hand inventory levels are down 47% compared with historical averages.
- Average out-of-stock rates are approximately 20% across retailer/item combinations throughout the country, which is astonishing considering historical OOS rates were less than 1%.
- There is a great collaboration happening between manufacturers, retailers and companies like RSi, especially around solving the OOS problems and properly allocating inventory by retailer, item and even by store, every day.
Looking Back @ Months 1 and 2 – My Takeaways
- Data is the foundation that will get you through the next couple of months.
- Don’t panic – the departure from the status quo is a shock, but everyone hits a rhythm to solve the issue at hand.
- Move quickly, but know that the landscape will continue to change so be prepared to adjust as needed.
- Teamwork and collaboration are paramount to getting mobilized and remaining agile. Find ways to celebrate successes – even the smallest ones.
- Hand sanitizer and bleach are fundamental – KEEP WASHING YOUR HANDS!
Big picture – our personal, family and social lives are slowly returning to “normal.” However, we know there is still plenty of work to be done over the next 9 -12 months to recover and repair our stores, supply chains and logistical operations. Regardless, our spirits remain high as we know we’re in this together.
We also have a renewed sense of gratitude for the people that fill our lives and wish all of our friends around the world health, safety and prosperity.
Frank Dai and the Retail Solutions China Team