Retailers riding the pandemic’s wave of change

This is an excerpt of the original article. It was written for the November 2020 edition of Supply Chain Management Review. The full article is available to current subscribers.

November 2020

Supply chains have been in the spotlight like never before over the last eight months. That hasn’t always been a good thing. The perception, reinforced by shortages of products essential to our daily lives, is that supply chains were not up to the task and failed. The reality, as argued by MIT’s Yossi Sheffi in his new book, “The New (Ab)Normal: Reshaping Business and Supply Chain Strategy Beyond COVID-19,” is that supply chains performed as designed—they did what we expected them to do.

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COVID-19 has swelled the e-commerce tidal wave that was submerging traditional retailing before the virus struck. During the pandemic, stay-at-home consumers switched to online buying in droves, and the 2020 roll call of bricks-and-mortar bankruptcies reads like a “Who’s Who” of retailing.

However, there is another side to this dramatic story. The pandemic has also unleashed a wave of innovation that is giving more impetus to the changes that are reshaping the retail business and its supporting supply chains.

As I describe in my new book, “The New (Ab)Normal: Reshaping Business and Supply Chain Strategy Beyond COVID-19,” the crisis is compressing innovation adoption cycles as retailers scramble to stay afloat in an ever-changing landscape. These efforts offer vital clues to the shape of retailing in a post-pandemic world.

Navigating new paths

During May and June 2020, the MIT Center for Transportation & Logistics conducted a survey of grocery shopping habits in the United States. The survey, part of a “Covid-19 Generational and Lifestyle Study,” elicited 1,320 responses. The survey focused on buying behavior, distinguishing between store shopping and various online modes such as home delivery, curbside pickup and locker pickup. Home delivery’s share of shopping increased from 13% to 31% of all buying trips. Of those individuals who shifted from in-store shopping to home delivery—the largest group to shift modes—31% stated they were likely to continue with home delivery.

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