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How Retail CEOs Are Navigating the COVID-19 Crisis

Retail Leaders on How They’re Successfully Dealing with the Pandemic, and What Lessons They’ve Learned So Far

  • By Sarah Murphy

Retailers have been affected enormously by COVID-19. While some have been deemed essential and remained open, serving customers on the frontline and keeping them stocked with food and supplies, others have grappled with the aftermath of being shuttered for months early on in the pandemic. Even some of retail’s biggest names have struggled mightily during the pandemic.

But it’s not all doom and gloom.

As the world continues to figure out how to navigate this new reality, we’re looking at how some of North America’s biggest retailers have adapted—what their initial response was, what they’re doing differently, and what they’ve learned—during the pandemic.

 

How Retail’s Biggest Leaders Are Successfully Navigating the COVID-19 Crisis

 

Marvin Ellison, President and CEO of Lowe’s

Lowe’s President and CEO Marvin Ellison told the National Retail Federation (NRF) in July, “we had contingency plans for a lot of things, but a global pandemic was not one of them.” As such, COVID-19 was an unexpected challenge for his home improvement company. 

To stay successful during the pandemic, he focused his energy on three main priorities:

  1. Taking care of associates and customers by creating safe stores
  2. Keeping associates financially secure
  3. Being a good corporate citizen by supporting healthcare workers

Ellison accomplished these goals by adjusting in-store protocols (after analyzing customer traffic patterns to determine where customers congregate and staffing those areas with extra associates to inform customers about safety measures), adding more than $500 million in bonuses and giving employees free telehealth benefits, and starting a grant for minority-owned small businesses who were disproportionately affected by COVID-19. 

Additionally, he increased communication with staff by hosting weekly video broadcasts and monthly virtual town halls that allowed employees to ask questions and get updates directly from the person in charge.

Despite the high-stress environment, Ellison’s strategy (paired with consistent associate appreciation) has paid off and allowed Lowe’s to actually increase their customer satisfaction levels during the pandemic.

 

Hal Lawton, President and CEO of Tractor Supply

Tractor Supply has remained open during the COVID-19 crisis, and CEO Hal Lawton told NRF that they were quick to put together a pandemic response team that launched on March 1. 

That team focused on how to best support employees, and associates were given paid sick leave with no questions asked, incremental “appreciation bonuses,” as well as access to in-store safety equipment like gloves, masks, and hand sanitizer.

In all Tractor Supply stores across the United States, just 50 employees contracted COVID-19. Those associates who fell ill were given care packages from the company that included PPE, therapeutic products (like cough lozenges), and gift cards for at-home entertainment (like Netflix).

Beyond the immediate adjustments made to deal with COVID-19, Lawton has initiated permanent changes to team member compensation, including a minimum $1/hour wage increase for all frontline workers and benefits for part-time employees. He also said that the company’s response has led to higher store performance, which has improved staff morale.

 

Neela Montgomery, Former CEO of Crate & Barrel

Neela Montgomery, the former CEO of Crate & Barrel, who recently stepped down from the company to pursue new opportunities, was interviewed by the NRF in May. She explained that the company’s existing forward-thinking vision was the biggest asset when adapting to COVID-19, even after having to close stores temporarily. A constant desire for improvement allowed Crate & Barrel to develop more new processes and procedures in two months than they typically would in two years.

Montgomery also pointed out that Crate & Barrel’s stores—primarily large, open spaces—made accommodating social distancing a lot easier.

Additionally, making changes was easier because innovation was already part of Crate & Barrel’s DNA. The company had already been experimenting with how stores function with their Pasadena location, which had been operating as a design studio rather than a typical retail location.

Despite the accelerated speed at which decisions have been made because of COVID-19, Montgomery believes companies will return to a slower pace in the future. “I don’t think we can all maintain the current pace of decision-making and change,” she said. “But I hope the agility will stay with us, and the questioning of our current assumptions.”

 

Doug McMillon, CEO of Walmart

Walmart’s CEO Doug McMillon is at the helm of a ship that has weathered the storm particularly well; earnings, revenue, and in-store sales have all been up since COVID-19 hit.

During a recent appearance on CNBC, the first thing the retail leader did was praise the associates who have been doing an “amazing” job serving customers throughout the pandemic.

McMillon and his team have been monitoring trends since March, noting that Walmart’s boost in sales started with cleaning supplies and hand sanitizer during the pandemic’s initial phase, followed by bulk food buying. From there, customers turned their attention to more discretionary purchases like material for at-home projects and entertainment for themselves and children, especially once federal stimulus money began to be received by the public.

Success across so many different departments has meant that Walmart has actually been hiring additional associates to help put together orders for in-store and curbside pick-up. Another unexpected job that staff members have been tasked with is “policing” customers to make sure they’re following public health guidelines (e.g., wearing a mask, using hand sanitizer) while in-store, and McMillon maintains that he has seen “a lot more good behavior than concerning behavior” in his stores.

McMillon considers his stores an example of how to remain open and stimulate the economy while keeping customers and associates safe during the pandemic.

 

Brian Cornell, Board Chairman and CEO of Target

Target’s CEO Brian Cornell also admits that the company didn’t have a “gameplan” for a global pandemic. He has since turned his focus towards making sure associates are taken care of.

“If we’re gonna serve America during the pandemic, we better make sure we start by investing in our team,” he said in an NRF interview this past June.

As such, safety precautions were taken, like installing plexiglass shields, metering the number of guests in a store, placing directional arrows on floors, enhanced cleaning, and providing gloves and masks for employees. Associates were also given additional benefits, including increased safety pay and four weeks of paid leave for vulnerable team members (i.e., pregnant women or employees over the age of 65). As of July, Target has joined a growing number of progressive retailers by implementing a wage increase of $15/hour for their workers.

Cornell also believes that Target’s previous investment in physical stores has helped tremendously in the wake of COVID-19. Bucking the trend of many retailers closing their doors or downsizing in recent years, Target has been heavily investing in brick-and-mortar renovations and expanding into urban areas. That means that even their e-commerce and digital distribution model is store-centric: the store is the distribution center, and orders are picked and packed in-store before getting picked-up, handed over via drive-thru, or delivered by a Shipt shopper.

 

Sonia Syngal, CEO Gap Inc.

According to CEO Sonia Syngal, one of the most successful changes made by Gap and its brands was the decision to use Old Navy stores as fulfillment hubs for ship-from-store and curbside pick-up orders. Doing so has alleviated pressure on warehouses and ensured quick service to customers.

“We continue to use this crisis as an opportunity at every turn,” she said in a statement detailing the company’s reopening plans. “As we leverage our stores as distribution hubs, lean into the meaningful acceleration of our online business and play forward the learnings from our Asia business where all locations are now open, we believe we’ll be well-positioned as this crisis subsides.”

As stores continue to reopen and adapt to the realities of COVID-19, Syngal is counting on the retailer’s stores in outlet centers and off-mall locations (approximately 70% of their footprint) to draw customers in part because they provide the opportunity for easier social distancing and safety protocols compared to other locations.

 

Chris Baldwin, Executive Chairman of BJ’s Wholesale Club

Chris Baldwin, the executive chairman of BJ’s Wholesale Club, is fighting back against COVID-19 with empathy and kindness.

The executive chairman knows that customers and employees live with heightened anxiety, and believes that being kind can help alleviate increased stress, whether that’s by taking extra time to engage with customers safely or exhibiting patience when teaching staff new protocols.

In June, he told NRF that the company’s main challenges in the pandemic were changing the “hero culture” amongst staff and making customers feel safe. 

“In a hurricane, we stay open longer. We don’t close until we absolutely have to,” he said. But now, he’s promoting a culture where being safe and staying home if you feel unwell is a top priority. 

In line with the company’s shift in mindset, BJ’s Wholesale Club has implemented PPE for staff, plexiglass installations, increased sanitization, social distancing, limited capacity in-store, and temperature checks.

“The most important thing is making sure [store associates] believe we’re there for them and that we’re running this business to support them and not the other way around,” he said.

 

Heather Reisman, CEO of Indigo Books and Music Inc.

At first, Indigo—the Canadian bookstore chain, or “cultural department store”—was affected by COVID-19, having closed their doors for several weeks and months earlier this year. Even online sales were difficult to conduct because warehouses had to comply with social distancing measures, and thus couldn’t operate at full capacity. Nevertheless, CEO Heather Reisman is focused on delivering the best customer experience possible as stores begin to reopen.

“As we create environments for our customers that are safe, we limit the number of people we can have in the store. It will be a lovely experience for the customers who come, I am absolutely certain,” she told The Globe and Mail in May.

Reisman claims that since reopening stores, customers have changed the way they shop. Rather than browsing aimlessly, shoppers are arriving with purchases already in mind. So far, that’s been a positive for Indigo, as both conversions and transaction sizes are on the rise. 

“So, that’s saying that you’ve got a deliberate customer, and we think that that’s going to remain, frankly, until there’s a vaccine,” she told City News.

 

Keep up with our ongoing COVID-19 coverage. Learn tips on how to communicate with staff, properly sanitize stores, and improve your internal communication strategy during the pandemic by visiting our Resources page.

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