How have Costco vendors navigated lockdown?
With COVID-19 lockdown in place since the end of March, Costco vendors have not only been unable to run their usual in-store demos but have had the vast majority of their marketing and business activities disrupted. It’s been a tough time for all of us, of course, but food businesses have arguably been hit worse than most. Now, with lockdown being gradually lifted, there is a burden of expectation being placed on the industry as it starts to fire on all cylinders again.
But how were these businesses able to cope during lockdown and what are their plans for the future? To shine a light on the question, we spoke with Shonali Patel, customer marketing controller for Lindt. As one of the world’s most established names in confectionery and one of Costco’s most popular vendors, we thought she would be ideally placed to offer some perspective on the situation and hopefully inspire some hope and confidence in the industry going forward, post-lockdown.
How has the lockdown changed the way Lindt operates?
The way Shonali explains it, Lindt is a business with a lot of moving parts, with a range of employees in different roles all working out of their head office in Feltham. The most obvious change, she admits, has been moving from traditional office life to a work-from-home model.
She explains: “Our day-to-day job hasn’t changed too much. The sales team has been impacted quite heavily because our retail partners are having to reprioritise: when lockdown was first announced, chocolate was probably not very high up on their priority list of ‘essentials’.”
“The timing of the lockdown was significant.”
With her own team, however, the change was less immediately obvious as they operate in the experiential field – bringing the brand to life. The timing of the lockdown was significant, however, falling as it did just before Easter and Mother’s Day, which is traditionally the busiest time in the chocolatier’s calendar. This required a swift operational pivot from Shonali and her team.
She says: “It was a question of working with each of our retail partners to understand what was feasible and also what message we wanted to send as a brand. We understood that Easter and Mother’s Day were probably the last things on people’s minds back then, so a lot of the activity we had planned had to be cancelled.”
Did any major plans need to be changed and how were the teams impacted?
The major challenge was always going to be realigning plans to suit the ‘new normal’ and set up remote working operations. However, Shonali insists that there was minimal disruption and that they were able to set up an effective remote working model remarkably quickly. Because Lindt committed early on to ensuring that everyone had the right equipment to be able to work from home effectively.
She elaborates: “We were all given monitors and we were even able to take our office chairs home, which has made a massive difference, I think the most important thing is that, whilst there were a few weeks of disruption and uncertainty, people soon got into the swing of it.”
She does concede, however, that whilst her own team was not that heavily impacted, the brand’s merchandisers and regional store teams certainly were. At all times, however, health and safety have been at the forefront of the discussion and, as a result, everyone at the company has felt confident and comfortable with their business leaders.
Has the lockdown changed the way Lindt promotes its products?
#The first thing Shonali and her team noticed following lockdown was an immediate shift in how their portfolio of products was performing in the market. They noticed that, in part due to a lack of enthusiasm surrounding Easter, the big box and seasonal elements of their portfolio were underperforming, but the consumption of their chocolate bars had skyrocketed.
So, they shifted their focus onto the chocolate bar side of their business to ensure it had a strong presence in stores across the country and that there was enough supply to satisfy consumer demand.
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As far as retail partners such as Costco were concerned, however, they understood that their hands were pretty much tied by the situation and that the key to ensuring the boat remained afloat in such stormy times was communication.
She says: “We took the lead from our retail partners in understanding what was and wasn’t feasible, and worked with them to ensure we could respond and were ready to hit the ground running when things get back to normal.”
What measures are they putting into place when they ‘go back to normal’?
In the last few weeks, both business development and merchandising teams have been back to work in a big way and all the necessary precautions have been put in place to ensure staff and customer safety.
Shonali explains: “We’ve taken all the precautions with PPE but we’ve also given our staff 100% flexibility as to when they complete their calls. This is for a couple of reasons. Mainly it’s to allow them to make the decision about when they believe it’s safest to go into a store, with some of them making their calls early in the morning and some making them later in the evening. Also, with the fact that schools are still shut and a lot of our team members are parents, it allows them to balance that with their childcare requirements.”
“Going forward, more brands should really be following their example.”
Lindt has been open and encouraging across the board, with even those working from home being given the flexibility to manage their work and home life priorities as they see fit. Going forward, more brands should really be following their example by providing reassuring motivation and a message that is consistent and clear.
In the short-term, meanwhile, their retail stores have been prepared to fall in line with government guidelines, with protective screens, floor signage and even equipment that sanitises the air. Shonali says: “I think the main thing we’re going to be doing is constantly reviewing the situation and making sure what we’re doing is keeping both our employees but also our shoppers as safe as possible.”
What’s the long-term plan of action?
Initially, the biggest hurdle was in not knowing exactly when things would get ‘back to normal’. This put an automatic grey area over things like Christmas marketing activations. However, with shops now open again, Shonali is starting to feel like we’ll be able to start getting back to what we all would consider normal for Christmas.
Going forward, she speaks of an optimism that 2021 will be a more normal year but none of us can ever be certain. Lindt is working closely with research agency Kantar Worldpanel to gain insight into potential changes within shopper behaviour and how the brand should be planning ahead for the future.
Shonali says: “We’re taking that information (from Kantar) and being really open and transparent, sharing that with our retail partners and letting them know that these are the trends we’re seeing and that we need to work around.”
What does this mean for your category and how shoppers are going to be behaving in your store? It’s the collaborative partnership between Lindt and their retail partners that has really helped them in the short term and will continue to help them in the long term. A lot of it is about transparency and sharing information. Because we’re all stronger together.
Does online pose a challenge?
There has been a considered move towards online commerce in the last few months and that could have a permanent effect on the retail industry in general. With the risk of infection still lingering, there’s also the simple fact that many consumers simply won’t want to risk a physical shopping experience when they have grown accustomed to shopping online.
According to Shonali, Lindt has concluded that online is here to stay and will form a larger part of their strategy going forward. However, some experiences can’t be replicated online, such as the taster demos offered at Costco, which Lindt plan to continue to utilise going forward.
It’s obviously been a really difficult time for a lot of people for a lot of different reasons, but if Shonali has learned anything it’s that helping employees navigate through tough times is as simple as good, open and regular communication.
She adds: “If you were to ask how we have changed as a business as a result of coronavirus, one of the major things is that actually, we have become better at communicating. Because, when you’re not all in the same place at the same time, you have to work that extra bit harder to make sure that people are getting the right messages.”
So, it sounds like encouraging dispersed workforces to be transparent and to communicate regularly with their staff could be the key here. Or at least a large part of it. For Shonali and the Lindt team, that will be the positive legacy of 2020 and it’s a legacy more brands could really learn a lot from.
For more information on COVID-19, product sampling and plenty more besides, head back to the WDS blog.