Research: the impact of the pandemic on the Swiss retail trade

15 September 2020. Prof. Thomas Rudolph, Director of the HSG’s Institute of Retail Management, presents the most important results of the study in the webcast “The corona crisis: an opportunity”. His guests on the panel – Fabrice Zumbrunnen (CEO, Migros), Christoph Werner (CEO, dm), Roman Hartmann (CEO and Founder, Farmy), Nina Müller (CEO, Jelmoli) and Beat Grüring (CEO, Tally Weijl) – additionally talk about their experiences during the lockdown. They describe central changes in corporate management and important lessons from the crisis. You can view the webcast here at any time.

A study about the consequences of the pandemic on the retail trade

The study reveals that the management of Swiss retail companies can see many new possibilities arising from the corona crisis: the most frequently mentioned opportunity emerging from the crisis consists in pressing ahead with digitalisation (mentioned by 34% of interviewees), followed by the expansion of online business (mentioned by 28%) and increased flexibility in the job by working from home (mentioned by 23%).

Furthermore, almost half of the interviewees indicate that customer loyalty has increased (48%). The effects of the lockdown vary strongly between industries and distribution channels: whereas the turnover of the online channels in all industries has increased by an average of 67% since the beginning of the lockdown, turnover in offline channels has decreased by 6%. Only the interviewees from the food industry indicate that their turnover rose by an average 8%.

One in five interviewees indicates that their company had to make employees redundant in the last six months; more than half of the interviewed firms had to register for short-time working. However, a glimpse into the future shows a more positive picture: in the coming six months, only 12% expect further redundancies and only 22% expect to have a short-time working regime. In addition, only one in five interviewees envisages a possible second lockdown (19%). The most important lesson from the crisis was that employees work more efficiently and effectively when working from home (mentioned by 32% of the interviewees). Also, 31% identified digitalisation as the crucial success factor. 27% of the interviewees have learnt that agility and flexibility can ensure survival in the crisis.

The survey was conducted by Prof. Dr. Thomas Rudolph, Director of the Institute of Retail Management (IRM-HSG), Kathrin Neumüller, research assistant and PhD candidate, and Nora Kralle, research assistant and PhD candidate, at the University of St.Gallen. Detailed statistics of the study can be obtained free of charge through the online portal:  www.handelsliteratur-hsg.ch/studien/details/. For the study “Corona – effects and lessons for the retail trade”, 132 employees in management positions in Swiss retail companies were interviewed. The study refers to the Swiss retail trade: among all the interviewees, 21% come from the food industry, 11% from the textile and clothing industry and 8% from the furnishing industry.

Retail Summit and webcast: five CEOs speak about the lessons drawn from the crisis

In the webcast, five CEOs of retail companies discuss the importance of flexibility and agility in a crisis:  for Christoph Werner (dm drogerie-markt), the greatest challenge of the corona crisis was the fact that “the efficiency of the existing logistical processes was called into question.” According to Beat Grüring (Tally Weijl), the “silos in the company collapsed”, and decisions are now made at the basis. He regards this as an opportunity to further enable employees, thus boosting the agility in the company.

To cope with the sudden surge in demand, Farmy had to take quick action: according to Roman Hartmann (Farmy), the company managed “to quintuple the volume that we are able to package within only a few weeks”. According to Fabrice Zumbrunnen (Migros), however, this was not solely a question of optimising internal processes – at Migros, “we felt the physical limits of digital trade (in the form of bottlenecks in the postal services)”. Even if all the participants agree that the online trade has strongly increased in relevance through the corona crisis, Nina Müller (Jelmoli) thinks that one of the trailblazing future topics at Jelmoli is “how the surface can be designed in such a way that stationary shopping will remain an experience”. The most important findings of the corona study: (free download).

Image: Photocase / Michael Zech Fotografie