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Help Desk

This week we hear from Bart Sep, Country Manager for Advantage Netherlands, to understand how COVID-19 is impacting life and retail in the country.

Q1 - It seems that retail in the Netherlands was less negatively impacted than in some other European markets by COVID-19. What do you believe were some of the key factors behind this relatively strong performance?

In the beginning, there was a high degree of uncertainty amongst retailers and suppliers in the Dutch market. While feelings of panic and doubt were mutual, retailers and suppliers entered this period with a determination to ‘beat the virus’ and adopted a teamwork mindset.

Because the outbreak in the Netherlands was a few weeks behind China and Southern Europe, we were able to understand how retailers and suppliers in other markets responded to changes in business, and how they prioritized their operations. Dutch retailers and suppliers effectively incorporated these learnings into their activities to avoid any preventable circumstances, such as stock shortages or misalignments in forecasting. Several suppliers provided retailers with their insights weekly and started making commercial and supply chain plans and forecasts together. This high level of cooperation has been viewed very positively by the Dutch grocery industry.

Through border closures, we have seen how critical Dutch suppliers and their products are to our basic needs. Companies that depend on finished and semi-finished products or packaging materials from other countries will eventually be able to delve into their entire production process. However, it is easy to see how agile organizations have become in response to producing essentials that are not a part of their core product portfolio, such as disinfectants and sanitizers. Personnel who would have worked previously in specific channels or portfolios would make themselves available or be tapped to help with these efforts. More than anything, this is a time where inventiveness, flexibility and entrepreneurial spirit have been critical in supporting organizational adaptation to the changing environment. The starting point and key to successfully navigating through the crisis has been for both retailers and suppliers to always put the consumer first.

Q2 - What were some of the most significant changes that you saw in terms of collaborative behaviours and actions? Do you expect these changes to stay once the crisis period has passed?

Among suppliers and retailers, difficult choices were required between existing products (A-level brands, private label and other brands) vs. new ones, fast vs. slow movers, and promotions vs. standard pricing. Sometimes these choices were well-accepted in the market, but if not executed well, they would be misinterpreted or viewed negatively. Communication and transparency were the two competencies that separated the organizations who executed these decisions well and with thorough understanding, versus those that were more internally focused.

The suppliers and retailers that ultimately made an impact in the market were those who, in addition to getting the fundamentals of collaboration right, showed empathy. Examples of this include having more personal conversations with key contacts, sending letters of thanks to employees and even giving small gifts to show appreciation and gratitude. These acts of empathy exemplified how Dutch businesses stayed engaged even during difficult and uncertain times. This level of engagement made all the difference between those who were able to maintain and also build customer share, versus those who saw it erode.

It is now vital to ensure that suppliers and retailers do not fall back into “old” habits. As the market and greater Europe begin to reopen, going back to “the way things were” seems the logical route to take, as this is the only certainty to fall back on right now. However, we have entered a new world, a new normal, where customer and consumer flows will always be different. This requires adjustments from all of us in how we collaborate. Whether it be budgeting, forecasting, stocking or portfolio policy, flexibility will become the new standard.

Overall, collegiality, communication, transparency, mutual understanding and flexibility will be the standard behaviours of the new normal that provide the base measure of how collaboration between suppliers and retailers can be maximized beyond a crisis. While relationship dynamics in the industry will be held to a much higher standard moving forward, this will be a positive outcome for everyone that we will anchor on and expand in the future.