Data fails in grocery retail
By Stephanie Pierotti
I work in grocery retail management in a mid-sized city, and have been open and working throughout the pandemic. Seeing how radically things have changed in such a short time, I’ve had to come to terms with how uncertain the future is. I work in a data-driven business and I've come to rely upon access to both current and historical data to make the best possible decisions on a daily basis. The first thing I do every day is look at the latest information available to me and begin to make judgments based on how that data affects forecasts for the rest of the week and fiscal period. For the most part my business is very predictable, and while no outcomes are certain, our forecasts are generally reliable. However, there are events so rare and unpredictable that models and forecasts are incapable of forecasting. These events are called Black Swans, after the long-held and erroneous old world belief that all swans are white. The coronavirus is one of these events, and it has shattered our ability to confidently predict almost everything.
In the days before states and municipalities began shutting down in mid-March, our forecasting completely broke down. Overnight we went from having reliable estimates for customers and sales to completely irregular shopping patterns. For about two weeks sales increased dramatically with substantial swings back and forth before business slowed down and settled into what, at least for now, is the new normal. I've dealt with a fair number of emergency situations at my store. On the East Coast it’s usually hurricanes and snowstorms, and in both cases there is a pattern and a procedure to ensure you can satisfy your guests, take care of your team members and protect the store. Regardless of how devastating one of these events may be, there's a way to recover once you're on the other side. In most cases it's not that bad, and within days it can feel like nothing ever happened. At the beginning of the pandemic we used these past experiences to guide our decisions, but it quickly became apparent that this wasn't a singular event that we would then recover from. After weeks of adapting to new policies and a cycle of ever-changing procedures, we are now preparing for the country to re-open which will result in a series of unforeseen and unpredictable new challenges and risks.
When I'm dealing with a weather related emergency, I analyze the data carefully and use it to navigate unusual circumstances and minimize disruptions. I know which sources are most reliable, and I pull in as much information as I can to make the best and most timely decisions I can. This has become completely impossible during the pandemic. Even the most reliable sources of information have sometimes been contradictory, and different levels of government are never consistent in messaging or direction. As frustrating as this is, I can also sympathize because I understand how little information they actually have. We have an immense amount of weather data from the past, in addition to an incredible number of tools to measure and observe the present, all of which can be used to predict the future. The amount of data we have on past pandemics is limited, and as we can see from the news it's challenging to get reliable information even in the present. The ability to model and predict the future of the pandemic is dubious at best. The virus itself is new and has only been studied for a few months, so it will take time before we can do anything more than contain it.
The past eight weeks of the shutdown has impacted everyone, and everything, but the long-term economic impact is the driving force behind reopening states. Uncertainty impairs our ability to make any rational predictions about the economic outlook. Even with states opening back up, it’s doubtful people will be returning to regular patterns of consumer behavior. Almost one in six Americans are out of work, and it’s reasonable to assume that everyone will be more conservative with their spending moving forward. The longer people are out of work the more unemployment strains the economy. It will take a long time to recover from this, and that’s assuming that we can even open up without inducing a spike in coronavirus cases. There is no way to know, and our leaders certainly can’t be confident of the magnitude of the risks we’re undertaking, or whether the outcomes will even be beneficial. The rest of the world is struggling through the same set of questions. Some countries have better or worse success in battling the pandemic, but no paradigm has emerged as a template to be replicated across the world.
Social distancing has slowed the spread of the virus but is unsustainable for the long term. The process of opening the country back up will put a huge strain on the relative equilibrium established during lockdown, and opens us up to unforeseen consequences. In the next eighteen months literally anything could happen. As terrifying as that may be, the bottom hasn’t fallen out yet, and we’re grinding through this. My store has remained open throughout the pandemic and we have changed our operations as new information has emerged and strive to be as safe as possible. We've been fortunate because none of our team members have been diagnosed. This is anecdotal, and there have been other circumstances completely the opposite, but it does at least give me some optimism that we may be able to cautiously move toward a new normal.