MIT Sloan Management Review Article on Why Some Retailers Are Thriving Amid Disruption

Retailers that successfully adapt to the pandemic’s social-distancing requirements offer a model for making a quick digital pivot.

A crisis reveals as much as it devastates. Retailers that were struggling before the coronavirus outbreak are now crumbling. Not well positioned to pivot going into the crisis, J.C. Penney, with more than 800 stores and nearly 85,000 employees, recently filed for bankruptcy, joining Neiman Marcus and J. Crew in the running list of retail casualties in the last two months. Other retailers have been forced to pivot quickly, and some have done so successfully, like Target, which reported a 141% first-quarter increase in digital comparable sales, albeit at a significant cost. Walmart also appears to be well positioned and saw a comparable sales increase of 10%, including a 74% jump in online sales.

However, in March, overall U.S. retail sales, including online transactions, suffered an 8.7% drop. That was the largest monthly decline on record since 1992, when the data was first made available by the Census Bureau — until April, when almost 630,000 outlets were forced to close, plunging sales by another 16.4%.

About the Author

Mark J. Greeven is a professor of innovation and strategy at IMD Business School in Switzerland and the author of Pioneers, Hidden Champions, Changemakers, and Underdogs (MIT Press, 2019). Howard Yu is the author of Leap: How to Thrive in a World Where Everything Can Be Copied (PublicAffairs, 2018), Lego Professor of Management and Innovation at the IMD Business School in Switzerland, and director of IMD’s Advanced Management Program. Jialu Shan is a research fellow at the Global Center for Digital Business Transformation, a joint initiative of the International Institute for Management Development (IMD) and Cisco.

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