COVID-19

Grocers are scrambling to face another pandemic panic

Kristin Schwab Sep 28, 2020
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People keep social distance as they line up in front of a supermarket in New York City. Johannes Eisele/AFP via Getty Images
COVID-19

Grocers are scrambling to face another pandemic panic

Kristin Schwab Sep 28, 2020
Heard on:
People keep social distance as they line up in front of a supermarket in New York City. Johannes Eisele/AFP via Getty Images
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Remember the early days of the pandemic? Back when panic buying meant it was nearly impossible to find things like toilet paper, rice and flour? Well, public health officials are warning that we could see a second wave of the virus before the end of the year. And this time retailers want to be prepared if there’s high demand for certain products.

But that’s thrown all the computer models they usually use out of whack. Machine learning helps run stores like Walmart and Kroger, and that’s not as useful during a pandemic.

When you pick up orange juice or granola bars at the grocery store, you are being watched. Video cameras and even retinal scanners are looking at where your eyes go, how long you linger and what you touch. 

“If it can be measured through technology and money can be made, and of course it’s legal and ethical, it will happen,” said Eric Bradlow, who teaches retail analytics at Wharton. He said algorithms use all that data to decide how much to order and what the sticker price should be. And that works in normal times.

“Now the question is: How predictive is that model going to be?” Bradlow said.

Not so predictive. Because a data model is only as good as its data, and computers don’t know how to factor in people’s unusual buying patterns during the pandemic. Rudi Leuschner, a professor of supply chain management at Rutgers, said retailers are going old-school.

“We use the supercomputer that everybody has built in right as they’re born, which is human intuition,” Leuschner said.

People’s shopping habits have ebbed and flowed depending on the state of COVID-19 cases or lockdowns. Computers can’t make sense of this stuff, so retailers have to trust their own guts.

“It is definitely going to come down to a lot of calculated best guesses,” said Julie Niederhoff, who teaches supply chain management at Syracuse University.

She said humans tend to overcorrect. Retailers may actually stock up too much, wasting money and warehouse space. Plus, who knows what people will panic buy the second time around.

COVID-19 Economy FAQs

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

Could waiving patents increase the global supply of COVID-19 vaccines?

India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy continues reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

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