How retailers can navigate the challenging times that lie ahead
At last, there’s light at the end of the tunnel. Retail stores and hospitality reopened last Monday – but they may still have some challenging times ahead
Firstly, the pent-up demand of the past year and the escalation of cash deposits according to the Central Bank, means there is money in the system. Human nature being what it is, customers will want to get back out there and away from their desktop PCs.
I can’t read the tea-leaves any better than you can, but all the signs are positive that we may be in for a spending boom in the coming weeks.
We know instinctively of course that ‘normal’ will be stranger than fiction. Digitization and online shopping has advanced probably ten years in the last year. However, because I’m a firm believer in shopping being a ‘full contact sport’, I believe that online sales will drop. But they will not drop to pre-pandemic levels, there will be a significant net increase.
So, retail will never be the same again. It will get even more exciting and will challenge those that are up for it, to grow and develop in a different way.
I spent time last week with two retail experts. I know Dan Ryan for more than 20 years from his time with the Selfridges Group. His career as an expert in merchandise management and as an all-round retailer is exemplary. Always very commercial, I love his advice which is always so practical.
Miriam Simon of PTO.ie is a retail consumer and trading advisor. She too has a strong retail pedigree and now advises Irish retailers of all types and size. She too is known for being a rock of good sense.
They both shared their tips for retailers on how to best maximize the opportunities and challenges coming down the tracks.
Maximize your margin
“Consumers will not be looking only for discount merchandise, they’ll want to treat themselves” said Miriam. “So don’t lead your re-opening with discounts and sale messaging.”
I appreciate that you may have stock going back to last year, but last year never happened for consumers either! It wasn’t just you. Sale merchandise also tends to make the store look messy. So if you ‘re determined to have some promotional items, keep them to a minimum.
Study your supply chain
Remember that supply-chain costs from Asia have escalated dramatically, and many of your supply factories are not yet back to full production. So don’t get caught with no stock to sell. “Smaller retailers will need to depend on wholesalersto replenish stocks, so speak to them now” said Dan.
Buy what consumers want
“Watch your mix of sales compared to previous seasons, as working from home and fewer events to attend, will mean less need for occasional wear. Your buying budgets should be adjusted to reflect trends. Trends during lockdown moved from formal and occasion wear, more to leisure and casual wear” said Dan.
Extend opening hours
Take advantage of the pent up demand and also spread demand throughout the day which may be impacted by social distancing. For good customers, consider making appointments for them after hours.
Look to customer experience
“Social distancing will continue as will some levels of anxiety for some customers. Be empathic and patient. Anticipate the needs of all customer types and be sure your teams follow through” said Miriam.
Many retailers switched successfully to online only during lockdown. That was a real win for Enterprise Ireland, in how they supported that drive. The growth in the use of technology will continue so your ability to provide an omni-channel experience will be tested. Keep online going.
Miriam also shared examples of fashion retailers using social media to present new products in video format. Sales typically jumped significantly within hours of doing so. And TikTok is especially worth considering.
Windows are back
Miriam advises that as social distancing will cause queues outside your door, be more mindful of your windows.
Plan for Christmas
It’s 216 sleeps to Christmas. “There will be shortages of some basic items like cardboard, paper and packaging. Order what you need now,” says Miriam. She also suggests that gifting should be prioritised. After an absence of real treats last year, consumers will want to make up for that this Christmas.
The last word
Retailers, hotels, restaurants, pubs, entertainers and those in the travel industry have been hit financially more than most in the past year. While the tips outlined here are specific to the retail sector, I think every sector can take some ideas from them too.
In a nutshell, we all need to stand back from the sound of silence in our businesses for the past year. Assume that there will be some spending and make sure you plan to get your fair share of it.
Alan O’Neill, author of ‘Culture Matters’ is a change consultant and keynote speaker, specialising in strategy, culture and structure. Go to www.kara.ie to get support in growing your business