The new normal: Getting retail moving again in a COVID-19 world
Posted on June 11, 2020
Gary Rohloff, co-founder and MD ‘buy now, pay later’ platform Laybuy, shares advice for businesses hoping to reopen in the coming weeks
It is no secret to anyone that the COVID-19 pandemic has had a huge, and in many cases devastating, impact on businesses across a range of sectors in 2020. Retail is arguably one of the hardest hit sectors, with physical retail stores forced to shut up shop since from March 23rd onwards (when the UK officially entered a state of lockdown), and even online sales in many categories suffering due to consumer concerns about financial and employment uncertainty.
On top of this, we have seen unprecedented levels of disruption to both supply and demand. In categories that have seen an increase in sales during the crisis, retailers have struggled to meet the demand for certain items (handwash, toilet roll and flour being amongst the items in scarce supply), or have struggled to fulfil orders quickly due to newly imposed social-distancing requirements across the distribution network. In the clothing category on the other hand, despite an abundance of stock, the recent lack of socialising has directly led to a lack of demand for new outfits.
Yet, we are starting to see some light at the end of the tunnel. It has been confirmed by the UK Government that physical shops will be able to reopen from 15th June, albeit with social distancing measures in place. Indeed, 1st June also saw some easing of the current measures in terms of seeing family and friends, with the result that some semblance of ‘socialising’ has begun again in the form of outdoor meet ups and barbeques.
Though there are positive signs for retail, they should also be seen very much as the amber traffic light to merchants, signalling a need to prepare to come out of the gates as quickly as possible, in order to be in pole position to take advantage of the impending ‘new normal’. As part of this preparatory stage, there are four key areas for retailers to consider as they get ready for the Government’s green light.
Ensure your staff are on your journey with you
It’s been a tumultuous time for businesses, but at least equally so for employees at an individual level. It may have been necessary to furlough a vast majority of your employees during lockdown. You may even have had to make some redundancies. These measures, as unavoidable as they might have been, could have left staff feeling disconnected from your business, and perhaps even lacking enthusiasm.
Your staff are your greatest asset when it comes to getting your business moving again, as their commitment will fuel your success. Keep them informed, therefore, of your plans to ‘reopen for business’, no matter how gradual. To best support you, it is crucial that your employees reconnect with your business and understand the role they need to play in your journey into the ‘new normal’. Only by doing this can you ensure that your team is empowered and ready to work collaboratively towards the right goals at the right time.
Assess your financial situation and do what you can to trade without long-term damage
This might mean beginning to trade again in a slightly reduced capacity before going full steam ahead. You might feel that this is a consolation prize, particularly if your competitors are reopening in a wider capacity right away on 15th June.
Don’t forget though that recovery from this situation is, for many, likely to be a marathon and not a sprint. Beginning to trade again, even in a very scaled back manner, will allow you to get back on the radars of your customers so that you can ensure they are re-engaged before you build up to operating at full capacity. Moving too quickly may put unbearable pressure on your resources before the landscape is ready for you to reap enough of a benefit to counteract this.
Understand what structural or longer-term changes you might need to make
The COVID-19 landscape might give you a reason to justify experimenting with changes that you have been considering for a while but have not had the time or resource to employ to date.
These adaptions may include things such as digital transformation, or changes to the way you market to or engage with your intended audience. Remember that we are likely not returning to our pre-pandemic existence with the easing of the current restrictions, but rather preparing for a ‘new normal’ that will require different navigation. It makes sense, therefore, to take this opportunity to look at your business strategy to assess whether you still believe it is fit for purpose – and address the areas where it is not.
Embrace ‘the new normal’
There is almost certainly going to be a lot of change in the way that the retail sector operates, even once the immediate threat of COVID-19 has subsided. The acute crisis has acted to accelerate trends that were already on the horizon – a continued shift to online rather than physical shopping, for example.
Digital transformation should be a top priority for merchants that have historically deprioritised this. In particular, online transactions allow for the implementation of new payment models and platforms such as ‘buy now, pay later’, which can boost volume and value of orders, and could account for anywhere between 5-20% of a retailer’s total sales.
It has been, and indeed remains, very important for retailers to follow government rules and guidelines as we battle the COVID-19 crisis. But it is equally important, especially as we approach a time of being able to reopen for business, that retailers are prepared and ready to do so in a way that allows them to survive and thrive over the coming weeks and months.
We are undoubtedly not out of the woods when it comes to the difficult times businesses and retailers are facing – but we must now consider the best path to succeeding in the ‘new normal’ that we are facing, and get retail moving once more.