The Future of Retail during and after COVID-19 by Asad Shamim, CEO Furniture in Fashion
COVID- 19 has had a drastic impact on organisations, the economy in the UK as well as individuals health and livelihoods.
In particular, the disease has had a catastrophic effect on the retail and hospitality sector.
COVID-19 is the most significant challenge in a generation for consumer-facing businesses. UK retail has significantly suffered as a result of less spending by consumers and the fact that the majority of stores remain closed.
The coronavirus crisis has had an impact on almost every sector in retail. Grocery, eCommerce, fashion, luxury and many others. Although, it is fair to say that some have been doing better than others, in particular, grocery and online businesses.
Over the past few weeks, retailers especially grocers and other retailers that have been classified as “essential” have had to make adjustments such as shutting down nonessential counters or placing two-metre floor markings on their floors to promote social distancing. These measures have had to be implemented overnight in a bid to keep their businesses running.
On the other hand, there are retail businesses such as multichannel retailers, those with a physical and online retail presence who have encountered a difficult period. In particular, the main sector that has been hardest hit are department stores. Retail analysts fear that retailers that have closed on a temporary basis as a result of the lockdown may not reopen their doors.
Many Luxury department stores such as Selfridges, Harrods and Liberty London have had to completely shut their stores. One of the reasons for this being that the lack of affluent Chinese shoppers they attract. In addition, this impact became more severe when two of the countries, Italy and France that host the majority of luxury brands were severely impacted.
With coronavirus changing the way retail operates on a day-to-day basis, both staff and consumers are faced with immeasurable uncertainty. However, whilst it has brought uncertainty and unprecedented disruption, it has also prompted many businesses to change their way of working and to adopt methods of working that they had been putting off.
As we move from the “Phase 1” Lockdown programme into “Phase 2” adopted by the UK Government, we now need to look at future planning of the retail sector and how this sector can respond to new challenges and opportunities:
Government Backing & Support- Although the Government offered relief to certain organisations in the retail sector by way of a small business grant and business rates relief, their response as has been throughout this pandemic was not pre-emptive but much rather responsive. They have lacked an understanding of the true impact this has had on retail business in particular and the economy. The Government should devise a step by step programme to get the retail sector back on its feet and provide further assistance by way of grants.
Digital Solutions- Consumers are turning to digital means whilst remotely working from home during the lockdown. Ecommerce has increased for grocery, household items and personal hygiene. For example, online grocery has seen a 28% increase during the pandemic. We expect the popularity of digital means to remain after lockdown, giving retailers further avenues to connect with consumers and sell their products.
No-contact methods of payment- The use of ATMs and cash have drastically declined throughout the crisis. However, there has been a significant increase in contactless payments. Now is the ideal time for businesses to adopt payment methods such as Apple Pay or PayPal or other platforms which are relatively easy for consumers to use.
Lifestyle Change- The pandemic has forced a shift in consumer spending where consumers are spending more on food and preparing food at home. There has also been an increase in shoppers spending more on skincare, vitamins, nutrition and personal hygiene. They have also invested money on home improvement. Retailers will need to shift their focus on these types of products and make substantial reductions on these products to increase and drive sales.
Local Shoppers- Consumers have turned to local options to replenish basic household items. Local stores have played a pivotal role in providing essential support during this difficult time. Many retailers have adopted shopping hours for vulnerable individuals as well as click-and-collect services. It is apparent that consumers are choosing these businesses in recognition of the role they are playing in serving the community. Retailers will be forced to rethink their local presence.
All in all, retailers have had to adopt a change in focus in a short space of time. Now is the time for them to adopt the changing attitude of consumers which is very much here to stay long term. The retailer also need to adopt strategies that will help them succeed in the future even if that means incorporating change. Customer focus has become more important than ever. Retailers need to analyse customer behaviour and how their attitudes to shopping have changed throughout the pandemic. It is only then they will be able to establish where to drive profitable growth, allocate funds and access new forms of income by adopting an innovative approach.
For retailers who use this time to transform and adapt their businesses to current trends, the results will be fruitful as they will not only increase profitability but survive in a volatile market which is becoming the norm for an indefinite period of time.
This was posted in Bdaily's Members' News section by Samantha Peters .