Seven key measures for retailers to boost resilience through the coronavirus crisis
Emma Robertson, CEO of ENGINE Transformation, shares her tips for sellers to help improve their eCommerce success - and not just survive the current challenging period, but be ready for success once it's over.
For many in retail, the phrase ‘unchartered territory’ could not go away soon enough. If the story pre-coronavirus was already one of increased pressure - from declining sales, to rising costs and intense competition, then today’s challenges may feel like an existential threat in comparison.
While we have seen a number of measures, such as a cut in interest rates, being taken by governments, this is all in service to damage limitation and enabling businesses to survive in the short-term. We are possibly months away from positive action that would stimulate demand and reactivate consumer spending.
Digital may offer a way to keep the sales channel open, but it is in the face of increased throttling on the supply side as factories are closed and supply chains are pressured through logistics complexities.
On the high street, public health initiatives and the shutdown of all non-essential stores have led to footfall evaporating literally overnight, further compounded by a fall in discretionary spending as shoppers tighten their purse strings to defend against uncertainty.
There’s no denying that the economic outlook is gloomy, perhaps for everyone except the supermarkets, pharmacies and digital media providers. However a number of measures can be taken to increase the chance of survival and build readiness for when we reach the light on the other side of the tunnel.
1. Communicate with your customers
This one will come as no surprise, but it’s important to let your customers know if you are open for business and how they can shop with you. With information and guidelines updating daily, it can be a struggle to keep up, opening the door to ambiguity and assumption. Retailers providing ‘non-essential’ goods, where access to the customer has been restricted to online channels, need to be especially mindful of this. If your high street presence is in shutdown but your warehouse remains open to fulfil online orders, then you need to tell your customers, as they may otherwise assume that all operations are impacted and look elsewhere.
Many brands are already using a combination of store signage and digital channels to reach out to customers directly. The best of these explain how the retailer is taking appropriate safeguard measures and provide a clear call to action, including updates on store opening times (where relevant) as well as any expected impact on fulfilment times. They also provide signposting to the online store which can help to short-circuit the gravitation towards pure-players such as Amazon for online purchase.
If you're seeing spikes in online orders and struggling to meet demand, a clear explanation of any delay can help save the sale. Take Waterstones, for example, where the closure of stores means that the ship-from-shop model is no longer possible and orders are having to be redirected via the warehouse.
Delays to customer orders are clearly signposted on the site with a humble explanation to keep customers on side. Amidst the scenes of dystopia, it’s easy to forget that there is an extraordinary amount of consumer goodwill out there and in most cases, customers will make concessions to patronise brands they love and that they want to see weather this storm.
2. Go where people are already going
As self-isolation and curbs on transport encourage people to retrench locally, retailers should look for alternative ways to maximise access to product within current constraints.
Argos and John Lewis are already well set-up with access via Sainsbury's and Waitrose respectively. However, if we assume that many customers will be happier in their cars, then there could be benefit in enabling drive-through collection points at the back of store or using the available space at retail parks for customer pick-ups. Smart lockers in convenient locations are another opportunity for reaching customers without incurring the high costs involved with last-mile.
3. Partner with existing platforms to broaden reach at speed
In many ways, this can be seen as the online version of point two. Building and optimising proprietary technology is costly and takes time. Retailers with an immature eCommerce offer, who are struggling to offset the decline in brick and mortar with online sales, could look to new channels to broaden access.
Aggregators like Zalando are accelerating moves to make it easier for retailers to sell on their platform, with initiatives that include a temporary waiver of the commission fee for all new and existing stores.
4. Play with the store format
Social distancing calls for a rethink of how stores manage the flow of customers. Whether that be markers on the floor for queuers to observe appropriate distance at checkout or switching up the location of products to minimise bottlenecks, stores should look to suspend some of the usual tactics that encourage casual wandering in the hope of a cross-sell.
Some, like Halfords, are experimenting with a front-of-store service where staff fetch products and bring them to a temporary desk at the entrance for contactless pay. In the new normal, where shoppers are mission-led rather than browsing for inspiration, speed and convenience wins.
5. Relax terms on returns
Despite the fall in discretionary spend, an increase in the amount of time spent at home is likely to mean a lot of bored people browsing and shopping online.
As customers prioritise comfort, some categories are poised to do well - those relating to home and even some apparel categories, such as athleisure, for example. Of course, the ordinary channels for managing reverse flow, such as the post-office, may no longer be available. By amending terms to allay any fears of not being able to return a product within normal policy period, retailers have a better chance of converting sales.
6. Explore financial support offered by local government
A raft of new measures have been announced by the government looking to do whatever is necessary to minimise impact. A stimulus package of £350 billion has been ringfenced to shore up smaller enterprises as well as larger firms.
Alongside an exemption from business rates for 12 months, loans and grants have been made available for those needing quick access to cash to help meet fixed costs.
7. Prepare for pent-up demand
If the modelling is to be believed, then it could be June before we are on a downward growth trend for the virus. As optimism grows and confidence gradually restores, we’re likely to see a recovery in demand and retailers would be wise to plan ahead.
That could mean stabilising the supply chain by pre-booking logistics capacity or using intelligent software for daily forecasts to get ahead of the queue for new shipments. It could also mean keeping smaller suppliers afloat by paying up sooner so that they continue to be there when you most need them.