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Our first steps into the Retail Unknown

SWL Crisis Recovery - Insight, Transition, Optimisation

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As the Retail and Hospitality sectors step tentatively into their unprecedented new arenas, every business wants help from a trusted advisor.  Retail Store Improvement and Optimisation specialists, the SWL Group, are a proven and robust choice for todays complex market challenges. Our Crisis Recovery programme offers three essential components for Insight, Transition and Optimisation through this challenging period.

Find out more about SWL Crisis Recovery

Fellow Thought Leaders Retail Bulletin, Nuxeo, RetailDive and Neustar among others have recently published articles and reports on the Retail sector’s staged re-opening in the wake of the COVID-19 Lockdown.  SWL Group has synthesised and developed many of the key points and insights in this article.

Can we know the unknown?

As many businesses take cautious steps in the Retail New Normal, the landscape in front of them is an uncharted and daunting patchwork of light and dark. Causes for hope are tempered with cautionary tales and mass redundancies. Retail Bulletin’s report gathers together many major ‘good news’ stories, in an admittedly blighted landscape.

To first put these successes into context, we must acknowledge many other unfortunate examples. Harrods department store is to cut 672 jobs due to the impact of the coronavirus pandemic. IKEA is shedding 7,500 jobs, Monsoon Accessorize closing 35 shops, with Debenhams, John Lewis, Boots Opticians, Quiz, Pret a Manger, Travis Perkins and many others following suit. The Hospitality sector has of course been decimated.

However, Heidi Birkin, Head of Marketing (Deputy) points to encouraging signs on the horizon:

There is still a long way to go and businesses are by no means out of the woods yet. This is a very positive start, though. Getting venues open and customers through the doors means that more jobs will be kept safe. Despite the positive news we need support for those businesses that are still not able to open, and for those whose jobs rely upon them.

Among the positive signs for Retailers in the second half of 2020 were:

  • ‘Consumer confidence edged up in the latter part of June as Covid-19 lockdown restrictions began to ease.
  • According to GfKs long running Consumer Confidence Barometer, the overall index rose by three points in the two week period to -27.
  • Joe Staton, GfKs client strategy director, said: Despite the backdrop of dire warnings about the state of the economy, large scale job losses, the end of furlough with the prospect of further unemployment, and a possible second-wave of Covid-19, consumers appear to be slightly more confident as lockdown loosens across parts of the UK.”
  • While the index measuring peoples expectations for their personal finances in the next 12 months rose by one point to -3, the index measuring peoples expectations for the general economic situation in the period increased by six points to -42.
  • There was also an uplift in the major purchase index which rose by seven points to -25.
  • ‘The seven-point jump in the major purchase index could bode well for reopening daythis Saturday as more shoppers hit the high streets after a trip to the pub and visit to the hairdresser. However, economic headwinds could easily blow any recovery off-course with confidence remaining fragile and volatile amid few signs of stability.’
  • New research has found that over 960,000 staff in the Hospitality sector are expected to come back from furlough in July and further 720,000 by the end of September.
  • Sainsburys and Tesco are posting strong first quarter results.
  • Samsung has opened a new experience-led store in Bristols Cabot Circus.
  • Adidas has opened a new flagship store on Londons Oxford Street as it looks to provide customers with a new innovative shopping experience.  The store is the brands most digital to date and features over 100 digital touchpoints that are all powered by green energy.
  • Amazon Go Grocery outlets are set to be a powerful brick and mortar convenience

Birkin further offers a succinct summary of this Customer ‘DoubleThink’:

The infection rate has reduced, but not disappeared..  The country is itching to get out of quarantine, but cautious and concerned about their safety.  The lockdown is easing and many in the retail sector are in the process of working out whether and how to recalibrate their businesses, workplaces and working models to be Covid-19 safe and build resilience for the future.

In reality we are not really returningto work but defining a new work paradigm which puts the health and safety of employees and customers plus business agility at the centre.   Whilst challenging, this is also an opportunity to make sustainable improvements to your business by rethinking working patterns to optimise your workforce  and building flexibility into your operations to react to changing demand and regulations.

 

How do we adapt our workplaces, working patterns and practices?

Retail Bulletin echo many of the focus areas that form the hubs of Retail Optimisation specialists SWL’s analysis:

  • ‘Theres a lot to consider in preparing your workplace to deliver a positive experience, meet social distancing requirements and adapt to changing demand.’ Customer capacity and flow will need to be modelled. This will lead to avoiding congestion and pinch points in store. Ergonomic and practical waiting/queuing areas outside stores need to be designed, organised and marshalled.  At point of sale, screens protect customers and staff, and mobile phone apps facilitate ordering and purchase. ‘Store experiences will evolve.’
  • Colleague shift patterns need to change, of course. Safe working capacities might limit the number of staff members allowed on each shift, which will alter operating hours and shift patterns. Start, finish and break times are staggered to prevent over-crowding and aid social distancing in common areas.
  • ‘Rotating schedules, or squad scheduling”, are emerging as a technique to de-risk infection and avoid cross contamination.  Workers are split in squads – fixed groups – and then into shifts.  Each squad works independently of each other and does not overlap with any other squad so if someone does become infected or displays symptoms the squad immediately isolates and the rest of the team gets tested.  This concept can be extended to buddies’ – if certain tasks require two people – unloading deliveries for example – the buddy system means the same two colleagues always work together- again limiting the spread of any infection.’

Such is the sheer complexity of these new shift patterns, layouts and logistics that Retailers are seeking expert assistance from such specialists as SWL. Our analyses, based on data fact, will empower your business to make informed decisions for optimising safe and efficient working practices. Workforce management systems, scheduling and all aspects of your Operations are in expert hands with SWL.

How do we build confidence among our customers and colleagues?

The report stresses the importance of ‘transparency, clarity and empathy’ as business endeavour to reassure employees that they will be safe. Huge changes to their working environments will of course lead to discomfort and anxiety.  Clear communication of new policies and procedures is paramount. There are many tools that companies will be employing to implement these new procedures, including:

  • body temperature and COVID-19 symptoms tracking
  • Deputy shift questions to check on colleagues’ mental and physical health
  • questions on travel
  • provide contactless or minimal access points.

 

The report points to productivity experts such as SWL to marshal your business through these difficult transitions.  According to the report, an ability to “track labour costs against sales or demand will help make informed decisions about how to adapt your business model to make the most out of the current environment.  Nows the time to invest or review business insight… to give you powerful insight which can help power and sustain your business – enabling your business to adapt and flex to the emerging new normal.”For further information https://www.deputy.com/blog/employers-guide-for-returning-to-work’

CX has never been a more important or precarious priority. Daphne Howland also emphasises the fluidity of customer loyalty in this new retail environment:

We don’t have loyalties right now — I’m considering brands I’ve never considered before. It’s a reset.

 

Business Optimisation

1) ‘Purpose and altruism’

As has been supported in a number of SWL reports this year, a company ethos of ‘purpose and altruism’ has become a crucial factor in building customer loyalty and improving CX. For example,

‘Aldis UK supermarket chain has ruled out selling chlorinated chicken or hormone treated beef, regardless of any future trade deals that the UK may secure. It has also pledged that its chicken and beef ranges will continue to be 100% British. The commitment sits alongside Aldis existing policies to only sell British products across multiple categories, with all of its core range of fresh meat, milk and eggs coming from UK farms.’

These highly visible ethical standards are a powerful tool in forging loyalty in this shifting customer base. The recent nuxeo.com report confirms this, citing the same fluid loyalty issues/opportunities in digital shopping:

‘Revealing the scale of the challenges facing retailers and brands in 2020, the research suggests that more than half of UK shoppers (54 per cent) would switch to a competitor if their digital customer experience doesnt measure up – rising to 60 percent of 16-24 year olds.’

“I am more loyal to a retailer that offers exceptional customer experience.”  63% of UK shoppers agree.’

 

2) Increasing Personalisation

A report co-written by retaildive.com and Neustar highlights the importance of building a customer base through personalisation. We must focus on the customer not simply through their interaction with our company apps and websites, but also through building trust and engagement in-store:

The path to purchase has never been so complex. The key to attracting and maintaining customers is to create personalized experiences, and retailers recognize that developing this connection between stores and customers is a win-win. Its easy to see why: customers appreciate the individualized approach, and as a result, they buy more.  However, while personalization increases retail revenue, developing the complete customer profile needed to create personalization is becoming more and more challenging.

Data is everywhere, but new data privacy regulations limit how businesses can gather and retain customer information. As a result, retailers must implement new ways to encourage customers to offer their personal data.  Although the drive to increase personalization may be daunting, it also presents an opportunity. Successful retailers will be those that combine technology with a back-to-basics marketing approach that focuses on the customer—both online and in-store—and builds connection and trust.

 

To further develop this crucial focus on CX, in next week’s article, SWL will offer insights into ‘Focussing on the Customer’ and Personalisation.

SWL’s new programme ‘Crisis Recovery’ is ideally suited to helping your company deliver optimised solutions in this new Retail landscape.  With our extensive experience in Retail productivity, we will employ data fact and an intimate analysis of your business’s DNA to identify real, workable solutions.

Everyone wants help from a trusted advisor at a time of uncertainty – Retail Store Improvement specialists, the SWL Group, are a proven and robust choice for today’s complex market challenges. In the first instance if you would like more information on SWL Crisis Recovery, just call Gareth Richards on +44 (0)1527 895 020. Alternatively, you can email him at gjr@swlgroup.com.

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