You need to be innovative to respond to today’s challenges
In this, the last of my Spotlight on Retail series, I challenge you to think ‘Out of the Box’ when it comes to responding to recent trends in not just how people shop, but where.
The Big Picture
According to the Office for National Statistics, as reported by HR Magazine, “Encouraging workers to work from home and closing unessential businesses subsequently led to 44% of employed adults to work from home in the UK”1. This was quite clearly a key driver for the increase in online purchases discussed in previous articles. However, it was also likely the driver for another trend under-reported by mainstream media. Direct to Customer sales increased by a whopping 45.5% in 20202.
Given that a recent polls by Gardner and Future Forum show that many employees want to continue working from home more often3, and that a survey by Tiger Recruitment (also reported in HR Magazine1) indicated that 59% of employers would be more supportive of working from home as a result of the pandemic, it is not unreasonable to expect that the associated consumer spending trends will continue.
So what does this mean for the independent retailer?
Clearly, for city centre based retailers, or those situated near business parks, it means a decrease in passing trade, particularly during the week. This might result in an uptick at weekends, or, as has seemed to have happened, it might simply drive customers online. For retailers selling prepared food, it probably just means a simple loss of trade.
The opposite is true for sub-urban based retailers who, in some cases, are seeing 100%+ increases in demand4.
Based on this, the obvious answer might be for city centre retails to relocate to suburbia! It certainly doesn’t seem beyond the realms possibility that a move outward from the city centres into more local sub-urban high-streets will suit some businesses. However, more innovative approaches may allow city centre based retailers to get the best of both worlds.
If you sell something that you produce, is there an opportunity to create one or more DTC channels for your product? Or, perhaps to partner with local suburban stores to sell your product?
Customers expect delivery options, particularly with online purchases. This has driven nearly 1/5 retailers to introduce online delivery services according to the Retail Times5. But delivery services can be seen to be expensive. According to a 2018 survey, 39% of consumers would abandon their cart if there was a charge for delivery6.
Is there an opportunity to collaborate with other stores to reduce, or preferably, eliminate delivery charges to the customer? Given consumers’ growing concerns about the environment and sustainability, perhaps there is an opportunity to use a zero emission delivery service? Your customers might even be prepared to pay for this. Have you asked them?
Given the challenges being experienced in the Retail sector, collaboration, even with competitors, may be the only way for some independents to survive. This is the basis of a retail tech innovator’s product, BrewRound, which facilitates loyalty rewards across independent coffee shops.
How can you be innovative in your collaboration efforts to drive more sales so that everyone wins?
Collaboration may involve local leaders outside of commerce in order to drive through changes such as those advocated in the Grimsey Review Covid-19 supplement report: Build Back Better.
Twenty twenty one may bring the promise of Covid vaccinations, but there will be a new normal. Some of this will simply be old trends accelerated by the pandemic, some will be new trends caused by the pandemic. Identifying and tracking these, and looking for the opportunities that they provide will be key to your success this year, and beyond.
I hope you found this article, and the other’s in this series, insightful, and they’ve given you some food for thought. Independent retail stores like yours are essential, not just for a thriving local economy, but for a thriving local community as well. That’s why I chose your sector for my first Spotlight on… series.
If you need any help getting from ‘How can I do this’ to ‘I can do this’, please get in touch for a no obligation discovery call.