Business is still reeling from the pandemic’s effects; retailers must now navigate a radically different trading environment that will include several new and developing tactics. Sensibly these tactics are considered a work in progress until the pandemic’s real impact comes to light.
Contrary to popular belief, the high street is not dead but it will need to change to ensure it survives. The Local Government Association released a white paper in December 2020 about this subject, stating that the Government has identified local authorities as having a critical role in the future of high streets and applaud the subsequent increase in funding through the Future of High Streets Fund. The Stronger Towns Fund and Towns Deal Funding will help many places adapt to changes and make the most of opportunities.
The impact of consumers changing habits will differ, depending on the retail concentration in individual towns and cities. According to retail analyst KPMG, their commissioned report states that high streets could lose between 20-40% of their retail offerings due to the accelerated shift to online commerce. The impact on local employment would also vary depending on overall employment opportunities in each area. It could affect between 1%-5% of the local labour force.
On a positive note also in the same report, KPMG says that once social distancing restrictions are lifted, it will become clear how people’s behaviour and preferences have been positively transformed. This information is marketing gold. The survey says that businesses have changed for the better as a result.
In contrast, others will find new opportunities and take advantage of this new era. For example, a restaurant or a cafe catering for office workers at lunchtime may target locals working from home. We already know that this is happening because of the increase in profits reported by Just Eat and Deliveroo.
Summarising the white paper for local government and the analysis from KPMG, we can predict that high street businesses will embrace change and implement a new innovative high street experience for consumers, giving retailers a chance to prosper.
As the former American president, Bill Clinton said:
“The price of doing the same old thing is far higher than the price of change.”
We look forward to seeing more cutting-edge start-ups, brands and manufacturing models. The high street’s changing face will initially lead to gaps, making way for new businesses led by Millennials and Generation Z-ers. We’ll also see some traditional brands successfully implementing new strategies, as the last 12 months have proved that just limping along is no longer viable. While some will fail, many will succeed, which will provide badly needed employment.
One example is the relatively new Consumer-to-Manufacturer (C2M) model, which has been getting some attention, as C2M is a disruption model born out of the pandemic. Here’s how it works: a manufacturer has a large capacity, such as a significant number of designs directly to consumers. When ordered, the item is quickly made to order and shipped out to arrive in a couple of weeks.
Manufacturing facilities are only producing items after the order is received, not before, thus shifting from the traditional process of designing it, making it and then selling it to create, then sell and only then make the item. The concept can only work because the price is attractive and customers are willing to wait because they’re getting exactly what they want. On top of that, manufacturers are happy to promote this option to make their facilities more profitable.
Right now, retailers like the H&M Group (Cos, Arket, Monki and Other Stories) no longer buy in bulk from manufacturers through wholesalers. So in effect, cutting out the middleman and at the same time taking advantage of the fact the consumers now expect to wait for a product as in-store purchases have not been possible.
New And Better Ways of Working
Focusing on the need for new ways of working, Forbes.com reports on Starbucks’s change of strategy to tackle the challenges faced by the pandemic’s longer-term effects. Starbucks plans include adding more drive-thru locations to its portfolio within the next three to five years and making the customer collection a more convenient option.
While KFC (Kentucky Fried Chicken) promises a return to inhouse dining as soon as it’s safe to do so, in the meantime they have also developed an app that promotes the click and collect option along with home delivery. KFC has combined these options with marketing to offer the latest products and promotional offers.
Leisure facilities have the most significant problems to overcome. Still, with careful handling and expert marketing and increased digitalisation, cinemas, restaurants, nightclubs and pubs will see an increase in footfall once the restrictions are lifted. Any business that can weather the storm is well placed to benefit from what the social epidemiologist, Dr Nicholas Christakis, calls a return to the ‘Roaring 20s’.
In an article in the Independent newspaper in December 2020, Dr Christakis said, “the human response typically reverses after people recover from the biological, epidemiological, psychological, clinical, social, and economic impact. “People will relentlessly seek out social interactions like night clubs and bars and restaurants and sporting events.” Also, everyone will spend more “liberally” again – behaviours that were all seen in society back in the 1920s after the Spanish Flu Pandemic.
Keeping Up With Change
There’s little doubt that the high street will open up again and for some, it will be unrecognisable. For instance, House of Fraser’s demise in Richmond, Surrey was a significant blow for the traditional department store concept and led to another empty retail unit. The good news is the building is in the process of becoming a COVID-19 friendly work hub, with the top four floors of the building providing up to 42,000sq ft of office space and 22,000sq ft of retail and leisure space on the ground and lower ground, delivering 550 employment opportunities.
So while we wait for these green shoots of recovery to appear, the best thing we can do is be prepared. Managing demand effectively is the key to success; effective planning means that you can take advantage of the upturn as soon as the market recovers. Here’s how.
- Put in place sophisticated workforce planning and predictive analytics to plan for talent pipelines in multiple future scenarios.
- Find ways new technology can enhance your talent offering for potential and existing employees.
- Understand and develop the skills you have in your workforce (not just your workers’ roles) and identify the skill gaps you will need in the future.
- Underpin creative innovation, empathy, emotional intelligence and leadership capabilities alongside critical technology skills.
- Put talent and capability management high up on the agenda, to make sure you embrace all the technological breakthroughs and innovation in your sector.
- Build and nurture adaptability and resilience in your workforce by harnessing a flexible talent mix.
- Re-think the traditional ‘one-size-fits-all’ HR programmes and policies and deliver up to date wellbeing programmes, development models, career paths, capability models and the redesign of jobs and compensation frameworks.
- Keep on top of regulations and compliance such as GDPR, working time directive, national minimum wage and right to work and avoid a fine.
- Remain one step ahead of any new regulations resulting from Brexit and the new trade deal with Europe.
- Invest wisely and cut down on outdated, labour-intensive staff management systems in favour up to date and progressive digitalisation.
ShopWorks offers bespoke and flexible systems that can overcome and improve internal processes to manage the workforce effectively, cut costs, improve productivity and profitability, which allows you to stay ahead of your competitors.