Reimaging Retail: exploring its reinvention

The old saying when the going gets tough the tough get going is poignant for most businesses in these extraordinary days and the Retail Industry more than ever is demonstrating how it has become the mother of reinvention. Everyone I speak to is talking about the ingenuity of local businesses.

My own local pub ‘ The Wellington Arms’ as an example could not trade in the pandemic and recently created an ‘eat at home’ food service -‘The Welli Deli’ selling their delicious home picked, home cooked dishes. It is inventive, has seen great uptake and enabled them to continue to look after their customers and generate revenue. This is just one example of many, from ‘creating your burger meal kits’ to ‘gin party kits’, consumers cannot get enough of this ‘kerbside collection’ it seems!

Whilst the innovation is great for consumers, the starkness of everyday reality in many countries is putting huge pressure on traditional retailers’ business models, including operating costs such as rent, rates, insurance and staffing, the threat from online retailers and changing consumer behaviour. Forrester has predicted that there will be a global loss to Retailers in 2020 of $2.1 trillion. This includes stores who have stock that may not sell e.g. sports clothing with so many sports events cancelled or fashion retailers who are holding stock that may be out of season. Tenants are struggling to pay rents and this is coupled with the uncertainty around when consumers will be ready to out again as restrictions are lifted.

Many retailers are reinventing themselves: their stores with a new fit-out for consumers post pandemic; their online channels for omni channel and zero-touch sales and; resilient supply, more local supply chains a post-pandemic.

Beyond those mega trends for retail, local businesses are finding innovative ways to continue to trade and serve their customers in the pandemic. One such example is a 152 year old family pub ‘McKeevers’ just outside of Dublin in Ireland. They knew their customers were missing their favourite drinks whilst under restrictions  so they set up a drone delivery service of free beer sent to local customers within 2 kilometres so they could enjoy their favourite tipple and snack. This was accompanied with a note "We hope you're all doing ok and please have a drink on us”. Was it simple? Yes, it was personalised, and it has helped build customer loyalty in the rural location where it is based.

Fickenschers Backhaus, a German family bakery business now in its 11th generation which was first set up in 1625. Today, the company employs more than 100 bakers with a passion for crafting delicious delicacies. They have 9 stores but have also set up an online service. The cloud solution allows them to build a stronger relationship with their customers, from social media to the online store to after-sales service and has enabled them to extend their business which they are doing by launching what they call functional food—from protein bars and cereal balls to beauty bars.

Post pandemic – 3 considerations for Retail

1. It is unlikely that things will return to exactly the same way they were previously, and consumers have developed a larger appetite for things at the tap of a key board. Optimising your online service will continue to be an important part of any business but especially for Retail and some may find this model is lower cost.

2. There will continue to be a swing in localism, and it won’t be driven just by price. Consumers who were forced to change their consumption habits up to now may continue to if their needs are met. And businesses who have built up trust and rapport by their service will continue to thrive, but businesses should focus on continuing to build customer loyalty.

3.  Consumers will still be hesitant about visiting shops. Safety in store will be a priority. Investment in permanent sanitizing stations lowering shopper capacities and deploying technology that can monitor customer temperatures may be a permanent part of the future.  Many businesses will be looking for more solutions and inventions that will transform the retail landscape and aid in contactless shopping.

Satya Nadella, CEO of Microsoft recently said  “We've seen how critical digital technology is in the three phases of this crisis--from emergency response, to the recovery phase, to the re-imagining [of] the world going forward. Every organization will increasingly need the ability, at a moment's notice, to remote everything--from manufacturing to sales to customer support. Organisations "will also need the ability to simulate anything--from how the immune system responds to a virus to how a fault in a wind turbine can impact our power supply. And they will need to be able to automate everywhere, to enable faster, more agile response--from triage in health care to the maintenance in smart buildings to kerbside pickup in retail.”

Whilst it has been a laborious, turbulent and difficult journey for many, the Retail Industry has clearly demonstrated it is paving the way to the future by tapping into creativity, innovation and reinvention to cater to the changing habits of consumers. Entrepreneurship is evident in all areas and the retail industry as it stays at the forefront of this new world.