COVID-19: How traditional retail can fight back
COVID-19 has traditional retailers gasping for breath while the ecommerce pure plays have the mildest of symptoms. There is a war on but surrender is not an option says Tim Hay-Edie from Virtualstock
With the country in lockdown, my daughter wants to make face masks for the family. After looking at a number of YouTube videos she decides on a design. So, we go to a website to order materials. On the homepage it says simply, “... due to a significant increase in demand all new orders could take up to 21 days to deliver.” While I digest this, my daughter wonders out loud why would anyone place an order?
This is not an isolated case. In a short space of time I find Next, Schuh, M&Co, River Island, Majestic, UGG, and Hobbycraft all have similar homepage messages. In some cases it’s to protect staff at distribution centres who felt unsafe; or that their supply chains have been disrupted; or (reading between the lines) their systems have buckled from unanticipated demand.
This is clearly an unparalleled disaster for UK high street retailers. Stores are closed, stock is lying unsold on shelves, staff are furloughed, and now the website is offline.
So, where do their customers turn? And clearly there are still customers looking to spend. During this lockdown online sales for some retailers have outstripped even pre-Christmas orders. Predictably Amazon is taking the lion’s share. Amazon has even announced it is hiring UK staff.
For the moment we can only guess what the post crisis retail landscape will look like. Things are clearly not going back to the way they were. When the dust settles we can anticipate that people will have changed. There will be new ways of social interaction, new ways of working, and new ways of shopping. Almost certainly Amazon will emerge with greater market share. And, almost certainly, traditional retailers who have had no sales channel for 2, 3, 4(?) months will have trouble rebuilding their customer base - if they are even still solvent.
The UK’s response to this virus has been described as a war footing. We must protect the NHS. We must stay safe. The army has joined us in the fight, and has helped the NHS to build Nightingale Hospital in record time. This is an example to us all.
It is time for traditional retailers to also fight back. The future of our industry depends on it. You owe it to your customers, to your staff, to your shareholders, and to the UK economy to keep operating. This is a war with battles on many fronts.
Conditions that are unsafe for warehouse staff are unforgivable. Even if they made no plans for the virus early on, senior management should make immediate steps to change things now. Managers can start by working shifts on the warehouse floor. They should eat in the staff canteen and experience the social distancing shortcomings themselves. They must find solutions.
As I discovered, decent face masks can be handmade by anyone with suitable fabric, a design, and a sewing machine. It seems they don’t have to be N95 if everyone is wearing them and other measures are being followed. Similarly, eye protection and hand sanitiser are in short supply, and rightly prioritised for health workers. So, again, we must adapt. What would the army do?
Hand sanitiser can be made from industrial alcohol and glycerin (or aloe vera gel); and eye protection from ski goggles or scuba masks (in the news there are plenty of examples of even medical personnel doing this). At the very least these are tactical solutions to keep the team equipped and fighting fit until supplies arrive. The army would not simply send everyone home and shut up shop.
Supermarkets were slow off the mark, but now social distancing measures are falling in place. Security staff are on hand to explain the measures to customers. Demarcation lines are taped to the floor, and the cleaning staff are disinfecting shopping carts. Indeed, making cleaning staff and the cleaning regime more visible provides reassurance to everyone. What works for Tesco will work in your warehouse too.
In the warehouse canteen why not stagger lunch hour? And, for the duration of this crisis, provide snacks 24 hours to accommodate the extra shifts needed. If orders are piling up, then you need more shifts. Some supermarkets are open 24 hours with stock rooms receiving orders and staff stacking shelves through the night. Could that work for you too?
This crisis requires BCP across the board. Failure is not an option. HR should anticipate staff absences and prepare for temporary cover with training materials, daily orientation sessions, and open-door hiring. Reach out to the local community: We are hiring temporary staff now! Help us keep our distribution centre open!
Meanwhile your customer service team should be working from home. If the systems they use cannot be adapted for home use you have to swap them out (even temporarily). There are platforms that can run on smartphones or tablets. Tell your customers for the time being they have to use a chat bot. They will be happy to adapt if you explain the reason behind it. We are in this together.
What then are the options if your supply chains are affected? If you have run out of key lines? Again, like the army, you must be agile and look to other channels. You can source alternative products and dropship those orders to the related suppliers. Solutions do not need to be hi-tech or even automated. New products can be added to your website manually. Orders can be extracted from your systems and passed to suppliers in batches.
There are SaaS dropship management platforms that can be up and running in hours. Orders can be mapped from spreadsheets while your IT teams build against APIs to automate and harden the process. What is important is to keep the webstore operational, to keep it stocked, and to keep customers coming back.
They say you should advertise in a recession. It’s the best time to increase market share. So promote your webstore. Fill it up with products that the public want in these times – and sell, sell, sell. Each sale is a win. You are fulfilling a need, you are keeping your teams employed, you are keeping the economy going.
And what can be done about that unsold stock in your locked down stores? Thinking outside the box, is it possible to bring it back into your warehouses, and onto your webstore? Or to do a stock take and treat the store network as a series of temporary warehouses? It’s worth consideration if the alternative is the skip.
When there’s a war on conventional BAU goes out of the window. Yes, you should plan, but you need to be flexible and be able to adapt. The government is providing a safety blanket, and there are loans and breaks to be secured, but none of it will save your brand.
If your webstore is your only sales channel you have to keep selling. You have to keep your customers satisfied. You have to stay in it, keep the lights on, and fly the flag. There’s a war on. Surrender is not an option.