Post Covid Retail – preparing for a Covid Winter

Post Covid Retail – preparing for a Covid Winter

The news has rarely been a source of comfort for retail in recent years and is unlikely to be optimistic in the coming months either. As the UK moved out of lock down and retailers began to see customers return to the ‘local’ high st.  The government’s latest announcements of tighter restrictions will undoubtedly have sent a second wave of trepidation through the majority of retail boardrooms.

Many retailers now fear that the financial strain and customer appetite for physical shopping and the need for online purchases are such that they are questioning their brand viability. These are very troubling times and over a series of interviews from the last few weeks we know that preparation for what happens next is vital.

As a business we spend our lives working with retailers simplifying operating models and ensuring they are setup to operate as lean as possible, and whilst we recognise that long term business survival is never delivered through cost cutting exercises operating a leaner more flexible operating model  allows the business to adapt much quicker.

We came up with some actions that retailers need to take now to ensure that they survive and even thrive. Keeping things as simple as possible this is our top line action plan for preparing for a hard winter.

  • Heads up Objectivity.
    • Refresh where you think the business could or should be in 6 months and start an independent review of what that means in terms of structure, people, cash flow, customer engagement, team engagement, property and systems. Be bold and make sure that there are no vested interests with those engaged to complete the review. Having done this recently we know it is not always best as a HR led project.
    • This is sensitive stuff, if this is a trusted internal colleague, they must be given access all areas, ask any questions access. This includes challenging the senior team. This person(s) must also be fully briefed on where the board thinks the business should be in the 6 months.
    • Too many people take too long doing this, conclusions and evidenced recommendations need to be forthcoming within 3 weeks of start.
  • Business Simplification.
    • From step one you will have an idea of what parts of your business is aligned to the vision and what parts are still operating as they were previously. Identify the quick wins on immediate operations improvement and implement swiftly to gain maximum benefit. Some may be structural; others will be removing duplication. In post Covid times this may have already started by default.   
    • Have a clear plan, concisely communicated on what activity you need for the customer facing business based on your buy and hold people to account on its execution both at product level and in its execution. The part we have found many retailers value most yet achieve least; we tend to assist in implementing completely as role modelling this is a must.
    • Reduce complexity and needless bureaucracy by making critical paths understood and commonly adhered to. A worthwhile challenge for all as this discipline saves money and expedites retail delivery enormously.
  • Rigorous cost challenges
    • Broad challenges to every team member on how we save money every day, chart and make sure there is some competitive edge to it. The ex-Wal-Mart elements of our team are used to this being a way of life and have helped interpretations of it throughout the UK and Globally.
    • Review GNFR suppliers in each department and evaluate ROI in the short term. Explore payment holidays or a more permanent financial arrangement to meet current business costs. Negotiating is iterative not static. Our recent clients have left this too low down the seniority list and we believe it is worthy of a fresh look.
    • Always measure success, cost savings and certainly against any pledges given internally or externally. Savings need to be front-loaded and sustainable.

Nothing ground-breaking, just a little more urgent than ever before. If you have not commenced these actions, ask yourself if you feel fully prepared for the hard Winter ahead. It may be a tough one, yet we know there are ways through to a Spring where, unfortunately, some of the competition will no longer be there.

Post Covid Retail – Team Yes, No and Maybe ?

Post Covid Retail – Team Yes, No and Maybe ?

As part of the series of brief interviews to explore retail practices that are essential for growth in s post Covid landscape we spoke to Phil Dorrell on his long held views on cognitive diversity and why it is the choice of all brave and self-assured leaders.

So Phil first of all what is Cognitive Diversity, it sounds a bit complicated ?

It’s a very simple concept to understand as we are all sub-consciously aware of the people who have the same views and background as we do and those who are different. It’s no surprise that we tend to gravitate to those have similar views and values, it’s human nature. We do it even online in social media where we follow people we feel share the same opinions and ignore (or worse) those who think differently.  In business we do the same, and this is where the problems can occur. Listening to and understanding more diverse views is vital in modern culture and business. Many of society’s ills come back to a lack of listening and understanding.

So in practice what does that mean for business and especially retail ?

Well we have had a very challenging year and many people will have seen colleagues leave or be furloughed and others may have noticed a distillation in the leadership, they have circled the wagons and kept the favoured team in the camp.  As the CEO and HR make hard decisions it is a brave leader who retains the people on the board who have different views, who question the status quo, not out of spite but because their experience and references may be very far away from the leadership teams. Having had this conversation with many retail leaders I know when I ask them about their team the usual response is one of shared experience and togetherness. Very understandable, especially now, yet not likely to push back and offer contrary views. The current post Covid landscape has changed remarkably, and it is now that we need a very broad set of experience and views in navigating through it. Nobody has all the answers, some diverse teams may just have most of them.   

Are you suggesting that people need no men rather than yes men ?

If you boil it down to the core, then yes that is correct, although that is a simplification. I am saying that if CEO’s look around the board room to a team of nodding heads, on strategic decisions and how to execute them, you have to question where are the nay-sayers who would challenge and sharpen decision making. It is much easier to work with people who agree with you all the time, the most productive teams are those that allow real challenge at any level and from that gain from the melting pot of experiences and views.

This sounds a nice to have but how many people really do it ?

The picture I have as a feature of this article is of a small Ford pick up truck, many will recognise. Sam Walton actively encouraged people to swim against the stream, something that meant he had a broad set of views to develop his business. Yes he had really trusted family and team members, yet he was always willing to listen to views outside this small group and accept challenge within it. I know the current Wal-Mart team would like to think this still happens. I have seen this in retail boards from Africa to Australia and of course Europe too. The real added benefit in establishing a cognitive diverse team is that you will rely on fewer outside consultants offering unique perspective that sounds like either genius ideas or re-hashed from a textbook. When the leaders feel they have no say or contribution they often call in consultants to take an “objective” view. I am really proud we have insisted on complete objectivity when working with clients, always interesting, often fun, but inevitably everybody wins when contribution is broad and seasoned judgement applied.      

Post Covid Retail – Marketing costs, or does it ?

Making a fixed cost Impact

As part of a series of interview with the team we have been asking what lessons retail should have learnt or should be learning as we deal with the ongoing pandemic. This interview is with Retail Remedy Associate Jo Staton, a straight talking, cost saving legend.

So Jo, why bother with marketing in these Post Covid times ?

The Marketing Department within any retailer is often the highest cost P&L and the obvious target when the proverbial hits the fan.  It is easy to say cut the Marketing spend in the current climate but are your competitors doing the same?  How is your marketing going to stand up against them to get the customers in your stores rather than theirs?  For me, it is about making it work smarter not harder, if anything now is a time to increase the marketing spend and look to state the case for customers safely selecting you.

What would you be doing now from a cost perspective?

From an operational perspective you look at all of the costs, in these Post Covid times even more so, especially the ones that are supposedly “fixed”.  When I go into businesses to look at Marketing costs specifically, I often get told something similar to “we have to pay that”, Why? “because we always have”… isn’t an answer.  I would look at the following:

  • Identify the true fixed costs, not just what you have always paid and re-evaluate your Marketing spend including what is remaining for 2020 and for 2021 planning.
  • Ask your team to reduce the budget by 10%, 30%, 50% and detail what would be sacrificed accordingly. Doing it this way serves to establish the core of the function and highlights what might be optional.
  • Ensure your plan and therefore your budget are factoring in the latest customer insight, this is your best source of keeping ahead of the curve.
  • Recognise the agencies that have supported you and brought new, innovative ideas throughout this significantly difficult time. Have they been a true partner, or do they just want their invoice paid?
  • Ensure your contracts are fair to both parties but work for you, they can be altered and have detailed KPI’s on both sides.

So, is it just about cutting costs then?

Obviously, it is more often than not about costs, but it is also about ways of working and operational simplicity.  How do you get from A to B in the smartest, most cost efficient way possible.  Where are the baton passes between Marketing and the other areas of the business, is there any duplication? Have you looked for it?  Critical Path management is key but often forgotten as the day job just has to be done. You have to ask yourself if every department is thinking about the broader team and how they deal with these handovers in Post Covid times. Chart the critical path out, eradicate duplication and focus on efficiency.