Are you in a Covid Cave or a Covid Chrysalis ?
We are aware that retail is going through some changes, for many this looks like a period of forced and occasionally voluntary hibernation. The decision people make going into that period of reduced activity is to decide how they emerge and what the expectations are for what they will look like when they do.
Our team discussions have highlighted a divergent opinion on what people will be doing during hibernation, with similar businesses doing widely different things to survive. One thing as a team we all agreed with was the need to have a plan on what the future business looks like.
Covid Cave (Bear)
There are some retailers who saw the business fall away from their stores, failed to fully connect to an online buying customer to replace enough sales and as the furlough scheme started to evaporate decided on packing it all in. We have seen these in the press and the resultant shock and depression on the faces of those staff and customers as the brands disappear. Sad yet many needed to work harder on future-proofing the business before lockdown, like a bear going into hibernation with too few calories and fatally not emerging. The real question they need to ask is are they just going to come out of the Covid Cave as a slimmer version of the bear that went in ? Although many, if not the vast majority believe this is the right approach, we feel it is also a missed opportunity for most.
There is another group of retailers who are looking to deliver a step change in the way their business is conducted. In some ways this will manifest itself as a loss of physical space and store closures that have already started and will continue. In others it is the closure of the head offices and the robust tier removal of people structures. All sounds pretty dynamic and a year ago we would have said it is. Now it is less so, you still end up with a skinnier version of the same bear.
In a few socially distanced coffees recently we have spoken to some Chairmen who are looking to see a step change. I understand the point one of them made with us quite strongly. “If you go through all the pain of the restructuring of your business, debt and people and make changes to the portfolio of stores, you want something at the end which is much more than an incremental change” I think we can say this is a vote against the skinny bear.
Change will come as many of the competition will have vanished, sad as this is, the industry is going through a Christmas like no others in modern retail and as such those left will have to work hard to attract shoppers. Some, perhaps a brave few, will have taken a much different view and decided that they need to build on what they had with customers before and add something significant.
Much of this will be in B2B collaboration as new partnerships and both physical and online businesses share space to serve what they believe are cross-over customers. Think Lush getting together with River Island or similar as a fantasy example, or Curry’s suggesting to Tesco that they take over their technology departments.
Other change will be about customer acquisition and ownership ( yes I did say ownership) as brands define their customer experience to be complete from the very start of the potential digital journey to the end of the physical transaction and beyond in customer advocacy. Many suggest they do this now, yet in truth we are still seeking examples here.
If your business is going through some navel gazing at present, have a think about whether you will be just a skinnier bear at the end or emerge as a transformed moth. As much as I have always enjoyed caves, and not been too keen on moths, I know which one I would be choosing now.