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.