Categories
Store closures

COVID-19’s Devastating Impact on Retail Jobs

Last night, I spoke to the BBC about the 12,000 job cuts announced in the UK this week. Retail will certainly not be spared: Harrods, an iconic brand but reliant on international visitors, and Arcadia, a retailer that has quite simply failed to evolve, are collectively cutting 1,000+ jobs. TM Lewin, a brand that has been trading for over a century, is closing all of its shops and focusing exclusively online. Microsoft will be doing similar by shutting virtually all of its stores around the globe. Will 2020 see a reversal of the online-to-offline trend?

Who’s going to be hit worst? Those that failed to adapt pre-crisis of course. We’ll see an acceleration in the demise of mediocre or irrelevant retail. Buckle up, folks. It’s going to get a lot worse before it gets better.

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Categories
Consumer Retail trends Store of the future Technology

When Non-Essential Stores Reopen, Will Shoppers Accept The Friction?

As Britain’s ‘non-essential’ retailers prepare to reopen their doors in the coming weeks, one of the biggest challenges they face will be convincing shoppers to walk through the door. And, no, I don’t just mean from a safety perspective; I’m talking about the additional friction that shoppers will inevitably encounter.

Will customers queue up to enter a department store? Will they want to pop in to a clothing store if they can’t try stuff on? Will they accept less choice on shelves as retailers make space for social distancing measures? If they have picked up a book off the shelf, will they remember to then place it on the special quarantine cart? This might all be worth the hassle – if there was no such thing called the internet.

Don’t get me wrong. Bricks & mortar retailers should get a much-needed initial boost when they reopen. These are uncharted waters, but pent-up demand must be a given when consumers themselves are pent up for months. We are social creatures, and the notion of ‘going shopping’ is inherently a leisure activity. The high street retailers that have thus far survived the so-called ‘retail apocalypse’ are those that focus on all the things shoppers can’t get online – inspiration, discovery, curation, community, experience.

In my latest for Forbes, I explore how this will look in a post-COVID world. Has ‘experiential retail’ finally been relegated to the buzzword archives? Has a pandemic killed the art of browsing? You can read the full article here.

Categories
Consumer Uncategorized

Coronavirus – What Retailers Do Now Will Define Them in the Future

As 21st-century consumers, we’ve gotten used to having the world at our fingertips. Then seemingly overnight, all the stuff we take for granted is in question – access to healthcare; groceries on shelves; the ability to travel, go to school, socialise with friends.

The fear of getting ill, our loved ones getting ill or the uncertainty of it all has led to unprecedented levels of panic buying.

Essentials like hand soap and toilet paper disappeared from shelves and retailers began rationing goods like pasta and tinned vegetables. This weekend, I spent 15 minutes staring at my laptop screen as I waited in a virtual queue to order groceries, only to find the next available slot wasn’t for another week.

This might sound trivial. I am, however, self-isolating because of a cough so I’m even more reliant on online deliveries than normal. I suspect I’m not alone.

Retailers have been remarkable in their response, forgoing any hint of usual competitive behaviour to serve their communities. Staff are on the front line, doing their best to keep shelves stocked and alleviate concerns about potential food shortages. But uncertainty breeds irrational behaviour.

Retailers have therefore had to make some very difficult decisions. Aldi, for example, is limiting shoppers to four items of everything it sells. Ocado, meanwhile, has effectively closed its doors to new customers. Unable to cope with the surge in demand for online groceries, Ocado is exclusively serving existing shoppers – a risky but commendable move.

What retailers do today will define them in the future, whether that’s converting perfume factories to make hand sanitiser like LVMH or turning car parks into coronavirus testing sites like Walmart.

In the UK, Lush was the first high street retailer to take action against the virus, encouraging shoppers to come in and wash their hands without any pressure to make a purchase.

In recent days, there have been numerous examples of retailers putting people before profit. Frozen food retailer Cook is offering customers a free frozen meal to take to an ill or elderly neighbour. Some supermarkets such as Carrefour in France and Iceland in Northern Ireland have begun opening earlier exclusively for the over-70s. To protect its staff and the community, Patagonia was one of the first retailers to shut not only its shops but its ecommerce operations too. Meanwhile, Morrisons will begin paying its small suppliers immediately to help them with cash flow during the outbreak.

Tip of the iceberg

These are unprecedented times. In the coming weeks, as self-isolation becomes more prevalent in a bid to slow the spread of the disease, what might this mean for retail?

First, as we’ve seen in recessions or in fact any period of prolonged uncertainty, consumer behaviour changes instantaneously. We drop right down to the bottom of Maslow’s pyramid, covering our physiological and safety needs.

Major banks have promised relief to consumers by increasing credit limits, waiving fees on missed payments and offering payment holidays on loans and mortgages. Get ready for discretionary consumption to largely shut down. But even without financial constraints, it’s hard to imagine shoppers wanting to splash out on a new jacket or skirt when they might, quite literally, have nowhere to go.

The coronavirus outbreak has had an immediate effect on travel retailers such as WHSmith, which issued a coronavirus-related profit warning; the retailer is bracing for sales at UK airport shops to drop by over a third in March and April. Cineworld, meanwhile, has said the outbreak could ultimately result in the world’s second-largest cinema chain going out of business. This is, unfortunately, just the tip of the iceberg.

However, as consumers prepare to cocoon, perhaps there will be some silver linings. Retailers should be prepared for consumers to swap physical shops for digital storefronts, cinemas for Netflix, restaurants for takeaways and, perhaps for some, the gym for a Peloton-esque experience at home. April is officially National Home Improvement Month – with millions of people stuck indoors there’ll be plenty of opportunities to get those DIY projects done.

Perhaps the supermarkets could offer pre-packed grocery bundles to consumers affected by coronavirus. We’re already seeing new consumer groups trial grocery delivery for the first time. How will online retailers cater to new demographics? Will we see a longer-term shift to frozen food? Electricals retailer AO.com said freezer sales jumped 200% in the first week of March, while Iceland has also seen an uplift in sales as shoppers stock up in case of self-isolation.

Social distancing will require the world to temporarily slow down, but perhaps that in itself is not such a bad thing. In China, CO2 emissions have been around 25% lower than normal over the past month. This could prove to be a meaningful time for reflection, to live a simpler life – enjoying cooking, reading, spending time with immediate family. Trend forecaster Li Edelkoort believes coronavirus will result in a “quarantine of consumption”, allowing humanity to reset its values. Then again, it might just result in a lot of divorces.

Uncertainty may lie ahead, but retailers play a vital role in helping local communities through this crisis.

A version of this article originally appeared on Retail Week.

Categories
Amazon Retail trends Store of the future Technology

Amazon Go Grocery – Learning From Tesco’s Fresh & Easy Failure

Picture this – a radical new grocery concept designed to revolutionize how Americans shop. The store is much smaller than your typical supermarket, around 10,000 square feet and stocking an edited range of just several thousand products. The store doesn’t feature banks of traditional checkouts; instead it’s a heavily automated and efficiency-driven experience. There are no bakeries, butchers, or any of the counter services you’d find in most supermarkets.

Nope, I’m not talking about Amazon’s latest cashierless grocery format, Amazon Go Grocery, which launched in Seattle this week. I’m talking about the now defunct Fresh & Easy, Tesco’s failed attempt to crack the US grocery market.

In my latest piece for Forbes, I explore 3 key learnings for Amazon:

1) Have a clear proposition.

2) Destroy the friction, not the experience.

3) Expansion does not indicate success.

You can read the full article here.

Categories
Retail trends Store of the future Technology

Mindful Consumption, Peak Amazon and the Participation Decade – 8 Retail Predictions for 2020

What’s in store for the retail sector in 2020? First, let’s be clear about what’s not changing. We’ll continue to see a bifurcation of winners and losers as the industry sheds itself of status quo retailers (translation: brace yourself for more doom and gloom). The ubiquitously connected ‘on-my-terms’ shopper is here to stay. We’ll see a continuation of the convergence of physical and digital retail. The race to stamp out friction and inefficiencies will only accelerate, and reinvention of the physical store will remain top of the boardroom agenda.

Now the fun stuff. In my latest piece for Forbes, I’ve highlighted 8 retail predictions for 2020. You can read more here.

Categories
E-commerce Fulfilment Store of the future Technology

Great customer experiences can only be delivered with top-notch operations

The final whitepaper in our series with Red Ant explores how bricks & mortar stores must evolve to become genuine hubs for fulfilment. 

The most successful retailers today are those that view their stores as assets not liabilities. As contradictory as it may sound, they understand that the key to growing e-commerce sales is leveraging their physical infrastructure.

These retailers also recognise that traditional metrics for success are no longer valid in today’s omnichannel world; the future of retail isn’t solely online or in-store but a blend of both channels. A OnePoll survey shows that nearly 40% of shoppers use online and store channels equally.

So, the store estate is actually an asset, but problems arise if they are not fit for their new purpose. As 20% of UK retail sales now take place online, less physical shelf space is required. Instead retailers need to dedicate more space on the shop floor to fulfilment services.

Store fulfilment plus points

When asked what types of experiences they would like when in store, the top three answers from shoppers all related to fulfilment:

  • 48% want simple returns of online purchases
  • 42% want click & collect
  • 35% want to be able to order online while in store when items are out of stock

There’s no denying that the rise in online shopping has come at the expense of physical retail sales, but we can’t overlook the many opportunities it has also created for those retailers willing to evolve.

One of the main draws of click & collect is the ability for customers to ensure product availability before heading in-store, as 40% of shoppers surveyed say that knowing what you want is in stock is a factor in choosing one retailer over another.

Over half (51%) cite not having to wait for deliveries as a reason to shop in store versus online. Customers coming home to the dreaded “sorry we missed you” note adds a lot of friction to an experience that is intended to be anything but.

Holistic customer experience

Click & collect is, therefore, a no-brainer for retailers, and many have been quick to recognise that in-store collection and returns can improve footfall and consequently incremental spend. Countless studies have shown that shoppers often purchase something else once in store and herein lies the opportunity: retailers must engage with shoppers at the point of collection in a bid to cross-sell or upsell based on the items that have been reserved.

Making the most of this, however, depends on equipping store associates with the right technology. The aim should be to establish staff as trusted shopping companions rather than simply someone who gives the customer their order and ticks it off on a list.

The data is there, but retailers need to connect the dots to offer that holistic customer experience.

Download Store of the Future: The Store as a Fulfillment Hub now to get the full picture and read more of Natalie Berg’s expert insights.

Categories
Retail trends

Tesco can’t emulate the success of Amazon Prime with Clubcard Plus

Subscriptions have become the holy grail for retailers as the sector moves away from competing purely on product and increasingly on service. Recurring revenue and driving loyalty with your most important shoppers—what’s not to like?

Tesco has become the latest retailer to jump on the subscription bandwagon. Britain’s biggest supermarket plans to bundle its grocery, mobile and bank offerings under a new scheme called Clubcard Plus. Here’s how it works: shoppers pay a £7.99 monthly fee in exchange for a 10% discount on two big shops in-store; 10% discount on select private label products; double data from Tesco Mobile and a Tesco Bank credit card with no foreign exchange fees abroad.

As lucrative as subscription models might be, they only work if customers see the value in them. Just ask Jeff Bezos. The aim of Amazon Prime, he says, is to provide so much value that shoppers would be “irresponsible” not to join. A scary thought for any competitor.

With Prime, the value is clear—sheer, unrivaled convenience layered with increasingly indispensable entertainment perks. With Clubcard Plus, the value exchange is a bit murkier. Firstly, if customers want low prices, they’ll head to Aldi or Lidl. They don’t need to fork over £8 a month and jump through a bunch of hoops.

Note: this is an excerpt. Continue reading Natalie’s full article on Forbes.

Categories
E-commerce Fulfilment Store of the future

Next gets that the future of e-commerce is stores

To be relevant in retail today, you have to acknowledge that stores are no longer purely about selling. I believe most high street retailers are on board with this concept, but few are comfortable implementing it. And that’s because for decades, we as an industry have obsessed over metrics such as like-for-like sales growth whereby success is confined to a shop’s four walls. But it’s 2019 and we all know that’s not reflective of actual consumer behaviour.

Next is one of the retailers that gets it. They have hundreds of stores with a presence on most high streets – yet the bulk of their sales take place online. They’ve accepted that stores are never going be as productive as they were before the advent of e-commerce, and while there is certainly a need to redress the balance through select closures there is an opportunity to redefine the very purpose of bricks & mortar stores. 

Next understands that, as contradictory as it might sound, shops now play a critical role in growing online sales. If you don’t believe me, just look at the tsunami of online retailers now opening physical stores. Having a bricks & mortar presence means online retailers can offer shoppers additional choice in fulfilment while reducing customer acquisition costs, generating that elusive halo effect.

Customers want to shop on their terms, they want the best of both physical and digital worlds. They want to marry the ease of buying online with the convenience of collecting or returning items instore. It’s no surprise that half of Next’s online orders are collected instore, while stores also process over 80% of e-commerce returns.

Another example of online and offline working in harmony at Next is through same-day click & collect. Shoppers can now view and reserve local store inventory for collection in under one hour. This might not be a gamechanger (I can’t imagine many Next orders are that time-sensitive) but it shows how retailers can leverage their stores in a digital era.

Lastly, Next is rethinking the role of its stores by doing something most wouldn’t dream of – teaming up with Amazon. Six months ago, Next became Amazon’s UK partner for its launch of Counter, a service that lets shoppers collect their Amazon parcels from staffed pick-up points in Next stores. Again, this is about the following the customer: according to Mintel, 90% of UK shoppers use Amazon and I would estimate that Amazon accounts for just under half of e-commerce sales in the UK. The partnership is a win-in. No one can do fast delivery like Amazon, but often it’s predictability over speed that consumers are after and this is where stores come in. Meanwhile, Next benefits from the additional footfall and opportunity for incremental spend.

Retailers can take inspiration from Next’s strategy, understanding that stores are an essential component to facilitating e-commerce sales. We have to stop treating e-commerce as the death knell for the high street. We have to ditch those metrics that pigeonhole retailers and start valuing our stores based on their ability to enable digital purchases.

This article originally appeared on Retail Week.

Categories
Discount

What Aldi’s expansion plans tell us about the current state of retail

I can count on one hand the number of UK retailers that can still get away with aggressive physical store expansion while broadly shunning e-commerce – Primark, Aldi and… yep, that’s it.

At a time when most retailers are re-evaluating portfolios and shuttering stores, Aldi has announced plans to open hundreds of new stores, including doubling its presence in London. By 2025, Aldi is expected to trade from 1,200 UK shops, up from just 840 today. The space race isn’t over just yet.

Note: this is an excerpt. Continue reading Natalie’s full article on Forbes.

Categories
Store of the future Technology

The case for seamless, not soulless, experiences

In the second of a three-part whitepaper series from Red Ant and NBK Retail, we explore the rise of the experiential store, why retailers must adopt an ‘admission fee’ mentality, and how customer experience is fast becoming the new currency in retail.

Despite the high-profile casualties we’ve seen on the high street, it’s clear that shoppers still crave the experience of visiting stores. But the service they receive in store must surpass what they would find online. We’re currently in a moment of transition, where the physical store is shifting from transactional to experiential.

Kill the friction, not the experience

Today, there’s still a sense of novelty when shoppers encounter a frictionless store experience, but in the future, digitally enabled store experiences will become the norm.

The option to bypass the checkout, for example, will simply become an expectation. This will be ‘basic hygiene’ that retailers must follow to remain relevant to their customers.

While it’s essential to invest in the right technology to facilitate a seamless in-store experience, retailers must also ensure ‘seamless’ doesn’t translate as ‘soulless’.

Retailers are experimenting with a plethora of technologies to enhance their environments and to finally bring the physical store into the 21st century. However, they must guarantee that it’s friction that they’re killing, and not the experience.

Democratising the white glove service

Just as the role of the store must evolve, so must the role of the store associate. They must be able to demonstrate genuine expertise, offering advice and personal recommendations to become a ‘trusted shopping companion’.

“29% of consumers said they would spend more money if a sales associate recommended something to complement their purchase”

In the future, what was once considered a VIP service will be democratised as more mainstream retailers recognise the benefits of providing concierge-level service.

John Lewis has already begun sending staff to theatrical training to improve customer experience, and the department store chain is also giving employees a voice by allowing them to directly engage on social media.

Retailers must aim to provide that white glove service because customer-led clienteling pays. Being able to provide a one-to-one, face-to-face personalised service has the power to increase sales and drive loyalty.

In our own OnePoll survey, 27% of consumers said that having an expert to talk to would make going into a shop worth their while.

And 29% of respondents agreed that they would spend more money if a sales associate recommended something to complement their purchase (based on what they had previously bought or had on their wish list).

The value of human interaction

At the end of the day, the most important rule in retail is being relevant to your customers.

Technology can help retailers augment the human touch, allowing them to adapt and thrive in the digital world. Today’s consumers may be hyper-informed and accustomed to shopping on their terms, but they still value human interaction – particularly when it comes to advice and inspiration.

“Employees are retailers’ most valuable resource”

With so much change afoot, it may be overwhelming for retailers to know where exactly to begin but they should start with their most valuable resource – their employees.

Retailers can democratise the VIP experience by equipping staff with the technology they need to offer specialist, personalised advice and information.

Consumers are no longer tolerant of mediocre service, so retailers must raise their game if they want to differentiate from online rivals and survive in this digital era. Clienteling and consultancy should not be beyond the reach of any retailer that wants to build an experience.

Download Store of the Future: The Experiential Store now to get the full picture.