How retailers can prepare for a new normal
With enforced retail closures having been in place for much of 2020 and continuing into 2021, the retail sector has been forced to re-evaluate its strategies, and digitise operations in a fight for survival. Q5 retail expert Daniel Upward outlines which areas companies will need to concentrate on to best weather the ongoing storm.
The last 12 months have been a nightmare for retailers – especially those with large bricks and mortar presences on the UK high street. As a result of the crash in footfall of shoppers resulting from the Covid-19 lockdowns, there have already been several retail casualties, but with mass vaccination now in progress, the end seems to be in sight. Despite the optimism for a return to some kind of “new normal” before the end of 2021, however, there are many things which retailers will still need to consider in the short and medium term.
According to Daniel Upward, Global lead for Retail & Consumer Goods at Q5 Partners, first and foremost retailers will have to contend with long-term changes to consumer behaviours. Even in the event that the latest wave of the pandemic does recede, he believes shoppers will expect new assurances from stores before they will be willing to return.
Writing for Q5’s website, Upward explained, “The pandemic has no doubt shifted consumer behaviours with many trends that were predicted to take years having occurred in weeks and months. Consumers are spending more time at home and with that e-commerce and online delivery have thrived.
Those that do venture out are now shopping much closer to home, with loyalty displaced in favour of product availability, value and a preference for shopping in stores with clearly visible Covid-19 safety measures. Being able to accurately identify which trends will remain and those that will return will play a crucial role in determining the retailers and brands that come out on top.”
Upward – who has spent his career in retail, having worked with Tesco, Marks & Spencer, Coca Cola, Cadbury’s, House of Fraser and Harrods & Selfridges before heading Q5’s retail practice – also asserted that the pandemic will have far-reaching consequences for procurement. He stated that the pandemic served as a “wake-up call for those with a fragile supply chain,” and prompted retailers across the world to examine every step of their global supply chain.
He added that the momentum of these shifts “will continue well into the next 12 months and with the move to online here to stay,” meaning companies need to seek out ways to make online returns easy whilst minimising their associated costs if they are to remain competitive.
A range of other innovations will also be key for retailers to attract shoppers back. With many physical stores closing, shoppers are unable to try on products before they order them – so in order to minimise the costs incurred by returns, deploying augmented reality can help consumers size up their buys, while also being more engaged with a retailer.
At the same time, retailers who accommodate flexible payments will likely win the favour of many consumers, as widespread redundancies and many more on reduced wages or government subsidised furlough schemes needing to rely on pay-over-time or subscription fees if they are to maintain non-essential purchasing.
Upward concluded, “E-commerce will no doubt lead the way in 2021 but we will eventually see a return to bricks-and-mortar retailing. For those retailers that do survive the pandemic, many will not return to the traditional high street store format. Businesses should take the time to re-evaluate their operating model and re-size their store footprint to compliment the needs of the future online shopper, whilst also making important changes to future store environments and services to give shoppers greater reasons to make a physical interaction.”
Q5 in the pandemic
Founded in 2009, Q5 was established to challenge the traditional business model of the consulting industry. The group thought they could help businesses better respond to the challenges confronting them, with benefits that lasted beyond the four quarters of the financial year, into the fifth quarter, or 'Q5', from which the company derives its name.
During the coronavirus crisis, Q5 has been working to help business and charity leaders chart the course to recovery. This includes partnering with UK charity Ahead Partnership to launch a new pro bono consulting offering to distressed mid-size organisations, amid the current economic turbulence most markets face. Called Pop-up Consulting, the new group offers a one-to-two days of pro bono consulting intervention to entities who would welcome some help, but do not have budget for consulting support.
A statement from Q5 read, “It has been a great thing for Q5 colleagues to be involved in too, keeping team members actively engaged and energised on 'purposeful' work during the lockdown period. It has kept the team motivated, productive and healthy… If you are connected to a smaller business or not-for-profit that might be interested, please get in touch. Please note that due to exceptional demand, these mini-projects are now being scheduled on a first-come-first-served basis.”
