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By Ralph Robinson, Head of Retail & Consumer Markets, BJSS
Boris' Saturday evening announcement shocked UK retailers, especially the large non-food players, who took nearly a third of their sales in last year's 'golden quarter'. 2019's Black Friday alone was estimated to be worth just under £9bn. This year it will take place during a lockdown where the doors of non-essential retailers will have long been forced shut. Whilst UK law is following a justifiable EU trend, shoppers spend more on Black Friday in the UK than in any other EU country. This leaves most retailers highly vulnerable, especially those lacking e-commerce capabilities. Yet 2020 highlighted how retail can adapt, and we hope to see even more innovation driven by the new measures in the coming weeks.
In this article, we explore three immediate actions retailers can take to mitigate some of the risks that the second lockdown presents.
Throw out the rule book on innovation governance
The March 2020 lockdown taught us that retail can surprise us by reducing bureaucracy and speeding up innovation to adapt to an unexpected and rapidly changing environment. Covid forced retailers to reassess their own internal procedures and how they were slowing down innovation cycles and restricting their ability to react to the market.
Since this realisation, we've seen retailers rapidly introduce new innovations such as; traffic light systems, NHS staff opening hours, Sephora's mobile facial recognition to try on lipstick, care packages for the vulnerable, and importantly for those of us suffering from caffeine withdrawal - Pret's new convenient coffee subscriptions.
Retailers who sped up innovation did so by streamlining sign off procedures reducing the number of stakeholders involved and trusting teams to make more independent decisions. With innovation prototype cycles possible in as little as five days, a ruthless rethink of procedure could give your business the flexibility it needs to gain some ground.
Leverage partnerships for new routes to customers
Retailers have decades of experience at product selection, customer service and pricing. Over the last few decades, the bricks and mortar business model has remained mostly unchanged. However, the level of disruption due to e-commerce, social media, Brexit and Covid is 'unprecedented' (sorry!).
Rather than being a jack of all trades, retailers who have embraced partnerships which complement their weaknesses have accelerated out of the crisis quicker. Co-op expanded its last-mile fulfilment options in partnership with Deliveroo, eBay saw double the usual number of small businesses open accounts to give them a new sales outlet, and new businesses flocked to headless e-commerce solutions like Shopify and Commercetools in their droves.
In times like these, retailers need to consider what their true USPs are and build on these strengths rather than trying to fix every last weakness themselves. Delight customers through your 'special sauce' and let your partner network remedy your areas of weakness. The pandemic has meant that you can probably negotiate a good deal too.
Engage, Entertain and Educate using livestreaming and live video chat
Beyond an innovation culture and partner-driven routes to market, brands also have the opportunity to share their personality and service capability, as well as engage their audience like never before. Following the launch of Instagram and TikTok's payment integration, social media is now much more than a social platform. It is a shop window, without the formalities and stuffiness of the high street. By choosing the right platform, format and influencers to partner with, brands can reinvent themselves overnight.
Tencent's WeChat (China's version of TikTok), Douyin and social commerce app RED all launched livestreaming functionality during the crisis. What's more, the stats prove livestreamed shopping experiences can drive +600% engagement with +10x conversion compared to video product presentations. So it's not surprising that the likes of Nike hosted live workouts during the pandemic by livestreaming on China's WeChat platform and YouTube for its western audiences. The sessions were further promoted using Instagram . Louis Vuitton joined in too. The fashion house introduced a guided-selling-style livestream on RED to promote its SS20 Collection. The session was hosted by a top fashion influencer and featured a celebrity ambassador. P&G's Gilette took a more indirect route. It sponsored John Legend's Twitch performance to raise money for the United Nations Foundation to combat Covid-19.
Even though stores are closed online, live video chat and help have also proven popular. Curry's and The Perfume Shop were the early adopters of this new, personalised virtual customer service route. When unable to meet customers face to face, refocusing your best store staff, and letting them share their passion and knowledge of your products over video can be hugely effective. It provides a way to recreate some of the magic of a shop visit from the comfort of your customers' homes. Your staff can be supported and augmented by advances in AI technology such as facial or voice recognition for sentiment analysis, enabling them to serve customers better, rather than replacing their workload. This will help keep customers engaged by picking up on verbal and non-verbal queues. Armed with this, you can turn a weakness into a strength and incrementally improve your conversion funnel over time, with highly valuable traceable data and KPIs on customer engagement, satisfaction and purchase motivations.
Through short, targeted innovation cycles, pragmatic partnerships and leveraging livestreaming and online video content, retailers can make progress during this lockdown, as many did during the last. There will continue to be casualties as retail adapt to the harsh fluctuations in footfall. Still, those who embrace change can strengthen their business model for the future.
If you'd like to know more about our retail experience in the above, and how we're helping retailers to adapt during Covid, do get in touch. We'd be happy to have a free of charge, no obligation chat.