Since the government forced all ‘non-essential’ shops to close last Monday, many retailers have found themselves at something of an impasse.

  • Asos boss Nick Beighton stands by decision to keep fashion etailer open
  • Moss Bross CEO Brian Brick warns companies that are not seen to be putting staff and customer safety first will be judged by consumers
  • “You have to keep an eye on the balance of public opinion” but customers will still want ‘non-essentials’, says Rita Clifton

Should they, as retailers of items deemed not to be essential, continue to operate online, or should they shut their digital shops as well as their physical ones?

It is a quandary that so far has divided many operators. Retailers including Net-a-Porter, Next and TK Maxx have all chosen to temporarily close their online operations in a bid to protect staff working in their distribution centres and delivery networks.

Warehouse worker

Online retailers have brought in extra safeguards for their warehouse staff

However, others like The Entertainer have insisted they have the relevant safety measures in place, including extensive cleaning and disinfecting between shifts, floor markers to enable social distancing, and only using every other picking station to keep workers a safe distance apart.

Asos is another standing its ground and has defiantly hit back at accusations from trade union GMB that it should cease trading online over safety concerns. The etailer’s chief executive Nick Beighton even took to Twitter over the weekend to defend its position.

Beighton said: “As directed by the government, we, along with other online retailers, are ensuring we are striking the right balance between keeping our warehouse operational, for the good of our employees and the wider economy, and maintaining the health and safety of staff, which is always our number one priority.”

But continuing to trade online as a retailer selling non-essential items is becoming an increasingly contentious issue – and one that is dividing the non-food sector.

Moss Bros shut down its ecommerce platform last week, a decision its board made shortly after Boris Johnson ordered shops to close on March 23.

The menswear chain’s chief executive Brian Brick tells Retail Week: “We have a social responsibility and this virus is highly contagious. When they showed just how contagious it is, we took the decision that we didn’t particularly want to put our people at risk.”

Brick concedes that the decision to cease trading online was also, to an extent, commercially motivated with sales expected to fall during a spring and summer without weddings and proms. But not all ecommerce players will be in that position – other non-food operators are experiencing strong sales growth online and do not believe they should be expected to close.

Communication is king

One senior retailer, whose business sells clothing and other general merchandise ranges online, says official advice has been clear – the government does not want an online shutdown because, crucially, ecommerce availability encourages people to stay at home. She explains that demand has been high for products such as underwear, bedding and babywear, which are central to everyday life and help families during the lockdown.

She says additional safeguards have been put in place for its warehouse staff, including the reformatting of canteens, changes to shift handover procedures and financial guarantees for those who might need to self-isolate, in addition to new social distancing measures.

The biggest challenge has been communication, in attempting to reassure staff that their health and the welfare of their families will not be compromised by going to work. “The big challenge is that this affects everybody on a personal level,” she says, “so there has been continuous communication – the comms is so important.”

“You have to keep an eye on the balance of public opinion, but some customers might feel that getting non-essential items is really important for their mental wellbeing in this time”

Rita Clifton, Brandcap

Communicating that message not just to employees, but to the public, is becoming increasingly vital, with retailers’ reputations, as well as livelihoods, on the line.

The chief executive of one general merchandise retailer hoped the government would speak out in support of online retail, despite the likes of Next, TK Maxx and River Island opting to close their ecommerce businesses. He suggests maintaining a presence online is vital for the economy and workers across the UK. “Fashion was already steeply down before this, but we are up online. If online is closed, all it will mean is all those delivery drivers queuing at food banks,” he warns. 

Brick believes that, regardless of whether or not other businesses ultimately follow Moss Bros’ suit and stop trading online, companies that are not seen to be putting their staff and customer safety first will be judged by consumers.

“It didn’t affect our decision, but public opinion will come to bear and will be a factor for people as this gets worse and the death toll goes up,” Brick says. “Public opinion will be important, but everyone has to do as they see fit.”

Reputation building

As has been clear in recent days from faux-pas and subsequent U-turns from the likes of Frasers Group’s Mike Ashley and Wetherspoon’s Tim Martin, the cost for being seen to put profits before people is high in the court of public opinion.

Frasers had lobbied the government to keep its Sports Direct stores open during the lockdown, before a backlash in the press and on social media prompted Ashley to climb down and issue a public apology to his staff. Martin eventually agreed to pay all of his staff up to 80% of their wages while his pubs are closed, having been vilified for initially telling his employees to find other jobs with grocery retailers during the pandemic.

Mike Ashley Poland Street 2

Mike Ashley changed his position on keeping Sports Direct stores open

At a time when consumers are turning on businesses that are not being seen to do the right thing, should retailers consider shutting down their online operations purely to protect their brands? 

“It’s a really difficult question,” says former Tesco supply chain director Neil Ashworth, now the chair of retail fulfilment firm Selazar. “The non-essential retailer will be incurring significant costs while they’re not driving revenue, so there’s a big financial challenge under these circumstances.

“In an ideal world and position, the retailer would like to do the right thing by their employees, but it’s not always a possibility.

“On the flip side, we are seeing some retailers finding alternative uses for their supply chain, for example non-food helping the inundated food retailers, collaborating in a time of national need.

“This, in turn, has a positive bearing on the reputation of such organisations in the public eye, for corporate investors, and also for their employees.”

ReputationInc director Tom Wyatt believes that a basic principle of retail is maintaining a relationship with the customer, but says that, in times crisis, this can take numerous forms.

“There are good business reasons for both remaining open or ceasing operations entirely – and a retailer can be just as effective in protecting its reputation by announcing it is nobly closing the business, as well as announcing that they are nobly continuing to help staff and customers, keeping them as safe as possible whilst running the business,” he says.

Both Ashworth and Wyatt agree that, if companies are to stay open for business, they must build a reputation – both internally and externally – as a safe retailer.

“It’s a bit like advertising,” says Wyatt. “Using signposts, stickers, emails – anything to make people aware that you’re still in business and you’re doing things safely, whether in-store or online.”

Ashworth adds that retailers, particularly online operators, need to increasingly become a public information service, educating customers on the new normal for operations, delivery protocols and distancing in warehouses.

“Most team members will work alone in a certain picking zone, operating powered equipment. There was a degree of distance before the coronavirus rules came into place,” Ashworth explains – a point sometimes lost in the war of words between retailers and unions. 

“The key challenges will be briefing teams before shifts, as this would ordinarily be done in a group, and keeping people apart in break rooms and canteens. However, with some careful planning and common sense, warehouse staff can be kept safe,” he insists.

In the longer term, Wyatt believes the retailers that come out the other side of the pandemic will be those that “did the right thing” during the crisis.

“People are very aware of those companies who will try to profit from the crisis, and no company wants to be known as the one who tried to rob their staff or take advantage of the situation,” says Wyatt. 

Finding the balance

Brandcap chair Rita Clifton echoes this view. “This is a time for business survival, but also brand equity – and when I say brand equity I don’t mean spending money on campaigns, but proactively doing things that really protects, and hopefully enhances, how people feel about your brand overall,” she says. “It may not be much to do with your core business, but in the current climate that’s almost the point.”

H&M, LVMH and Ralph Lauren are just a few of the big businesses dealing in ‘non-essential’ products that have given over areas of their operations to aid in the fight against coronavirus, be that through mass-producing hand sanitiser or protective medical equipment for frontline hospital staff.

LVMH coronavirus

LVMH is using its fragrance factories to create hand sanitisier in France

However, Clifton argues that businesses should not be castigated for continuing to operate online since their presence provides a sense of normalcy in extraordinary times.

“You have to keep an eye on the balance of public opinion, but some customers might feel that getting non-essential items is really important for their mental wellbeing in this time,” Clifton explains.

“As human beings, we tend to need more than the basic essentials of life. People are suffering from mental health issues which are already exacerbated by financial and social constraints, so does wholesale closing non-essential businesses online aggravate that?”

She says that the ambiguity of government guidance in ordering shops to shut but allowing online operations to stay open has put many retailers in a difficult position.

“Retail bosses have to balance the government guidelines, public opinion and staff wishes and welfare in what is a rapidly evolving situation.

“The government has perhaps not been as clear on this front as it could be, which is putting the burden on company leaders. This is very hard because any company leader or CEO wants to make sure their business will survive and hopefully thrive the other side of this, so do you keep on operating, or freeze and then mortgage your future?

“These are very hard decisions, and the problem is that any grey area is where the greatest pressure comes on executive teams. Without clear guidance, you have to play it by ear and make sure you are listening to your stakeholders, the Government and your customers.”

That is a tricky tightrope to walk for many retailers – particularly when the costs of getting it wrong are higher than ever.

As the UK lockdown beds in, many retail businesses will need to decide whether staying open in a time of crisis is a move that will empower their customers and staff in uncertain times, or risk tarnishing their brand reputation for good. Those who thrive long after coronavirus will be those which make it through the pandemic not just with their businesses, but with their reputations, firmly intact.