The idea of togetherness is one that has shone through in countless ways amid the coronavirus crisis.

Families, communities and colleagues across the UK have formed bonds closer than ever to support each other through the health emergency.

Increasingly, retailers are doing likewise, seeking third-party partnerships with other brands and businesses – new relationships they believe will help them emerge stronger from the ongoing pandemic.

Just this morning, two of Britain’s biggest grocers unveiled their latest partnerships.

As Retail Week revealed, Tesco will host AO.com’s first physical shop-in-shops in five of the grocer’s largest supermarkets.

Meanwhile, Asda will hand over the toy section at a handful of its supermarkets to The Entertainer, giving the specialist free rein over ranging, merchandising and pricing.

Such deals increasingly make sense as retail adapts to the widespread impact of the coronavirus pandemic. As Asda says, it has seen “a shift in customer behaviour” during the outbreak, resulting in “an increasing number of shoppers looking to complete multiple shopping missions on a single trip” – and it is a trend retailers must react to.

“In AO, Tesco is teaming up with a retailer that can offer expertise, keen prices and fulfilment prowess to the grocer’s existing customers in a category in which it had previously struggled to compete”

For the past few years, Tesco has been pulling back from the electricals category, particularly when it comes to larger white goods. It has stopped selling bulky items such as fridges, dishwashers and washing machines in stores, and in 2018 axed its Tesco Direct website dedicated to general merchandise. But demand for such products remains and, in fact, increased during the early stages of lockdown.

In AO, Tesco is teaming up with a retailer that can offer expertise, keen prices and fulfilment prowess to the grocer’s existing customers in a category in which it had previously struggled to compete.

The AO shop-in-shops will also offer shoppers another reason to visit, helping Tesco enhance the ‘one-stop shop’ reputation the UK’s large supermarkets are increasingly trying to carve out for themselves.

Meanwhile, in Tesco AO has secured a highly experienced bricks-and-mortar partner from which it can learn tricks of the trade on a daily basis, while also putting itself in front of the supermarket giant’s huge customer base in a capital-light manner.

New ways of working

Both retailers have been hugely successful in their own right during lockdown – Tesco’s pre-tax profit jumped 29% to £551m in the 26 weeks to August 29, while AO’s sales surged 63% in the 16 weeks to July 31. Together, however, there is the potential for them to grow even stronger – and it’s that mindset that all retailers have to embrace.

In the past, it might have been seen as a sign of weakness to seek help from third-party retailers, brands, or tech suppliers.

Indeed, some businesses are still trying to reshape the somewhat insular cultures they have been historically built upon, shunning external insight and ideas in favour of always doing things ‘their way’.

Those schools of thought and ways of working are becoming increasingly outdated and have to change if retailers are to adapt to the post-pandemic future and embrace some of the opportunities the new trading realities will present.

“Even the largest and most successful retailers in the world are opening their minds, embracing and harnessing other companies’ expertise”

Even the largest and most successful retailers in the world are opening their minds to that future, embracing and harnessing other companies’ expertise, rather than attempting to take them on at games they cannot win without huge capital and capacity investments.

Take Walmart as a prime example. The biggest bricks-and-mortar retailer on the planet refuses to assume that because something worked for the business yesterday it will yield the same results tomorrow.

Despite its storied history, it is not too proud to admit when it cannot do things alone and to seek help from outside the organisation instead.

In the past year Bentonville has opened its doors to Instacart to offer a same-day delivery service in parts of California and Oklahoma; to Shopify in a bid to expand its marketplace proposition; and to Microsoft, with whom it had an existing tech partnership, to join forces on a bid for social media platform TikTok.

As a result, Walmart is facing into the challenges being posed by an increasingly digital future and the onslaught of rivals such as Amazon, and also seizing opportunities to grow its customer base and appeal to younger shoppers.

Tesco, Asda and Walmart are just three examples of major retailers leveraging the power of the partnership. In a post-pandemic world, all retailers should be looking for similar opportunities.

Retail Horizon 2021

Partnerships are one of the five strategic priorities for businesses that Retail Week has identified in its upcoming advisory report, Retail Horizon 2021 – Winning Strategies to Navigate Disruption.

The report, compiled by our team of analysts and insight experts, aims to support retailers and brands in growing their business by assessing the major external influences shaping consumer mindsets and market trends – society, technology, economy, policy, industry and culture.

Retail Horizon 2021 will give businesses the confidence to make key strategic decisions about their markets, customers and resources going into next year and beyond.

Keep an eye on retail-week.com for the launch of Retail Horizon 2021 in November.