Shops are reopening but it’s still anything bar business as normal in town centres and other retail destinations. Industry experts share their views on how to encourage an enthusiastic resumption of retail therapy among consumers.
Catherine Shuttleworth, chief executive, Savvy
What’s desperately needed is a joined up plan where government departments work together in the broadest possible interests of commerce in the UK.
We are increasingly seeing slightly different approaches emerging in Scotland, Wales and England but essentially I believe there are three major challenges that need to be joined together to get the nation moving but manage the ongoing Covid-19 risk.
We need a macroeconomic strategy. For retail sales to increase we all need to have money to spend, which can only be achieved through preserving employment. The medium term impact of furlough will only be fully understood in October at the start of retail’s golden quarter – how many furloughed workers will find that they are not returning to work and will then be facing a Christmas where spending will be severely restricted?
The government will have to come up with support for employers to keep employees on the payroll. This of course can’t keep coming for free, and I believe that this support can only be achieved with tax interventions, possibly around corporation tax breaks and a lowering of VAT to stimulate spending.
[All actions] will be a complete waste of time if we haven’t got a robust plan to send children back to school
But all of this will be a complete waste of time if we haven’t got a robust plan to send children back to school.
Notwithstanding the academic and mental health impacts on our young people, we need to get parents back to work and children have to be in education to do that. It’s all part of a virtuous circle and while governments have historically worked on a department by department basis, this just won’t work any more and a joined up plan is needed.
Above all we have to ensure that that plan allows us to keep the R rate low; a second lockdown in the golden quarter could be a disaster for UK retail from which many businesses would never recover.
Ian Shepherd, author, Reinventing Retail
As if wrestling with lockdown wasn’t enough, retailers are about to reopen to a trading environment worse than most will have seen in their careers.
The root cause is obvious – a deep recession due to Covid-19. What retailers will need more than anything else is government action to ensure a rapid economic recovery.
Beyond that, though, what can the sector do to help itself?
As far as possible, consumers need to feel that shopping is safe and enjoyable. That will need retailers to work with local authorities and shopping centre managers to get the basics right – one-way routes, safe parking options and regularly cleaned high streets, in addition to well implemented processes in stores themselves.
It’s time for an old-fashioned solution – local marketing
After those basics are in place, it will be time for an old-fashioned solution – local marketing. Themed events, coordinated sales and all of the other tried and tested tools of ‘place making’ will help to bring consumers back out to stores.
There are terrific case studies on this kind of programme already, but post-pandemic retail will need more. Critically, a limitation that town centre teams often report is branches of national retail chains not being allowed to take part in local events because of ‘head office rules’.
I’d therefore suggest that the biggest contribution many head offices can make to kick-starting the retail economy would be getting out of the way of their store teams, empowering them to work, town by town, to win back the hearts of consumers.
Michael Lieblich, retail analyst
As Napoleon said, we’re a nation of shopkeepers, but we’re also a nation that was suffering severe physical withdrawal symptoms from retail therapy.
In an ideal world the government could credit every consumer with £300…to help stimulate spend
In an ideal world the government could credit every consumer with £300 within the next two weeks to help put money in shoppers’ accounts and help stimulate spend. That could be done through the DWP and HMRC.
An alternative would be to embrace programmes such as the American Express Shop Small Scheme, which starts today and runs until September 13, and gives shoppers £5 off each purchase of £10 or more at local shops up to a maximum of £50 per card member.
This promotion, which usually run for two weeks in December, has been brought forward because of how the high street is suffering.
There’s no reason why Mastercard and Visa couldn’t follow suit, which would capture 99% of UK cardholders, and make sure that the funds go into retailers’ accounts. Waiting for a VAT cut is too little, too late. Shielded shoppers would be given direct credits as this is the only safe way of supporting them.
Karl McKeever, managing director, Visual Thinking
Lockdown has given people time to reflect and consider what they want to change for the better. There is a growing consciousness of the benefits of working differently, and a desire to live in a kinder, fairer and better world.
To minimise the future spread of the virus, returning shoppers will be encouraged to use card payment in stores. For years, store and credit card providers have earned big money from tempting shoppers with easy payment, deferred charging and ‘friendly terms’.
But many of these accounts come with eye watering APR interest rates, which to me seems both unjust and unfair. Beyond the slick branding and advertising lurk onerous dangers for increasing personal debt.
This could be the moment that quickens the death of cash, but could stimulate a fairer, more consumer-friendly approach to using retail credit services
I propose the government introduces a year-long levy to skim any excessive profits made by providers charging excessive interest rates – with the money raised diverted into social projects, charities and green initiatives that will ‘do good’ for society and our planet.
Using cards is ‘not a choice’ in many stores, and consumers should not be penalised, or harmed, for doing so. This could be the moment that quickens the death of cash, but could stimulate a fairer, more consumer-friendly approach to using retail credit services.
Lara Marrero, global retail lead, Gensler
I joined the throng of shoppers returning to the high street last week and found myself simultaneously conducting and participating in a consumer anthropology experiment. While shops had new procedures clearly in place, I was surprised to see the majority of consumers acknowledging them, then swiftly ignoring them and reverting to the way they shopped before.
So many shoppers continued on the consumer journey they were used to, ignoring one-way signs and not social distancing on escalators.
Most notable to me was the sheer number of people who returned to store, certainly on the Monday.
Sustained footfall will depend on whether retailers successfully deliver these early shoppers with an experience that makes them want to come back
The popularity of online retail skyrocketed for obvious reasons during lockdown, however online retail is just one method of satisfying a consumer’s needs.
The willingness of people to re-engage with shops is testament to their desire to create meaningful connections with a brand.
That said, sustained footfall will depend on whether retailers successfully deliver these early shoppers with an experience that makes them want to come back again. Brands must ask themselves if they are providing customers with a purpose beyond purchasing and returning, and if they are able to provide an engaging experience despite the safety protocols.
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