In the space of a few months, Britain and its retailers have been plunged into a crisis the scale of which few would ever have imagined.

Action points

  • Retailers should assess how new technology can help them trade more effectively – especially when it can bridge the gap between the traditional strengths of stores, such as providing advice, and lockdown conditions and their aftermath
  • Retailers have increasingly recognised that a changing landscape brings challenges outside their established areas of expertise – now is the time to identify or accelerate such partnerships.
  • Seize the moment to break silos: people are working in new ways, often remotely, using technology such as Microsoft Teams, bringing the chance to break down old barriers and work in a more agile way.
  • Ensure good initiatives and changes stick – spend time working out how newfound agility can be maintained and built upon

Marks & Spencer chair Archie Norman made use of a famous saying in the retailer’s annual report last week – “never let a good crisis go to waste”. During the pandemic, retailers have put those words into practice.

The coronavirus outbreak may have left head offices deserted, stores put into hibernation en masse and customers staying at home under lockdown restrictions unprecedented in peacetime, but retailers have reacted with an agility that runs through every aspect of their businesses.

HQ staff adopted new technologies, such as Zoom or Google Hangouts, to work virtually with other team members and shops – the ones still open, anyway – became overnight centres of crisis management, and their managers crash-course experts in the ‘new normal’ of screens and social distancing.

New ways of selling and building relationships with customers were deployed, factories retooled to manufacture PPE, ‘non-essential’ retailers’ delivery fleets put at the disposal of the NHS, distribution networks reconfigured to cope with a surge in online demand, and warehouses reset to ensure frightened workers’ health and safety.

Adversity has been the mother of invention and some of the changes made are likely to be evident long after the pandemic subsides in how retailers think and act.

The benefits of virtual technology

At a time when human contact must be minimised, technology has enabled retailers to serve their customers in new ways. Often it has helped bridge the chasm opened between salesperson and shopper as stores have been shuttered in their tens of thousands.

shoplive

Dixons Carphone launched ShopLive to make up for closed stores in lockdown

Any retailer selling product that relies upon good advice rather than simple transaction – whether luxury purchases, technology or even style and cosmetics tips – stands to gain from opening virtual channels.

Dixons Carphone has launched ShopLive, enabling consumers to access its product specialists for guidance and demonstrations, recreating an in-store experience in a digital environment.

Chief executive Alex Baldock tells Retail Week: “Sometimes crisis spurs innovation… we asked ourselves ’what can we do to enhance the online customer’s experience in a way that makes the most of our strengths and helps the customer most?’”

Luxury goods retailers such as Burberry have led the way on virtual selling, helped by their experience in China where online is more advanced. They were able to adapt their services to advise and sell using social media such as WeChat or Instagram

Watches of Switzerland, for instance, pivoted online. The upscale retailer started selling brands online that had previously only been available in stores and made use of ‘clienteling’ technology that facilitates the strengths of knowledgeable staff and their relationships with customers to win sales that would otherwise have been lost.

Boots, whose beauty business has been affected because shoppers can no longer test cosmetics, has taken a similar tack. The health and beauty group, which introduced an online GP and pharmacy consultation service in April, will offer 15-minute video consultations with No. 7 advisers when it reopens beauty counters this month.

Boots social distance beauty hall

Boots is reopening beauty counters this month

OC&C Strategy Consultants retail and leisure specialist Sohini Pramanick says: “In the same way as you and I have become used to working from home, retailers have pushed themselves to be more virtual, and that’s a legitimate way of serving customers.”

The need for such customer options will not go away. She cautions: “When shops reopen, the amount of restrictions still in place begs the question whether the experience will be any better than virtually.”

Technology has also been utilised behind the scenes in retail, particularly to communicate with employees and suppliers. For example, Next’s buyers have deployed video communications to work with suppliers and Marks & Spencer’s office employees have successfully used Microsoft Teams.

“We’ve seen the breaking of silos and more flexibility,” says PwC consumer markets leader Lisa Hooker of the impact of the pandemic.

Getting the basics right

Retailers have also taken the opportunity to ensure the basics are working as well as possible online. At M&S, which was already pursuing a digital-first strategy, website improvements were accelerated.

During the lockdown, M&S has established a dedicated SEO working party to improve search rankings, and position the online channel “to reflect rapidly changing customer behaviours, including trading our site with refreshed architecture focused on the goods most searched for by customers such as kidswear, bedding, towels, loungewear”.

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Marks & Spencer has accelerated website improvements

Adoption and better use of technology are likely to continue after the pandemic as retail faces a potentially lengthy recovery period. Sarah McVittie, co-founder of fashion prediction platform Dressipi, which counts retailers such as River Island and John Lewis among its clients, says retailers will benefit from better use of data.

Many retailers feel they are drowning in data, but McVittie says it can enable agility when it can be used practically and quickly, such as through visualisation. Dressipi is one of the beneficiaries from a £40m fund set up by government-sponsored Innovate UK to fast-track innovations born out of the crisis.

Such technology will enable retailers to move swiftly in changing conditions. As shoppers switch online overnight and continue to buy from ecommerce sites, for instance, the differences and similarities between existing and new customers can be identified, new customers’ lifetime value can be developed and promotions better targeted.

Such insights are particularly useful in circumstances like the present, when employees may be juggling responsibilities and covering for furloughed colleagues. “Where it’s helpful is for people who’ve got a lot on their plate,” says McVittie.

“What’s interesting about this period is that retailers are becoming more open. What’s important in fashion is combining data technology and the creativity that makes fashion unique,” she says.

Grocery innovations

Partnerships were already becoming a prominent feature of retail as businesses acknowledged that the demands of a changing consumer presented challenges which lay beyond their traditional strengths and expertise.

They have proceeded at pace since lockdown. Morrisons, for example, extended its partnership with etail titan Amazon to provide same-day delivery from about 40 stores, serving the UK’s biggest cities. Morrisons also ramped up delivery capacity through Deliveroo, becoming available to a quarter of UK households.

Deliveroo

Deliveroo has formed partnerships with several retailers during lockdown

Unlike some partnerships in the past, the Deliveroo link-up – and others between the fulfilment specialist and food retailers – was a two-way street. Deliveroo itself was suffering as its established restaurant partners were put under pressure by lockdown rules.

The emergency has also brought a variety of product and supply initiatives as food retailers, in particular, moved nimbly to serve shoppers better and safeguard operations.

Perhaps the most agile product response has been the introduction of pre-selected boxes of goods, pioneered by Morrisons and offered by retailers such as M&S and Aldi.

Boxes were developed first as an option for key workers and vulnerable and shielding customers – the one launched by Morrisons at the beginning of April was a click-and-collect service for NHS staff. They quickly moved into the mainstream and the grocer has since launched special boxes catering for special diets or special occasions ranging from VE Day celebrations to Ramadan.

Similarly, M&S began with boxes of essential foods and moved on to barbecue specials and the Indian Takeaway Big Night Box as their wider relevance became clear.

Such boxes, says Hooker, also have the advantage of enabling retailers to better manage flow of stock, including selling through stock which may be in very plentiful supply.

Inside the supply chain, there has also been action. FMCG businesses launched their own direct-to-consumer arms to ensure customers did not miss out as stockpiling left shelves bare in the early days of the outbreak – ‘Heinz to Home’ is one example.

The big grocers also typically stepped up payment terms to suppliers, to help them through the dark days that might have pushed some to the wall. As lockdown loomed, Morrisons started immediate payment to smaller suppliers.

Hooker thinks that in the aftermath of the pandemic, there may be deals as retailers or other food groups “buy their supply chain” in order to guarantee its future security.

Keeping the best of change

The pandemic has brought devastation in its wake, but it has also forced retailers to reassess their fitness for purpose and to move at lightning-speed to adapt.

Whereas in the past there may have been reluctance about change or inertia about transformation, the crisis has swept such attitudes away and led to new ways of thinking and acting.

That openness to change, and experience of how quickly change can be made to happen, is something precious and worth keeping hold of when more normal conditions resume.

It could happen in all sorts of ways. Hooker points, for instance, to the speed with which grocers were able to recruit extra staff as they leapt into action to feed the nation. One grocer told her that their business had done in a day what would have taken weeks previously when more people were hired for peak trading season.

“We are determined to make our ways of working permanent and accelerate the aspects of our transformation necessary to thrive in a new consumer landscape”

Archie Norman, Marks & Spencer

New ways of working can bring further benefits, she believes, as retailers and other big-hiring consumer businesses such as hospitality groups face an environment in which the immigrant staff on which they have often relied are likely to be available in far fewer numbers.

The pandemic progressed at breakneck speed but prompted new ways of doing things. Despite current pressures, now is the time when retail leaders should think about how they maintain this new, agile mindset and the commercial benefits of doing so.

Pramanick observes: “That’s going to be the great learning. Don’t just think about what you do today; how do you make broader use of assets and pivot quickly? A lot of companies are saying let’s be deliberate about how we make this stick

As Norman wrote in M&S’ annual report: “Our business is now operating in ways we have never operated before. Remote working is only a small part of it. Multitasking in stores, delegation of authority, fast decision-making, an action orientation irrespective of hierarchy, and brilliant communication direct to the front line.

“At the same time, the way our customers live and shop has changed beyond recognition and these behaviours will not fully revert any time soon. We are determined to make our ways of working permanent and accelerate the aspects of our transformation necessary to thrive in a new consumer landscape.”

All retailers should be looking forward with the same determination.