As the retail industry faces unprecedented challenges because of the coronavirus pandemic, Retail Week asks industry experts for their view on the biggest questions of the moment.

Lisa Hooker, consumer markets leader, PwC

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“As protecting the population and the NHS is at the forefront of the nation’s minds, there was little public objection to shuttering non-essential high street stores, with several retailers acting ahead of the prime minister’s statement on March 23.

“However, it’s hard to argue the same for non-essential ecommerce. Retailers sit at the heart of a complex set of dependencies – consumers who want access to books, toys, homewares and, yes, even fashion to make their enforced time at home more appealing; suppliers that are already seeing catastrophic reductions in demand, and online retailers may represent the last remaining route to market; and employees whose livelihoods depend on the survival and success of their paymasters.

“That’s not to say safeguards must not be put in place, which will inevitably add cost and reduce productivity. This will include safe social distancing measures in warehouses and the right protective equipment and cleaning regimes. Nobody should be forced to work, whether that’s because someone in their household is unwell or vulnerable, they don’t have means of transport or even if they just don’t feel comfortable doing so.

“But if enough colleagues are willing and able to do so and appropriate arrangements can be made to protect employees in line with current government guidelines, it is possible for retailers to continue operating responsibly online.”

Miya Knights, head of industry insights, Eagle Eye

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“Retailers in non-essential categories should certainly still evaluate the feasibility of trading online, but only if the situation and circumstances make it safe to do so and staff are willing.

“Staff will only be willing if sufficient extra measures are taken to safeguard their safety in the workplace, as well as their incomes through furlough in the event they are unable to work. I note Matalan has given its workers this choice. Once all of these things are considered, a retailer may then choose to continue to fulfil online orders if there is enough consumer demand.

“I think non-essential retailers can justify continuing to trade online if there is consumer demand and if safeguards are taken to make sure staff are willing to work and not coerced because they are on zero-hour contracts with no provision for statutory sick pay, holiday or furlough.

“Many retailers will feel pressure to keep trading if they can, to mitigate immediate – and perhaps bankruptcy-threatening – revenue and cash flow shortages. This particularly includes non-essential retailers that operate and have been forced to close their stores, but also have an ecommerce channel.

“We should, however, also remember that ‘trading online’ tends to describe the sale and fulfilment of more than just goods that require warehouse and delivery staff. Even retailers that are no longer currently able to fulfil online orders can always sell their products and services now for fulfilment later if customers are willing to wait to receive them.

“That is why we’re likely to see the growth of digital gifting accelerate as businesses such as pubs, restaurants, bars and gyms especially rely on digital gift card and voucher sales during key upcoming seasonal events, such as Easter and Father’s Day, to generate revenue that relieves cash flow issues and be offset against future sales. Such gift sales can also capitalise on the time when social distancing measures are relaxed to help drive footfall back to stores.”

Andy Mulcahy, strategy and insights director, IMRG

Andy Mulcahy is the editor at ecommerce trade body IMRG

“We look at 300 retailers every week, and only 19 have suspended operations so far. Of those that have shut, some said they did so because they felt they should. Others because they basically had an issue with staff over safety. The majority of the rest are still uncertain about what to do in the long term.

“One model that might become popular is what Dunelm has done. They stopped trading but then a few days later went live again, but with a skeleton crew. They were obviously satisfied they could observe safety standards that way.

“Demand is incredibly lopsided at the moment. Certain categories are getting a lot of interest. Clothing isn’t selling in any volume at all; however, electricals and home office equipment are selling very well, as are things like crafts and toys for people with kids at home.

“That will likely change and demand could shift as this goes on. If you’re a retailer, you don’t want to shut down your operation only to miss a sudden swing in demand towards your category, particularly as that demand might not last very long.

“With the lack of job security out there at the moment, it’s hard to see demand for clothing and luxury, one-off items coming back any time soon.”

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