9 ways to ensure your retail business survives post lockdown
Even if the you do not get more loans !
Make Your Customers Safe
As soon as customers come to the entrance to the store, before they cross the threshold, they need to know that you are taking the health risks seriously. Is there someone ensuring that masks are being worn? Is sanitizer gel available? Has the store been prepared? Does the outlet look safe?
You are not going to get Footfall if customers are not reassured – make sure that the health guidelines are not just put into place but that they are really applied and enforced. Measures, such as deep cleaning, frequent hard surface wipe down, sanitization of door handles, debit / credit touch pads and baskets and trolleys need to be consistently applied.
Store or outlet configuration needs to be revamped to ensure social distancing really happens. Put in the floor markers and the screens and face masks for staff and payment points.
And make sure that you are providing the right training and the right PPE for your staff. Nothing communicates more negatively than staff who are not taking the health practices seriously!
Shout that you are Open
Potential customers need to know that you are open – make as much noise as you can in communicating that you are open for business! Most consumers seem to have become even closer to their ‘phones and social media – use the channels to say that you are up and trading again. Rather than just communicate opening hours, send some key messages – revamped store / safety precautions / new stock / special post- lockdown offers?
Target Cashflow now rather than Profit tomorrow
Now is the time to shift the slow-moving inventory, and to convert stock to cash. The recession is likely to last several years – rather than wait for what might be seen as luxury items to move, give them some impetus by cutting prices and doing deals! Reduce your stocks and avoid the temptation to replenish to previous levels!
Focus Focus Focus
Take this opportunity to reduce down your product range – in a recession the fast-moving staple skus are those that will give you stockturn, cashflow and profit. Be brutal in category management – do you really need 4 or 5 suppliers for one category? Why not pick 2 suppliers– market leader and price leader – and eliminate the also rans? And don’t buy the old brand loyalty argument – value is going to be the biggest purchase driver! Set some hard targets to focus the operation – 50% reduction in skus?
When you reduce down to your core products you may well find that this has an implication on not only how much working capital you need, but also physical space. Will you need all that shelf space?
Make your Suppliers work harder
Look critically at how suppliers meet your requirements – if they could deliver to you more frequently and more reliably would you need to hold so much stock? Do you want one delivery per week at a set time? Or 3 deliveries per week at your set time? Remember stock rooms do not sell product – they are not revenue but cost generators. Hope much storage do you really need? Can you reduce the size of your store or increase selling space with better service from your suppliers?
Look not just at suppliers of products – look at service providers! For example, are you really getting the support you need from your Bank? Are you fully set up for debit and credit card transactions? Electronic transfers? Touchless transactions? Web transaction support? Be demanding!
Develop your On-Line capability and capacity
Online trading is here to stay – lockdown has recruited and converted consumers to this! Major advantages – large basket size, better profitability (if you get it right) and the opportunity to build a great database of your clients for you to exploit!
Contrary to many who still believe in a return to the “old days” internet shopping is here to stay and those who are actively leading development of this channel will benefit. Offset the risk of consumers buying directly from abroad by making your websites exciting and fast and invest in making local internet shopping a great experience.
Look also at “Click and Pay” transactions where customers can pre-order and pre-pay, by phone or internet, the goods that they want, and give them a service where they have a scheduled pick up time so that they minimize time in outlet. Think about pick up points outside of outlets.
Negotiate some Elbow Room
Times in the next months, and many say years, are going to be tough. Get into careful planning of Cashflow and communicate with your suppliers, your landlords and your banks. If you can see that you are going to have a cash crunch, ask for what you need from these people now. Signal early, propose solutions and negotiate.
And make sacrifices too – reductions in salary levels, reductions in headcount are painful but will probably be necessary if you are going to convince others to help you to survive.
Build plans to generate loyalty between customers and yourselves. Loyalty cards for big retail operators can be very sophisticated with cards and accumulation points but are often under-developed, with little use of data for consumer profiling, cohort offers and push marketing. But even small operators can operate simple systems – loyalty cards with rubber stamps building to a discount on every 5th or 10th purchase? Easy to implement but can drive footfall and repeat purchase.
Analyze how else you can build loyalty – with public transport likely to be difficult, vans to pick up customers from home or meeting points and then later transporting them back with purchases might be a simple but effective practice for driving customer loyalty. Worth thinking about starting or reinforcing?
Products which offer value and reliability are going to be in demand. Value packs, or conversely smaller packs which represent less outlay are both worth considering. Brand product offerings need to be re-thought.
In the face of high inflation and lower purchasing power – and high unemployment – price is going to have a far greater weight in terms of marketing mix.
But we should also not forget the ‘affordable luxuries” segments – in times of hardship small affordable treats will always be necessary.
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