March 7, 2021

Neil Stone: Examining the Options for Beleaguered Brands Trying to Survive the Continuing Fallout of Covid 19

By Neil Stone, Head of Marketing, SmartSurvey 

Having pre-warned us about the dire financial consequences of another month-long lockdown, retailers are once again licking their wounds as the latest industry victims including Debenhams and Arcadia, owner of the Topshop, Burton and Dorothy Perkins brands are all set to close following lockdown 2.0.

In the weeks leading up to Christmas shoppers typically spend around £50bn on goods other than food as they look to buy gifts for friends and family and decorations for their homes. With what should have been one of their most lucrative month’s in the lead up to Christmas with the inclusion of Black Friday, the closure of non-essential retail stores during November’s lockdown in England, left the high street missing out on even more than the £1.6bn of lost weekly sales they experienced during the spring lockdown. According to the British Retail Consortium, this poses a significant threat to the viability of thousands of shops and hundreds of thousands of jobs countrywide.

While the relaxation of trading hours announced by the communities secretary, Robert Jenrick, may help some retailers recoup their lockdown losses such as Primark, already operating 24-hours a day in some of its stores following the move back to the three-tiered regional system of restrictions, for others particularly smaller retailers it may still not be enough. This becomes more obvious when you consider that the profits smaller retailers usually make in the lead up to and during the festive period, often determines whether they will still be continuing to trade into the new year.

What more can be done to help retailers survive?

Well, a good place to start is to look at those parts of the industry that are still doing well.

One area of the economy that isn’t seeing decline is the e-commerce sector that has been predicted to grow by an extra £5.3bn this year. It’s a significant number and a sign to keep positive – however that growth has been fuelled by the change in consumer behaviour resulting from Covid 19, which is something that all businesses need to take note of.

This behavioural change is hardly surprising when you consider that for many months now Government advice has been to stay home and save lives. COVID-19 has sadly taken the lives of many loved ones already. You can’t see or hear it; all you can do is your best to try and avoid it. It’s scary and the risk of infections sticks in the back of our minds when we leave the house and will be at the heart of current and future consumer behaviour for some time, even with the prospect of game changing vaccines now on the horizon.

For many, with COVID-19 in general circulation, the thought of walking into a busy high street store to buy a new pair of jeans is simply not worth it. Why place yourself at risk when you could order those jeans online, from the safety of your sofa?

Subsequently, since the start of lockdown we’ve seen a significant increase in the number of e-commerce app installations, alongside a big rise in e-commerce spending, as people become more comfortable and engaged with online shopping, which has created a real tipping point for brands. They will either hedge their bets, get on board and embrace all things digital, or they won’t, as for some brands it’s a lot more challenging to change their business model to one that’s digitally centric.

Primark is a great example of this, according to John Bason, finance chief.

“Look at a £2 T-shirt. Everyone thinks it’s clickety-click but one third of clothes get returned.

“That means someone has to pick it up, someone has to deliver it, someone in the store has to take it back, refold it. It doesn’t work at the lower price point.”

For brands that were able to pivot to a more digitally focused operating model, taking action sooner, rather than later was always going to be critical to remaining competitive. It could also offer them an element of future proofing should we potentially face a future where customers no longer wanted to shop in traditional bricks and mortar stores in a post pandemic world.

This becomes even more poignant when you consider that many analysts were predicting that the high street shutdown would push even more shoppers into the arms of online specialists such as Amazon, which certainly seems to be the case when you consider their third-quarter results for 2020 showing a 37% increase in earnings. Yet despite this many well-known retailers including John Lewis, Marks & Spencer and Curry’s PC World were able to keep competitive by shifting their focus to e-commerce sites when forced to close their physical premises before the first lockdown. Infact, Marks & Spencer were already ahead of the game long before this, by investing £88.9m in their digital operations by the end of September 2019.

Keeping pace with changing consumer perceptions

However, for any digital transformation project, it’s vital to keep track of changing customer perceptions and understand what’s at the root cause of your consumer’s behaviour, as without responding to their exact needs it’s unlikely to be a major success. This is where analysis of consumer data is so critical, as armed with better insight businesses are far better positioned to think about how they can pivot their operating models to address those concerns and continue to drive growth.

There are many solutions available to track and understand consumer behaviour, such as working with traditional market research agencies, to leveraging online services like survey software and consumer panels to connect and gather feedback from existing customers and target audiences. Consumer panels are particularly useful for rapid research, connecting businesses with millions of respondents across multiple countries that can be segmented to meet their target customer profile.

For businesses acutely affected by COVID-19, survey software in particular offers a cost-effective way to engage with their existing customer base and rapidly collect insight on their current perceptions. Run regularly, surveys can enable business to track and monitor changes in customer perception for a very modest cost.

So, what’s next?

While there’s been an ongoing decline in Highstreet footfall for a number of years now, due to COVID-19 this has dramatically accelerated to levels never seen before. So, when we do eventually come out the other side, I think it’s going to be challenging for retailers to continue with their traditional bricks and mortar stores. It may even lead to more retailers opting for experience stores with little to no staff, very much like Tesla where you can see and touch the product, but the ordering and payment all occurs online.

What we can be sure of however, is that the coming months will be a crucial time for the retail sector. I suspect they will be reviewing their budgets, particularly looking towards new build and store refurbishments with a view to investing this money into digital assets, whether that’s apps, websites or digital marketing, to engage with those customers in the environment they currently feel safe and confident to shop in – online.

Keeping strong by taking more digital actions now

When it comes to their digital capabilities, I think the first thing that retail business owners should be looking at is their web presence and asking themselves, is our site well designed and does it provide a great user experience that makes it quick and easy for our customers to find and buy products?

It’s also important to ensure help is on hand when customers need it. Tools such as live chat enable businesses to provide store assistant advice to visitors of their website or app. Live chat is an important bridge between the virtual and real-world connecting users with a team member who can answer their questions that turn a browser into a customer.

Next, it’s about looking at what you can do to generate more digital footfall. Web traffic can be generated in a plethora of ways with numerous advertising channels to choose from. There are many cost effective email and social media marketing tools as well as creating content such as blogs, articles, podcasts, and networking with influencers. Gymshark, now a global sports brand is a great example of how digital can enable growth. The key to their initial success was influencer marketing which helped them scale from a founder in his parents’ garage to £170 million turnover in just 8 years.

Business owners will need to think about whether they have the in-house resource to do the work, or whether they need to outsource. For those short on time or lacking skills there are agencies that can support or sites like People Per Hour or Upwork that can connect them with freelancers to help complete their projects.

Alternatively, for the tech savvy there’s the option to build something yourself, through the many tools available from Etsy, Amazon Marketplace and eBay to Shopify, Squarespace and WordPress. These all offer low-cost solutions to build quality storefronts or e-commerce websites, to start selling products online.

It’s also paramount to keep connected with your customers

Given that the number of furloughed workers during lockdown 2.0 was estimated to be as much as 5.5 million and government warnings that the UK unemployment rate could be as high as 2.6 million by mid-2021, it’s not surprising to hear that consumers are saving more and spending less.

So, what more can retail brands do to reassure them and get business moving again?

Probably the best approach for businesses right now is to be doing everything they can to stay in touch with their customers and understand their concerns, wants and needs – essentially getting feedback wherever they can.

Collecting feedback may seem daunting at first but a simple and effective approach is to draw out a customer journey map. Put yourself in your customer’s shoes and think about the different touchpoints on their path to purchase with you. From here you can quickly map out a number of potential interactions and then different ways to collect feedback such as exit intent surveys for those didn’t buy first time, post purchase surveys, support and service surveys and advocacy surveys for existing customers.

Businesses that continue to operate with a more traditional model, could consider looking to engage customers by text message, email or incorporating a survey into a digital experience for instance after ordering food or drink via the web.

We are more distanced than ever from customers and feedback loops are a great way to start reconnecting and rebuilding consumer confidence by better understanding what’s working, what isn’t and what needs to be improved. Bill Gates famously said, ‘your customers are your greatest source of learning’, yet many businesses fail to ask customers what they want. Your first survey could uncover amazing insights such as customers who would purchase though an app, why they feel uncomfortable in store and what needs to change or that they would be happy to sign up for a subscription service because they love your products and want them every day, week, month or year.

Steve jobs said, ‘It’s not the customer’s job to know what they want’. Mr Jobs was on the money, it’s up to businesses to figure out what needs to change. The innovators will survive and those that don’t adapt will die. It’s a difficult time for businesses across the world but talking to your customers will help to get through this challenging period and the simple survey could be the key to future success.

SmartSurvey is the UK’s leading Data Collection platform helping over 300,000 customers make better decisions every day. Trusted by leading brands and the Public Sector SmartSurvey is ISO 27001 and Cyber Essentials Plus accredited, GDPR compliant and has a 100% UK based team with UK data storage and back-ups. SmartSurvey also offer a ringfenced solution to ensure data is not transferred outside of the UK.