Monthly Archives: September 2021

Coming out of the pandemic – Five lessons from an SME in surviving a crisis

When the pandemic first hit, my thoughts were drawn to the here and now. This involved reforecasting and our cash flow, calculating how long the business could survive and employ staff without any income. However once the dust settled it made me realise there was never a better time to embrace new thinking and how necessity is the mother of all invention. The pandemic has forced new approaches and new ways of thinking that can improve how SMEs can do business. From how we engage with staff to our approach to business and people we work with, to the new products we are developing. I think there have been five ways we have mitigated the worst impact of the pandemic that are good lessons for other SMEs in similar situations.

Supporting staff

My key focus was employee support and motivation so whilst we agreed plans with brands, the workforce needed to be supported to deliver these. Lockdown put the nation under very odd circumstances, unique to everyone and all very personal. We therefore began the process of honest communications, support from a work and personal perspective to help develop coping mechanisms and create clear expectations of working patterns and priorities. We increased training, which ranged from soft skills learning and also included employee support curated with external practitioners in each field to assist the workforce as best we could. These initiatives looked to develop life skills delivered virtually for all staff, these included Coping with Covid sessions, Diversity, equity and inclusion discussions, Mental & Physical Health courses which evolved based on employee feedback, all supported by our weekly Fit for Gekko emails that gave useful information, tips and light hearted advice. As the bedrock of the business during uncertain times we needed to make sure they were looked after and could bounce back strongly when the good times returned. 

Develop new innovative services

Even with some restrictions eased at different points, it became impractical and less safe to send people in store to train staff so we moved at pace to pivot to develop new digital services for brands. This included a digital learning management system for retail sales teams. This is something we had been strategising for a while but the pandemic forced us to rapidly speed up the development. The upshot is we have been able to train many more staff than we would have and created a valued new service which will complement our instore activity. For one brand we have trained over 100,000 retail sales advisors virtually since March 2020 through a mix of live streams and one 2 one virtual sessions. It enabled us to increase our reach by 37%. In meeting the needs of the evolved channel, we have helped diversify our business offering. We also created multiple Engagement Portals for staff in areas ranging from virtual education, online expenses, employee management tools. We will continue to focus on increased investment in data and insight and training and employee engagement. 

Invest in insight and truly knowing your customer

With less live activity with clients, we invested in our Data and Insight team to develop our research market trends, economy and shopper habits. This was critical to support the brands we work with and equip our staff to understand the macro situation better and react. In gaining a better understanding of the state of the nation we created a shared understanding of the challenges ahead and how to overcome them. It has set us up in a good place to understand the challenges of the future and to remain more relevant for our partners and clients.

Cementing relationships in difficult time

Given the difficulties we have all faced, this period has been a perfect opportunity to really cement relationships with partners. We all faced the same challenges and it was a time to show loyalty. In some ways the pandemic provided the glue to bring us all closer. Sadly there have been many examples of businesses who have failed in this regard during this time. But my sense is that this will be remembered by customers and suppliers. Short term financial decisions could have long term implications for brands seen as not helping people during this time. Fortunately the majority of our client base were very supportive of our partnership. However with others I had to hold their feet to the fire a bit. It’s interesting to see how some global brands reacted to suppliers, not all were consistent with their ‘corporate values’ and as an SME you have to be brave and stand your corner. With a sustainable cash flow and supported staff we were able to begin the process of pivoting to meet the immediate needs and changes required to support our brands so that they could continue to operate in the channel and compete.

Never underestimate your staff

I remain optimistic for the future and if we can retain and grow our talent organically, complementing this with more flexible working patterns, I believe we can recover in the next two years to bounce back and exceed the 2019 results. I do think this whole period has speeded up innovative thinking, digital transformation and under the heat of the pressure encouraged agile and dynamic thinking such as the development of new products and services ensuring we serve the needs of clients. On a human level it has of course created an enormous amount of stress, pressure and tragedy for so many and we need to be mindful of staff’s mental health as we return to the office. But ultimately it has made me appreciate that you should never underestimate your staff. 

The hidden talents, resilience and ability to adapt were highlighted amongst the team with the vast majority adapting and delivering irrespective of the situation. It’s easy to see your staff as just ‘employees’ but they are more than that, they are the pulse which makes your business beat and adapt better than perhaps you may have wrongly imagined.

By Daniel Todaro, Managing Director, Gekko Group

Article published by SME Business News

Photo by Tim Douglas from Pexels

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How are department stores taking aim at Gen Z shoppers?

In recent years, department stores have increased investment into online offerings, digital marketing campaigns and product collaborations in a bid to target younger shoppers.

Prior to the Covid-19 pandemic, an independent study estimated that Gen Z’s direct and indirect spending power reached up to $143 billion, a level of financial influence that made brands and retailers alike stand up and take note.

Despite the pandemic hampering the sector worldwide, Gen Z shoppers’ digitally native lifestyle meant their spending wasn’t limited when stores were closed during government lockdowns.

Now that all legal Covid restrictions have ceased across the UK, these younger shoppers are expecting the same digital and interactive elements they have access to online within physical retail spaces when venturing out.

Last month, London’s Selfridges opened its new gaming destination PlayHouse with hopes to cash in on the lucrative gaming market and entice younger shoppers.

The 200sq m store brings together digital and physical experiences with immersive VR experiences and car racing simulators.

Last year Harrods launched and expanded H Beauty, which offers a range of premium and luxury brands under one roof as well as onsite treatments, consultations and demonstrations.

While in July, the luxury department store launched a clothing rental service in partnership with My Wardrobe HQ in a bid to tap into shoppers seeking sustainable fashion options.

This came a month after a new report from Depop revealed that Gen Z’s shopping behaviours are “strongly influenced” by brands commitments to social and environmental sustainability.

When it comes to sustainability, 90 per cent of Gen Z consumers surveyed said they have made changes to be more sustainable in their daily lives and more sustainable fashion practices play a central role.

Melissa Minkow, Retail Industry Lead at the digital consultancy firm CI&T said these recent moves have been smart.

“The department store concept isn’t completely irrelevant in terms of how younger generations shop, but it does need to be updated in order to fully resonate,” she told Retail Gazette.

“Gen Z is a group of social shoppers- they enjoy making shopping a shared experience for themselves and their peers, and department stores structurally haven’t been super conducive to indulging that desire. These efforts will cater to Gen Z’s appreciation of mall culture and destination shopping.”

Oliver Guy, Senior Director, Industry Solutions at Software AG explained that now because Gen Z makes up more than a third of the global population, “Selfridges and Harrods are right to try and attract younger shoppers into stores and retailers who ignore them will face their own peril.

“The key reason for this is that we are in an age whereby consumer habits commence with younger generations and move onto older generations.”

He noted Instagram as a key example as it started with teenagers but now the older generations are also avid users.

“Retailers investing to meet the requirements of Gen Z is not so much about spending power now, but about the generational influence it will have in the future as they lay the foundations for the future of living,” he added.

“The things that Gen Z look for in retail experiences set a high bar and are areas in which other generational cohorts will also desire one day.”

While department stores look to target these younger shoppers, can they do so successfully without alienating older consumers?

Daniel Todaro, Managing Director of Gekko, the marketing and experiential agency said it is possible: “Look at those who do it well with all age groups, the likes of Lush, Urban Outfitters, Apple and any sports brands stores.”

“They offer a little bit of something for all enhanced with great customer service.

“It needs to be somewhere people plan to go, not just need to go. This is especially true for Gen Z, those digital natives who perhaps seek something that their online world does not provide,” he added.

“The introduction of physical ‘pop ups’ in-store or tailored shopping destinations are designed to unite rather than alienate shoppers, and bring them to together in a universal experience which goes beyond ‘just shopping’.

“In a world that has seen the adoption of online shopping increase so rapidly, these experiences are key to entice new customers in store, regardless of generation.

“That said, traditional retailers do need to be wary of not becoming too focused on the interests of younger generations at the expense of older consumers.”

Ed Hill, SVP EMEA at Bazaarvoice explained that these new offerings such as Selfridge’s gaming destination and Harrods’ H Beauty stores will see younger and older shoppers alike opting to visit department stores, which traditionally have been seen to be more exclusive to older consumer groups.

He added that the disposable income available to the baby boomer generation is essential for the luxury market, something the likes of Harrods and Selfridges has built itself upon.

“Older consumers might be more convenience driven, compared to younger generations which are attracted by visuals and engaging experiences, but they all want a smooth and seamless shopping journey which provides the outcome they entered the store looking for,” Ed said.

“All retail journeys and experiences should be optimised to appeal to all generations.”

Alongside the existing new measures department store retailers have put in place, Nikki Baird, VP of Retail Innovation at Aptos emphasised that department stores have to continue giving Gen Z shoppers ample reasons to come to stores.

“Events, education, celebrities, etc. Gen Z is more about experiences than things,” she explained.

“That doesn’t mean they won’t buy things, but it does mean that retailers need to do more to create the events that lead to products. Department stores especially, since many brands they carry are available direct from the brands themselves or pretty much any place you want to look online.”

When asked if department store retailers are simply focusing on experiential retail rather than Gen Z shoppers, Ed Hill explained that department stores have been faced with a real battle for some time, and the pandemic has done nothing to help this.

“Experiential retail has become a focus for retail across the board, particularly as consumers seek heightened social experiences that have been missing for 18 months,” he added.

“There’s no doubt that department stores need to adapt and appeal to Gen Z shoppers, like every retailer does, and partnerships with brands that provide experiential experiences – as seen in Selfridge’s collaboration with Smartech for its gaming PlayHouse  –  can be a vital lifeline for retailers looking to remain relevant amongst younger audiences.”

After the last year wherein digital commerce has been at the fore, what has become clear is that physical retail needs to meet customer expectations and offer them the same interactive experience that they have online.

Nikki Baird said the problem is that many department stores have mistaken their company history for their brand.

“Department stores have a long and storied history, but they have let that history be what defines them to their customers,” she explained.

“That only has relevancy to older shoppers who have that shared history.”

Baird said that in digital-led retailing, “who” the brand is becomes the most important thing, because it’s what is most easily conveyed online.

“‘I have the best brands’ – what most department stores really have as their brand – does not translate,” she added.

“Having the best brands is meaningless when the best brands are literally one tab away in the browser.

“I think even the department stores that have invested in technology to revamp their image have gained some traction with Gen Z because they have cool ways to engage, but none of them have really invested in a true sense of brand or lifestyle that is differentiated from any other brand or retailer, and they will continue to struggle for relevancy until they do.”

Why have department store retailers been behind trends in recent years?

Melissa Minkow explained that because consumers don’t shop as frequently anymore with a specific brand in mind- they shop by category, the way department stores are merchandised doesn’t appeal to current shopping behaviours.

She added that the usual price points found in department stores tend to sit in the mid-range, which has been a decreasingly successful spot for retailers.

“It’s not necessarily that department stores have been behind trends, it’s more that they just don’t offer a value proposition suited to current consumer behaviours,” she said.

“Finally, with the rise of social media, retail has become an extremely quick-turn space for assortment. The Department Store model isn’t meant for this fast-fashion dominant retail culture.”

Lisette Huyskamp, chief marketing officer at Productsup added: “Department stores have undoubtedly struggled to Certain high street retailers have moved towards a successful omnichannel approach but many department stores have struggled to play catch-up in recent years and keep pace.

“While not a department store, a great example of what can happen when things go wrong is GAP. The American clothing company failed to invest heavily enough in its digital offering, resulting in severe job losses and the closure of all its UK and Ireland stores.

“Therefore, the John Lewis and Selfridges of the high street must hone in on what they do best and amplify this across multiple channels to truly offer customers a compelling experience that spans across in-store and online.”

Last month news broke that Amazon was looking to enter into department stores, leading many to ask if the ecommerce giant would disrupt existing retailers, much like it did for grocers across the UK after Amazon Go and Fresh opened doors.

Oliver Guy spoke on Amazon’s recent plans and said the new changes will accelerate how quickly organisations see that reinventing the store is essential.

“Other department stores only have one purpose – transactions,” he explained.

“Amazon’s venture will shake up the industry to provide new offerings and experiences to customers. Retailers will be watching carefully and working out how they are going to adapt to reflect this.”

Melissa Minkow added that department store brands that have been able to survive this rough retail period will likely uncover and borrow some best practices from Amazon’s efforts, while learning from the pitfalls.

“I wouldn’t say this move will revive the sector as a whole, but smart department retailers will learn from both the good and bad that come out of this experiment because Amazon is willing to take risks a heritage sector wouldn’t typically take,” said Minkow.

“In particular, Amazon’s move will force heritage department stores to rethink how convenient and seamlessly shoppable they are for consumers.

“Some of the reasons department stores have struggled- unpredictable inventory, staffing shortages, non-intuitive merchandising- will hopefully end up changing after Amazon executes in an exemplary way against those issues.

She explained that this could spur an overhaul of all current CX-related strategies for retailers such as John Lewis and Selfridges.

By Daniel Todaro, Managing Director, Gekko Group

Article published by Retail Gazette

Photo by Wendy Wei from Pexels

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How retailers can maximise sales in a Golden Quarter like no other

Photo by Pixabay on Pexels.com

From a retail point of view, whether we are ready or not, September means all eyes start looking towards Black Friday and the Christmas Peak period. The importance of this period can’t be underestimated, particularly in 2021 on the back of shops being shut for such long periods during the various lockdowns. Finally we return to a more “normal” period of retail behaviour and holiday festivities with some strong indications the bounce back could be like no other. Let’s explore what some of the forecasts are predicting and how the season is expected to play out this time.

Consumer confidence has been consistently rising through this year and should be closing in on positive territory as we get to the golden quarter. GfK’s trusted Consumer Confidence Index is already up to -8 from the latest August reading, putting it ahead of pre-pandemic levels, and barring any serious economic or public health issues it should keep its momentum.

Absence makes the wallet grow stronger

Within this, there have been big jumps in major purchase indexes too, with shoppers seemingly ready to spend on the right products at any price point. UK consumers are estimated to have saved around £200bn in the various lockdowns, while 54% of those savers are ready to spend it on Black Friday and Christmas according to a recent survey by Future plc.

A big draw for spending that money for most people this year will be the fact that we all missed out in many ways last year. Whether it be seeing more loved ones, a family holiday or a trip to an atmospheric high street to do the Christmas shopping. Those returning will be expecting a positive experience from brands and retailers, and it will be important to consider both shoppers that are part of this group, along with those that remain cautious with the virus still circulating.

Whichever way people behave, it looks like certain patterns are going to come to the fore. Home improvements, fashion, health & beauty, and toys of course are all set to be categories of real growth this season. Although there could be a whole series of sectors that could benefit when it comes to potential sales growth due to pent up demand.

All of this confidence is pointing to optimism for the festive period when it comes to sales forecasts for 2021. Although a slight drop is predicted in total retail terms due to less food sales this year, Retail Week research predicts a 0.5% increase in non-food sales vs Q4 2020, and a 1.7% improvement figure in comparison with 2019. The two year increase largely comes as a result of consumers spending more time at home, and subsequently spending more on home improvements and entertainment.

Retailers primed for the discount season

So when will the spending begin? Last year marked a change for the season and its normal pattern with a much longer promotional season. Consumers were urged to shop early due to the strain on the supply chain, and significantly Amazon positioned its Prime Day in October, a month earlier than Black Friday in November.

Amazon moved Prime Day back to its regular summer slot this year, and it remains to be seen whether they will launch another promotion in October to match its 2020 position. I wouldn’t bet against the ecommerce giant pencilling in another sale for that valuable slot again, whether it is another branded Prime Day or otherwise. If it does, then other retailers will follow suit and we will get another lengthy promotional period like we did last year.

Christmas shopping starting earlier this year

There are some warnings of issues that could dampen the mood this year however. Pandemic related problems could arise of course, along with truck driver shortages and global supply chain disruptions that may delay goods arriving to the UK at all. Reporting by The Observer found that retailers are already warning consumers to get thinking about shopping for Christmas to avoid disappointment. It’s the second year in a row where such implications have been highlighted. It is becoming clear that consumers are hearing that call, a recent Ebay survey showed that 41% of shoppers are aiming to get their Christmas shopping done before December even begins, as opposed to just 25% last year.

Retail as ever will continue to rise to any challenge. 86% said they will enact the in-store safety and hygiene measures they relied on during 2020 in order to protect their customers. Meanwhile businesses are acting now to ensure they have the stock they need for a successful Christmas period. With more consumers in store this year, retailers will need to ensure they are managing any issues behind the scenes. They will also need to ensure that customers on the shop floor are getting the purchasing experience they have looked forward to.

As we approach Christmas 2021, consumers are certainly going to have plenty of choice as to where to spend their budgets, and retailers will have to do all they can to make sure they stand out from the crowd. Engaging marketing, whether it be store representatives, training or merchandising activities, can ensure that the consumer knows who you are and why they should be choosing your products. Once that is achieved then loyalty and success will follow, and not just for Christmas.

By Tom Harwood, Data and Insight Manager, Gekko Group

Article published by BDaily

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