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Paradigm Shift: The Great Retail Reset

While the harbingers of doom like to paint a dire picture of the future of retailing - aided by closed stores, empty shelves, lack of staff and economic instability – the wise note that, with great challenges come new opportunities. The pandemic may have simply catalysed a long-overdue ‘great retail reset’ which has helped savvy retailers rebirth.

GO STRAIGHT TO SECTION


» The Importance of Resetting in 2022
» Retaining Staff during The Great Resignation
» Rising Stronger: Valuable lessons from the Pandemic - 2022 Buying Groups Report

Download PDF: The Ultimate Retail Reset Checklist

 

 

There is no doubt that The Great Retail Reset is happening, and will continue for at least another 12 months, or more.

However, while it’s understandable that many small businesses, and specialist retailers will be wondering what the future holds, not everything caused by COVID should be viewed as adverse.

During previous times of upheaval, such as recessions, world conflict and other pandemics, amongst all the turmoil, we usually discovered a few examples of The Law of Unintended Consequences. In addition, the old proverb every cloud has a silver lining rings true.

From the outset, COVID-19 caused the flight to digital consumers all around the world – at least in the West – who were forced into online shopping as government restriction and lockdowns meant they could not visit stores.

This had two impacts, the first: obvious, and the second could be described as an unintended consequence. Digital adoption across industries dramatically increased in the past two years because, for many, there was no other way to conduct business.

In essence, it accelerated what was already in progress. However, for specialist retailers it fast-tracked investment in digital technology.

Ironically, it accelerated the consumer’s use of online shopping, too - among people who had avoided it- or at least had not fully adopted the option.

As consumers purchased household groceries and staples – because they had little choice – it helped instill confidence in ecommerce in non-essential categories. And with all this new activity the greatest unintended consequence came to the fore: people came to realise the importance of instore shopping.

Perhaps it’s a human trait that we don’t appreciate things until they’re gone; something’s value is not realised until it is too late. The acceleration of ecommerce and online shopping caused by COVID-19, therefore, made people understand the importance of life’s little things.

For retailers this was great news because for a decade or more the pundits have been saying physical stores would go the way of the dinosaur. The global pandemic showed that to be false, though it did cause businesspeople to reevaluate the importance of their digital offerings.

Indeed, one feeds off the other and vice versa.

Perhaps it’s a human trait that we don’t appreciate things until they’re gone; something’s value is not realised until it is too late. The acceleration of ecommerce and online shopping caused by COVID-19, therefore, made people understand the importance of life’s little things.

Jewellers also learned that it can be one thing to have a website, but it’s another thing entirely to be found by the consumer. Digital acceleration meant they needed to work harder on their technology and website. For many, without shoppers entering their physical store, they found their online presence wanting.

It’s akin to having a jewellery store in a back laneway, rather than on the high street.

The next example on The Law of Unintended Consequences – shock to loyalty - arrived holding the hand of digital acceleration. They are effectively two sides of the same coin.

What might have been called ‘normal consumer behaviour’ changed as people discarded their loyalty to specific brands and stores.

True, some of this was forced upon them when international supply-chains were affected. That is, when consumers couldn’t find their preferred product or shop at their favourite store, they looked elsewhere, thereby quickening the shock to loyalty.

This is both a blessing in disguise and damnation; you can be more easily introduced to new customers while losing existing business. Therefore, The Great Retail Reset will mean that greater focus will be placed on maintaining longterm customers.

The pandemic brought to the fore a new consumer: the homebody. Prior to COVID, the homebody represented a group of people - largely Millennials - who are said to spend all their time at home because they can’t afford to do much more. The homebody economy thrived during COVID because people worked and shopped from home.

Their spending reflected a shift, with more people being forced to be homebodies spending money on at-home activities and small luxuries. Many workers not only enjoyed this new way of life, they wanted it to continue.

This has had a huge impact on CBD retailers who rely on office workers, however, it has been a boon for suburban businesses as they found new customers working from home during the day.

Every debit has a credit!

Of course, not all retailers survived the pandemic. It’s difficult to accurately gauge how many businesses have closed because of COVID, but it’s fair to say it will be in the thousands. It is also fair to say that the pandemic caused landlords to genuinely consider The Great Retail Reset too, when stores could not pay rent because they were banned from opening.

This created a more balanced approach to new discussions (read: ‘debate’) on more appropriate (read: ‘reasonable’) rents and tenancy costs. If governments were forced to step in with legislation to safeguard against landlords abusing the situation, then you knew it was serious.

Therefore, another unintended consequence could be a huge benefit to retailers as landlords appreciate their customer, signifying another side of The Great Retail Reset.

The points above are just a few of the lessons that we have learned since January 2020 - there are many others, see David Brown’s (below) – however; for retailers the two most important changes might seem diametrically opposed but they reinforce the importance of the other

The Great Retail Reset takes place with the knowledge that:

1) Buyers and sellers alike befriended technology and there’s no going back and;

2) humans are social creatures.

 


 

The importance of resetting in 2022

Resetting seems to have become the buzzword in the past 18 months.
DAVID BROWN says everything from COVID-19 to the economy is spoken
about as the opportunity to flick the switch on the wall and boot things back up again.

 

Whether it’s in your personal life or business life, recent times may have caused you to rethink your priorities. The purpose of this column is not to focus on your personal priorities but those of your business.

Are you engaging your business activities in an area that will provide you with what you want – both in terms of satisfaction and financial rewards?

If not, then in which areas do you need to clean the hard drive and relaunch the applications, so to speak?

As I often point out, many of our business practices grow haphazardly and happen without planning and it pays to re-evaluate whether these practices are achieving what is intended or, indeed, if they are even needed at all.

When undertaking a review, it pays to focus carefully on the following key areas.

Who are your preferred customers?

This question differs from ‘who are your customers’ because it doesn’t assume you are currently attracting the customers you want – with no disrespect to your existing customer base.

Who are you aiming to attract? What is the demographic and profile of your typical customer?The more clearly you can see your ideal customer, the more likely you are to attract them. The more carefully defined your target market, the more likely they will hear what you have to say.

Consumers are inundated with thousands of messages every day from hundreds of business entities. If you’re not speaking specifically to your ideal customer and their current needs, you will be drowned out by those who do.

Where are your opportunities?

What are the best opportunities for your business in the future? Is it where you are currently concentrated? What new opportunities are opening in your region or market for which you can take advantage? Who could you be working with to expand your business?

Many other businesses already have the customers you may want to appeal to.

For example, before newlyweds buy their wedding rings, they have probably booked their photographer. What can you do to build a relationship and a win/win with that photographer?

In what similar situations can you develop your relationships?

Who is your competition?

Your competitive threats are not only from your local jewellery competitor. In fact, increasingly your major competitor could be from other businesses who don’t even operate in your country. Anyone who aims to take dollars from your clientele is a threat to you.

In today’s business environment stores face competition, not only from other jewellers and even other retailers, but from the online world and the ‘experiences’ industry.

Social media has seen huge growth in people wanting to show what they have done, as much as what they have got.

The travel industry, restaurants and other activities have suffered greatly in recent times and many jewellers have benefitted from their loss as consumers spend their money on other luxuries.

However, this situation won’t continue indefinitely and you need to prepare for a resumption of normal activity if they haven’t happened already.

What processes need improving?
In today’s business environment stores face competition, not only from other jewellers and even other retailers, but from the online world and the ‘experiences’ industry.

Are your management systems suitable for your current business needs, or did they ‘come about’ by chance? When did you last undertake a review? Do you have processes and/or procedures that can be improved or eliminated altogether?

What are the current threats to your livelihood?

I recently became aware of a successful retail business on the edge of a town that had a busy road passing in front of their store. The authorities decided to replace the road with a motorway that took two years to build, and the business was ruined practically overnight. 

Not all problems can be foreseen but where we are aware of threats, we need to be proactive about how we will deal with them.

What staff do you need?

Much like your systems, your staffing requirements can increase of their own accord. Not only do you need to consider the number of staff, but the skill set they require.

The roles you require filled don’t always match your current staff and the skills that they have. It’s important to review your staffing requirements and the performance of the keys players you have in each role.

If you want to increase diamond sales and you don’t have the staff with the skills to do this, you will be facing issues.

 


 

Retaining Staff During The Great Resignation

In periods of great upheaval, the Law of Unintended Consequences comes into play.
Few people would have predicted the problems businesses are having retaining
and finding staff, writes DAVID BROWN.

 

Much has been made about the changing nature of employment since COVID-19 and the pandemic impacted our lives.

Many people, in the face of changing circumstances and government payments, are re-evaluating their priorities and where they want to work, or even whether they want to work, at all.

Many have opted to take early retirement; others have resigned when faced with compulsory vaccine requirements.

This has had an impact on finding staff across many industries – from truck driving to café workers, and the retail industry is no exception to this.

The Great Resignation is perhaps less about resignations as much as it reflects workers moving into areas that provide more pay opportunities.

But either way, it presents greater challenges for small businesses looking to attract and retain quality employees. In periods such as this, staff churn can and will increase.

Employee change costs such as paying out holidays, running recruitment advertisements or using an employment agency, and lost productivity while new staff are ‘nursed’ up to speed, can all cost a business thousands of dollars that can often be avoided.

So, the questions are: how do we keep our existing employees happy so they don’t go, and how do we attract the best quality replacements in a competitive marketplace when we do have to hire?

Here are a few suggestions on making this process more successful for you.

1. Compensation: Let’s start with the elephant in the room. Not offering a competitive salary in the current climate will have a greater impact than in the past.

Inflation is a new reality and staff will become increasingly frustrated with rising costs if their personal income doesn’t at least keep pace. This doesn’t mean that wage negotiations should be open slather, but you need to at least be sure you reflect market rates.

2. Work environment: One of the largest factors that decide whether staff staying with your business - or leave - is the work environment. If there is continual conflict and tension, you’ll find many staff heading for the door.

Effective communication and responding quickly to issues will help ensure that minor disagreements don’t turn into major problems later.

3. Flexibility: More and more staff are seeking a lifestyle element to their jobs. Employment that provides this will tick a lot of boxes for staff members and ensure longer-term employee satisfaction.

4. Leadership: In the 1995 movie An American President, Michael J Fox’s character unleashes at the President (played by Michael Douglas) “People want leadership Mr. President. They are so thirsty for it they’ll crawl through the desert towards a mirage, and when they discover there is no water, they will drink the sand.”

Most people want clear, concise, and decisive direction yet it’s a quality that seems to be in short supply.
According to Inc.com only 10 per cent of people are natural leaders however, those organisations with strong leadership achieve earnings of 147 per cent higher per share than their competitors.

The Great Resignation is perhaps less about resignations as much as it reflects workers moving into areas that provide more pay opportunities.

If you are one of the 10 per cent then you possess a unique ability to attract and retain staff. If not, then it is a skill that can be learned and used effectively.

5. Career paths: For younger staff, an opportunity to progress can be a significant factor in joining or staying with a business. Have you outlined to your staff how they can advance in your business? Do you discuss opportunities with them regularly?

A friend’s son currently works for a cutting-edge tech company that exposes him to a state-of-the-art environment, that includes an onsite gaming area in addition to regular work retreats to luxury destinations. Moreover, he has the opportunity to be mentored by a billionaire business owner.

However, despite these conditions he’s ready to leave because four years in the role and he’s still doing the same tasks. All staff have different priorities and there is no one-size-fits-all solution to keeping or hiring staff.

It’s important that you take the time to determine the individual needs of each person and attempt to cater to what keeps them happy. It will be worth the investment in time and energy.

 

Click here to download the Retail Reset Checklist

 

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