MANFRED ABRAHAM – CO-CHIEF EXECUTIVE AT YONDER, the insight consultancy that blends research, strategy, imagination and activation to unlock opportunity and deliver business performance
With the UK having endured its second national lockdown, following months of economic uncertainty and disruption, we find ourselves in a precarious financial position. It seems now that each week, another high street stalwart is wiped off the map.
There is genuine concern for the future of brick-and-mortar retailers, and rightly so, as the timing of the second lockdown couldn’t have been worse for these businesses, with the months up to Christmas being the most valuable period of the year for high street brands.
There is, therefore, a significant hole in the revenue streams of these businesses, who, for the most part, depend on stellar sales figures in the build up to Christmas to get them through the year in the green.
Further twisting the metaphorical knife, online sales are up 61% this year in contrast with the same period last year, giving e-tailers not only the immediate opportunity to have record years for sales, but also to build relationships with new customers and develop long-lasting brand loyalty, resulting hopefully (for them) in increased return sales. However, this certainly paints a very gloomy picture for the brick-and-mortar businesses on our high streets, who risk losing their customer base to competitors with stronger online presences.
It is regrettable that far too many of these businesses have been caught in the dark by a second lockdown and had not been able to plan appropriately. Whether that’s due to a lack of communication from the government or naivety in business preparations, there is little evidence that businesses were 100% prepared for this.
Amazon, however, that has almost no high street presence, launched its Black Friday seasonal sale early, despite not being immediately impacted by the lockdown. Quick off the mark with its contingency plan, Amazon is set for a bumper Christmas period and others to, can benefit.
Following Amazon’s lead, brick-and-mortar stores need to instigate contingency plans quickly and effectively, helping to generate sales throughout their busiest period, despite shop stores being closed. Some Yonder advice to consider:
- Stay true your brand, culture and values
At times like these, brands are judged on their actions, not their words. It’s hugely important that businesses stay true to their values and act responsibly on behalf of its employees, customers and communities, to maintain positive relationships and loyalty.
Remote working and customer interaction will continue to play a pivotal role through 2021, with many business’ employees noting an improvement in their work-life balance, while businesses themselves have reported an upturn in productivity. On the consumer side, improvements to remote communication and the online offering are resulting in more choice, which following a year of uncertainty, will continue to be important as we move into 2021.
- Localisation of Supply Chains
With 2020 having sent shockwaves across the global economy, effectively restricting and highlighting the vulnerabilities within the global supply chain, the emphasis will fall on businesses looking to quickly establish local supply chains.
With Brexit and the worsening trade relations between the US and China only emphasising the ongoing risks that derive from global supply chains in turmoil, we’re expecting to see businesses safeguard their operations by taking back control of their supply chain. Increasing consumer demand for a more sustainable approach to the economy will likely speed this process along.
- Connecting online
Finally, connecting with people online is now easier than ever but brands should also be aware of the need to step away from screens and not attempt to interfere when people are disconnected.
As brands rushed to get their online presence up and running as the country initially entered lockdown, many of these businesses began interacting with current and future customers via social media. Which, for the most part, was a massive success for the businesses that created an appealing product via this platform.
As the panic of 2020 dwindles, the job now for brands is to make their social media channels more authentic, less of a necessity and more of a dedicated asset to improve customer relations and maintain brand values.
COVID enforced remote working has highlighted opportunities for businesses to revaluate how they operate. From revaluating how we approach the traditional 9-5, 5 days a week, to having a more consolidated online presence, things have changed in the economic climate that are presenting exciting opportunities for every type of business.
With consumer preference and demand shifting so significantly in the last year, and whilst inevitably some of these will revert to pre-COVID times, it’s not just the economic landscape that is facing long-term change, but also the consumer landscape and the expectation of how brands will interact with their customer base.
It’s an exciting opportunity for businesses to restructure and address how they’re looking to grow both the business, and its customer base throughout 2021.