Rocky road for retail but the agile will survive
It is with regret that we read about Arcadia’s demise but more because of the impact on those that will lose their jobs. It’s not like we didn’t see it coming.
I have written about surviving a recession and modelling scenarios with the key take away that cash is king and we must be agile in our operations so we can respond to market change. Both of these principles should have been applied to Arcadia.
Former chairman of Marks and Spencer, Lord Myners, said Arcadia has been on the brink for more than 15 years.
"Covid has obviously been a significant factor but the truth is this group of brands has been haemorrhaging cash now for 15 years. Sir Philip never really accepted the opportunity or challenge of online trading. He made no investment in that area at all."
There is no getting away from it, times are tough, consumers are counting their pennies - nearly three-quarters of UK consumers are concerned about their finances and almost half say they will spend less this December than last year.
It’s even rockier for retailers who should be in the glow of the ‘golden quarter’ with Black Friday, Cyber Monday and the run up to Christmas. It is obvious that channels have already shifted, and this Christmas the trend will be further highlighted as consumers turn to the convenience and relative safety of shopping online over the in-store experience - 44% are spending more (than before the pandemic) on delivery services.
Retailers need a plan – an online plan that is based on data driven decisions and actions that boost consumer confidence.
Use the data
Online generates dynamic data from user behaviour and allows retailers to constantly monitor winners and losers. This same data should be used to model scenarios that will enable Finance to work with internal Teams to instruction supply chain and operations to react and adapt dynamically.
“If Kate Middleton is seen in a red dress in all the newspapers yesterday and your platform is full of blue dresses – amend and change NOW!”
Being able to react to one off events like Kate, changes in consumer circumstances - matching masks and lockdown leisurewear over dressing up to go out - while still operating a medium-long-term plans – but amend these dynamically.
Always look to improve
Your Consumer is going to tell you what it is you are doing wrong. They may also advise what you can do better. Being asked ‘how are we doing’ is expected and Chatbots have come a long way. What consumer really like to see is that they are being listened to. But remember it is not one size fits all. Knowing your target market, what triggers their loyalty and how they like to engage online is critical to getting them to buy.
“Social responsibility, sustainability and having influencers to advocate your brand are all factors in the ‘new’ consumers’ decision making process.”
Invest in tech
Seamless processes and a better customer experience is going to attract customers. It is also going to require good tech. Innovators are also looking at ways to make the online experience better. Look at Klarna (https://www.klarna.com/uk/) – now appearing on many online shopping sites - an App that manages the payment process with clear on-site messaging to consumers on different payment options (like instalments and financing) and then managing the backend authentication and banking for businesses.
“Video consultation, Virtual Try-On and Livestream Events are just some of the ways retailers have been adapting to improve the consumer experience while they shop in the safety of their homes.”
Word of mouth is still powerful
In this age of social media and online forums, customers share their experiences, likes and dislikes with their friends and acquaintances online – on Facebook, Twitter, Snapchat and Instagram. Retailers should have a clear social media strategy to cultivate their customer base.
A lot has changed since I started out in retail, working for Selfridges, Sears, Freemans and GAP, but even back then (eek we are talking the 90s) we were laying the foundation for online. Back then it was called Agency Mail Order and it transformed the Personal shopping experience and laid the operational groundwork for internet shopping. The pandemic has certainly accelerated behaviours but all the signs were there for Arcadia to follow well before Covid 19 came about.