As shops are set to re-open in England, what's in store for the retail sector and in particular SMEs?
This week, Boris Johnson announced that all non-essential retailers will be able to re-open in England from 15 June. The government have published guidance detailing the measures the retail sector should take to meet necessary social distancing and hygiene standards. This begs the question -"what does the future hold for the retail industry in the UK post lockdown?".
For many, shopping is a hobby. It is a sociable outing shared amongst friends and family. Bo Derek once said: "Whoever said that money can't buy happiness simply didn't know where to go shopping". However with social distancing measures in place, it is still possible to enjoy the art of shopping?
According to the latest RetailX Coronavirus Consumer Confidence Tracker, almost 90% of shoppers in the UK say they have reduced or stopped in-store shopping due to Covid-19 and 44% say that post Covid-19 they will continue to buy as they do now. Retailers will therefore need to react to the inevitable sea change in the way people will shop. This is where SMEs can come in. Shoppers do not want to lose that personalised shopping experience. SMEs are allowing retailers to think creatively by coming up with new ways for retailers to connect with customers as well as providing them with more customer friendly payment services.
Tech companies are now enabling consumers to spend more time engaging with brands as well as allowing customers to adhere to social distancing measures. Some brands are even gifting personal stylists directly to a customer's mobile phone. For example through augmented technology Tommy Hilfiger allows customers to superimpose clothing from their stores on to themselves using their phone's camera. Retail giants Amazon and Ikea are also using similar technology to allow customers to see how future items will appear in their homes through 3D models. Another way SMEs are enabling retailers to improve the customer's online shopping experience is through haptic technology. Haptic technology creates an experience of touch by applying forces, vibrations, or motions to the user. A good example is Fulu, a fingernail-mounted haptic interface which allows users to experience virtual and physical touch seamlessly and simultaneously. Customers will be able to virtually feel the texture of the items they are considering buying. Retailers have even ventured into the video game industry to enhance the customer experience. The luxury fashion e-commerce company Net-A-Porter has collaborated with Nintendo to create a new version of the extremely popular Animal Crossing. Fans are able to dress up their virtual avatars and retailers are able to show off their best styles of the season. Net-A-Porter have monetised this opportunity by allowing gamers to purchase the clothing and thus bringing the fun back into the hobby of shopping.
As a result of Covid-19, there has been a substantial shift from businesses only dealing in cash to now accepting card payments. Over the last two months, data from Google shows a 300% increase in online searches for the term 'contactless payment'. SMEs have been at the forefront of helping businesses adapt to changes like these and other challenges that Covid-19 brings. Here are four examples :-
- As we start to shop more locally and pop-up shops become more popular companies are testing software that enables mobile phones to double as Point of Sale devices.
- In order to save small businesses SaveMyLocal.org was created. It allows businesses to sell vouchers now, for products it will supply later – a simple voucher platform.
- Fintech companies have created loan application calculators to efficiently decipher what support companies are entitled to.
- Australian start up Safe2Pay enables customers to pay with a single text and allows them to wipe their shopping data after purchase. From a data privacy perspective, this is an extremely beneficial tool for retailers to keep customers comfortable and satisfied.
It is important for retailers to treat "the new normal" we are entering into with positivity and seek to capitalise on the opportunities it brings. Covid-19 has created the most volatile market conditions since the financial crisis in 2008 impacting IPO activity considerably. Perhaps the trend of companies staying private for longer due to availability of capital and attractive M&A opportunities will be strengthened in light of the public market turbulence. These opportunities provide great ways for retailers to improve and adapt their business, particularly from a technological stand point. One example is Findr. Forming commercial partnerships with fintech companies has been made easier by Findr. Findr has launched an artificial intelligence platform to simplify and accelerate the time it takes to form commercial partnerships. The aim is to help fintech companies to identify and connect with prospective retailers in hours with just a few clicks. The industry average is 12-18 months.
Covid-19 has created a radically new retail sector. Brands will need to rethink and reboot. Getting creative is the key to survival. Customers do not want to lose the shopping experience and as a result online experiences need to be just as, if not more immersive than physical shopping trips. Technology has made customers less patient and more expectant of a swift payment process. It is a good time for SMEs and larger companies to come together and help each other. SMEs need the help of large businesses and the help of other SMEs and equally larger businesses need the help of creative start-ups to survive in a new and exciting retail sector.