Retailers must get set for London 2012 economic boost or risk missing out, research suggests

Retailers must get set for London 2012 economic boost or risk missing out, research suggests

Retail research published today points to widespread optimism about the London 2012 Olympic Games. But almost a third of retailers are ignoring lessons of the Vancouver 2010 Winter Olympic Games, it has found.

Despite the tough economic outlook, retailers are looking forward to the London 2012 Olympic and Paralympic Games, with nearly two thirds (64%) expecting a much-needed boost to their sales, according to new Race to the Line research published by BT.

However, despite the retail sector being one of the most directly affected by the Games, it said over a third (34%) of retailers run the risk of not capitalising on the economic opportunity by making basic of preparations such as plans to deal with staff absenteeism or adapting their delivery schedules.

Weighing advantages with challenges

The study, conducted by Vanson Bourne in October 2011 on behalf of BT Global Services and BT Business, surveyed 1,200 organisations of varying sizes nationwide across all sectors. It found that businesses had a generally positive outlook for the Games despite tough economic conditions.

One in six retailers were anticipating increased demand from customers, while nearly half (47%) were expecting to capitalise on new international business opportunities both during and after the Games. In response, the research found the retail sector is set to be one of the strongest in offering new employment opportunities, with 32% planning on expanding sales capacity and 40% of retailers planning to hire extra temporary staff.

While the predicted extra million extra visitors is a major opportunity for retailers across the country, the majority (84%) had concerns about negative knock-on effects. Issues like unpredictable dips or surges in demand, staff attendance and employee productivity were among the top concerns.

Ill prepared for increased capacity

During the Games, maintaining high customer service levels will be critical, yet only 28% of retailers are planning to increase call centre capacity and only 10% plan to enhance multilingual facilities, which could see missed sales opportunities from international visitors.

The survey revealed that staffing will be a key challenge for retailers, as they strive to cope with increased footfall in some areas. Worryingly, it found over a third (34%) had no plans at all to prevent or reduce the impact of lower staff numbers.

A further 41% of retailers said they believed the unpredictability of dips and surges in customer demand will be another challenges and nearly a quarter (23 per cent) are planning to enhance their supply chain management.

Despite this, only 14% of retailers had introduced new systems or technology that will enable them to manage their supply chain in a more flexible way. Additionally, only 11% said they were planning to collaborate with other retailers or logistics providers to share loads or delivery spots, which could ease the pressure.

Learning from Vancouver mistakes

BT warned that such issues could be a real threat to hopes of a business boost, particularly given the results of its previous research on the Vancouver 2010 Winter Olympic Games, which found that roughly half (49%) of the companies in and around the Canadian city felt they could have done better from the event or had missed out on business opportunities.

Baroness Jo Valentine, chief executive of business membership group London First, said: “London 2012 will present many opportunities to boost economic recovery and a great deal of planning has gone into providing support for business of all sizes, as well as information on how to minimise disruption. There’s still some work to be done but I would urge businesses to talk to their suppliers and customers now so that they can be sure of being ready to make the most of this fantastic event.”

Emer Timmons, BT Global Services UK president, added: “Despite the tough economic climate, we can tell from our own customers that London 2012 presents both challenges and opportunities for retailers. But success or failure depends on how ready they are. There’s still time to get plans in place, but with less than seven months to go, we do urge all organisations to begin preparations now or miss out on the economic benefits.”