Keeping the Christmas lights on
A vaccine offers light at the end of the tunnel, but traditional retail is running out of matches fast. Virtualstock’s Tim Hay-Edie has some suggestions to keep the retail lights burning.
Pfizer has a real vaccine - which is great news - but we’re not realistically going to get it for six months. While we can start projecting a return to normal, we first need to save Christmas and get through the Winter. Or, like Hans Christian Anderson’s Little Match Girl, our days will be short, cold and numbered.
So, gather round, here’s a plan:
What to do about this seasonal headache? Think positives: on Friday 27th November we will still be under lockdown, so no stampede of customers fighting in your stores over wide-screen TVs. This year Black Friday is all online.
Like a chef at a hotel buffet, retailers should see this as an opportunity to dump slow moving stock. Identify the poorest performing SKUs taking up the most warehouse space, and clear it with web-only deals. With stores closed, retailers don’t have to fill shelves with this stuff. They can ship direct to the customer from the warehouse.
Working Capital Bonus
Once the warehouse is cleared do not re-stock. Wait! Now, more than ever, cash is king and the FD doesn’t want to lock it up in a DC. This isn’t to suggest retailers drop these SKUs or product categories all together. The choice is not to range, yes or no? The product ranging choice for buyers and merchandisers is core or extended? Extended range may have less margin and be therefore less attractive to the merchandiser, but once you price in obsolescence, shrinkage, insurance and warehouse storage, a slow moving stocked-in SKU is the working capital equivalent of a cold death.
Buyers and merchandisers need more incentive to work smart, and to see extended range as a viable alternative. Perhaps their Christmas bonus should include sales of dropship products they curate, and penalties for any stocked-in products that freeze up working capital. Easy for an FD to model for illustrative purposes, and then let’s see how things change in 2021?
While we will see a return to the high street in the final weeks to Christmas (post-December 2nd), many customers will be put off by the queues - made worse by ongoing social distancing requirements. Let’s face it, the experience will be more of a nightmare than ever - so expect most Christmas shopping, and the post-Christmas sales, to be online.
Contactless Click & Collect is a winner. Imagine driving into the retailer’s carpark, sending a text message to say what parking space you’re in, and waiting for your shopping to be conveniently delivered to your boot. You can see the advert now. I’m sold. Smart retailers are already doing it. Same for returns.
Smaller retailers need to partner up quickly and offer these options to their customers. And keep offering them beyond Christmas.
Meanwhile everyone needs to anticipate courier holdups and extra busy Customer Service. Hire extra cover, train them, run drills - these are the “gifts” you can especially count on this year.
A New Website is not just for Christmas
The new normal is ecommerce focused, with support from the high street or the retailer’s store network. This won’t change with a vaccine. Customers have been pushed online en masse and they are adapting well. To keep them coming back, your website has to win on customer experience. Navigation, product choice, product descriptions, images, availability, a clear returns policy, and yes those delivery options - these are all non-negotiable. This year the ecommerce agencies and UX practitioners are feasting by the fire.
Meanwhile our Little Match Girl has a limited product range, stock she can’t sell and a seasonal deadline. Sound familiar?