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A New Roadmap: How retailers are planning to revive their businesses

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2.0 is almost about to get over. There are clear indications that some pockets will soon open whereas some pockets will continue to remain shut. The retailers in green zone are gearing up to open their stores after getting a go ahead from the government.

A New Roadmap: How retailers are planning to revive their businesses

Speaking at a webinar organised by , , President-Retail, shared his thoughts on how retailers are preparing for the coming months, saying, “The challenge to the retailers would be to ensure that they adhere to the new safety norms because when it comes to consumerism, going ahead, health will be the big motto. We will be seeing very low footfalls coming in due to fear in consumer’s mind. Even as a retailer, if we get some footfall, we will have to see and ensure how we regulate the traffic coming in to the stores. Window shopping experience that we have been used to in malls is probably going to go away. We will have to see how we can use the tech-platforms in the best possible way to ensure that we keep on servicing the customers as per their requirements. We have not been thinking about shop by appointment till now but probably that is going to be the new norm apart from wearing gloves and masks at the floor.”

Adding to this, , Director, said, “Consumers will definitely be coming back to the salons within weeks of opening for essential services like haircut, colour, waxing and threading. But clearly there is a segment of business which is more of indulgence like treatment of hair, advance facials, which I think, customers will choose to differ till the time they get more comfortable with the way this is going.”

, Head – Retail Business, stated, “When you begin, business will be very minimalistic, but the decline will gradually reduce as you reach phase 2. Internally at Raymond, we have put it into 4 phases – complete lockdown, partial lockdown, moderate degrowth and high double-digit growth and after that actual growth.

“Organisations should start modelling various scenarios and that is the way to go forward. In our stores in Korea and China, the demand bounce back has been pretty rapid, it is better than what we planned for and what we expected but it is backed by promotions as well. Going ahead, it is important that every retailer plans small things for customers as they will still indulge in shopping because it is a form of recreation, people feel good when they shop and at the same time, they want to be smart with their money. Promotions will become more critical than ever in recovery plan,” explained , Managing Director- India, Sri Lanka & Nepal, .

According to , we have got the trends from China and we have seen that weeks after lockdown our business has reached to the level of 40-50 percent of last year. “I consider that there will be extremely low footfalls in the malls. The initial shoppers will be millennials going for revenge buying, discount seekers and bargain hunters and it will be extremely important for the malls and stores to set an environment of safety amongst the first shoppers who are coming in. If we are able to do it, the word of mouth will spread, and maybe more and more shoppers will be comfortable coming in.”

How Bright is the Future of E-commerce?

One of the trends that has been observed during this lockdown is that consumers have started opting for e-commerce and online deliveries since they could not step out. What will be the trend going ahead?

Talking about this, Kapoor said, “We have always been talking about a conflict between online and offline. This is the time to marry the two now and see that what are the benefits that we are going to get out of it. Online is going to grow because it is going to take time for the customer to start having the faith that they are safe, and they can actually move out but that is going to take time. Brands will have to learn how to get maximum from the minimum inventory, Discounts are not the way forward and how to use online to the best optimum way is going to help us.”

“In our business in China, online is growing at triple digit. We have to imbibe online as a way of selling and not as a different channel, it is not about online-offline, it’s about how we can use online to our benefit and the second important thing is to go omnichannel,” added Ghosh.

Will There Be an EOSS?

As soon as the lockdown gets over, the retailers are deciding whether they should go for an end of season sale or relaunch the inventory next year.

Sirrohi said, “In this EOSS, most of the brands will be entering into it from two perspectives, they will have two conflicting objectives – one objective is of releasing their cash fast and maximising the real value. This is in the context of the obsolescence of the category they are operating. Some brands are already planning to carry the range to the next season also so that retailers do not go for rampant discounting in the current season.”

“EOSS depends on how much inventory you are carrying, what is your urgency to convert that inventory into cash and what is your cost structure. The brands which can control their incoming inventory in the next 6-7 months would not go on a very high sale. Second, it will also depend on the speed of recovery. I expect margins will get diluted because of higher discounts and brands will use discounts to ignite demand,” opined Dhingra.

“In today’s scenario when the markets open up, sentiments will be down and if our competitors give discounts then we definitely are not in a position to lose market share and we will have to follow the same trend,” Ghosh stated.

How Mall Operators Are Going to Change

Malls have been shut. They are also equally stressed as they too have a lot of liabilities.

Kapoor said, “Together both retailers and mall owners will have to understand and appreciate the concerns that each and every one of us has. Going ahead, the reason for consumers going to a mall is going to change a lot, so malls will have to work it out with the brands to see how the footfalls increase. The brands will have to ensure that conversion rates are high, basket size is healthy and there are enough product representations and if we are able to get the business at 60 percent on track in the first couple of months then the confidence levels will increase and the partnership will go at a different level.”

Adding to this Sirrohi said, “If consumer’s purpose for going to a mall will change, so does the reason for a retailer to exist in that mall. Retailers and mall operators will have to find a new balance.

Advice for Standalone Stores

According to an industry report, 20-25 pc retailers won’t be able to survive 3 months of closures and lockdown. What is the key to survive?

“We have to ensure that we give that confidence to the customer that they come back again. Look for new technologies to support business and reduce cost to the bare minimum,” said Kapoor.

Dhingra added, “From consumer’s point of view, the need for looking good, feeling good, social interaction, focus on health and wealth with renewed priorities are not going to change and from the brand’s point of view – what will not change is – your reputation that you have built over a period of time, the trust in the processes that you have developed, the customer base that you have evolved over a period of time, the good people that you have in your system and your vendor support. Now, balance both of them together and figure out what is your re-engagement plan when the customers come back, for your employees and yourself.”

“Be brutally honest with your short-term realities, do not be over-optimistic about realities and then take adequate actions immediately. Divide your operations in short-term and long-term and last but not the least, simplify your operations as much as possible,” said Dhingra,