Which way the ship will lurch next is anyone’s guess, as the pandemic storm continues to batter retail… The news headlines are dominated by sensational retail stories.
One portfolio of previously dominant high street brands is in significant financial trouble. A business that in its heyday provided dividends to its owners of hundreds of millions of pounds, has gone into administration apparently unable to secure a loan of just £30M to tide it, and its 13,000 employees, over until the prospect of a Covid free Spring is realised next year. Commentators blame the fall from grace of the brands on the lack of adaptation to a new era of retailing that requires the development of effective digital channels.
Then as if to prove that retail in all its forms is a hyper-competitive business, and that reputation is no guarantee of future success online either, one of the dozens of the catalogue shopping industry quietly calls in the administrators amidst falling market share.
But the headline that got pulses really racing was an announcement by HM Government. Not the one that said it would allow last orders in restaurants at 10pm and people must leave by 11pm, thereby reopening the night time economy from the 2nd December in Tier 1 and 2 regions. No the announcement that bought a thunderous “thwack” reminiscent of the tail of a large orca playfully swatting the ocean surface was actually the sound of retailers’ jaws hitting the floor around the country in response to the news that Local Authorities would be asked to allow retail stores to open 24 hours a day for the rest of the Festive Season and into January!
The Government’s adoption of policy initiatives for retail and the pandemic has been like a group of tourists on a whale watching expedition. As the shout goes up “look over here” everyone runs to that side of the boat to see what can be seen. No sooner have they arrived than the call goes up from the other side of the vessel “No! Over here!” And everyone runs back. And on and on it goes, backwards an forwards.
It makes no sense. The Government continues to do everything in its power to stop people going with a national lockdown. Then under the Tier system grave admonishments are issued of the dire consequences that will beset the nation if any of our number dares to even hug a granny this Christmas, along with exhortations that we must “keep the virus under control.” Then the shout goes up that we are going to re-open the night time economy and provide late night/early morning revelry in the form of shops open 24 hours a day!
Doubtless when Robert Jenrick, Secretary of State for Housing, Communities and Local Government, made the announcement that he was relaxing shop opening hours throughout December and January and that Local Authorities should allow all shops to remain open for 24 hours a day, the Government thought it was creating a “try scoring opportunity” for retail. Unfortunately it may turn out to be a “hospital pass…”
Writing in the Daily Telegraph Jenrick asserted that the relaxation of rules allowing shops to stay open 24 hours a day in the run up to Christmas and January would “mean that your local shops can open longer, ensuring more pleasant and safer shopping with less pressure on public transport.”
What is noticeable is that, yet again, the Government is giving retailers no time to prepare for a fundamental change in the rules. They seem to think that all you have to do as a retailer is open the front door, get the shutters up and you’re good to go. We all appreciate that we are navigating difficult times and that the government is having to respond to changing conditions and advice. But to gleefully announce to retailers, with just 48 hours’ notice, that they can now open 144 hours a week instead of 54 shows a lack of a grasp of the details…
Of course on paper it looks like a good idea. We have ten weeks of shopping to do in three, so let’s open three times longer and everything will work out just fine. And lest you thought that such hours would only suit essential retail, clothing retailers have already been making announcements of their intention to open 24 hours a day, so that shoppers can get their fashion fixes, day or night.
However, there are going to be many challenges to businesses suddenly contemplating 24 hour opening opportunities with a staff geared up for a third of that. And of course staff, or their safety, is going to be a key issue here because of the Government’s own actions.
Pity the poor staff member trying to engage with a drunk to explain that they have to maintain social distancing in a queue and within the store. Or trying to reason with the inebriated shopper hell bent on trying on clothes in store and returning them directly to the rails. You don’t need to be Mystic Meg to predict violent attacks on staff could increase still further – especially given that the two areas most likely to precipitate conflict in a retail situation are when staff enforce the law and with aged-related purchases.
So beefing up your in-house security in order to protect staff and other members of the public is going to be a no brainer, especially when a Covid safe environment and alcohol are such unsuited bedfellows. However, there is going to be more to this than avoiding drunken brawls in the fashion accessories aisles.
Vast amounts of stock will have to be secured and controlled. And not just sales. We spoke last week of the tsunami of returns that is building up for when stores re-open courtesy of Black Friday, and the need for people to return unwanted items to store. Add to this the commercial imperative for absolutely barnstorming sales coming up to the end of the year, to make up for lost time (and the need to find rent for the fast approaching quarterly rent days), and you can expect to be packed to the rafters with stock – especially megabrands who will have so much old stock and seasonal stock to get sold it boggles the mind. That in itself is a significant burglary risk.
All of this means that staff to replenish stock is going to be at a premium. Staff availability will of course be diminished by the fact that many are isolating, although anecdotal evidence indicates that only 5% of those isolating go on to have a positive test result. HR will be under pressure to recruit. Staff will be asked to work longer hours. And whereas replenishment used to be undertaken throughout the night by just retail staff, now you have to contend with customers shopping 24/7.
Logistically bringing in that stock could be challenging. Last week we talked about the ease with which a surge in demand can lead to gridlock on your car park, industrial estate or even adjacent motorway network. However, local planning restrictions and traffic control may also create challenges.
There are parts of cities that can only be accessed at certain times of the day and with certain vehicles the suitability of which is linked to noise levels and pollution. Unfortunately these cities could be the most popular destinations for the overnight shopper. How will more vehicles get through restricted access? Also, from a logistics point of view, this will mean significantly more vehicle movements and the need to ramp up replenishment requiring more staff and more product and transport.
On the subject of transport, the Secretary of State emphasised that the measures were being introduced in part to take the pressure off “public transport.” Whilst that makes sense for late night opening, most public transport does not run 24 hours a day. So it is unclear just how big a contribution the additional time when both shops and public transport are open will make, especially when most retailers indulge in late night openings at this time of year anyway.
However, 24 hour opening will mean that you could have your car parks in use throughout the night, and that has to be good news – for every criminal gang. Because extended opening hours for your customers is going to be extended opportunity for ORC. Don’t think that throughout the night security can be slackened. If anything it needs to be more robust than in daylight hours because, well it is dark! If there is no transport people will bring their own vehicles and some of those will be driven by crooks.
Historically the Festive Season sees greater use of cash than at any other time of the year. Of course this is not a normal year and many retailers have been discouraging the use of cash for payments, even refusing them, on the back of a public sentiment that cash is “dirty,” despite the lack of scientific evidence to support such a proposition and the stony silence of a cash lobby that seemed to furlough itself as soon as the pandemic broke!
Cash may be cheaper to process than plastic, but it does have inherent security risks, especially when the stores’ front doors are going to be open throughout the night. Plus the physical movement of cash around stores, storage and collection all needs to be examined, especially in the light of an increasingly cash-strapped population and the recent running down of cash processing arrangements, both in store and for collections.
If you think that your cash collection company can simply ramp up to meet demand, think again. Cash collection and processing companies have long since reduced their operating costs through redundancy. And you don’t simply throw a new recruit the keys to the van and a map of the route! Ramping up supply requires training, security checks and preparation… just like retail.