Lockdown 2.0 is upon us – what does that mean for retail? Today we take a special look at what the new look lockdown is likely to mean, as well as offering some insights and expert opinions on how to navigate these unusual times.
First up, the restrictions are going to impact different retailers in different ways, with those online pure-plays and many of the established omni-channel players able to draw on what happened last time round and act on that from day one.
Online retailers have already ramped up what they do over the past seven months and, with peak in the offing, they need to do more of the same. In fact, non-essential, online-only retailers are confident that they can weather the storm.
Those with an established online presence as well as stores may well be in a better position as they can leverage both to create a mixture of online delivery based services, as well as capitalising on click and collect offerings – much as Ikea is planning to do.
The downside here is that will it be enough to make up for the lack of spending that closing shops outright for at least a month in the run up to Christmas will cause? Probably not. It is also going to be hard for all retailers to compete against the supermarkets – they will be open and they can sell many things, both on and offline.
However, it isn’t all good news for the supermarkets however, either. Sainsbury’s today, for example, has cut 3500 jobs, primarily in deli counters and stand alone Argos outlets as it too recognises just how Lockdown 2.0 is set to change physical retail.
Other bricks and mortar retailers are also poised to see tough times. M&S is still reeling from the first lockdown, recording it’s first ever loss. The only saving grace being its Ocado deal (and the fact that as a food retailer as well as a clothes and homewared vendor, it can keep its stores open during lockdown).
Many of the high street only retailers – such as Primark – are going to have more difficulty. With stores closed completely and no or little online traction, they are in for a tough few months. The only ray of hope is that they may well be able to open up for longer hours post-Lockdown in the weeks before Christmas when pent-up demand is released.
Event’s such as Single’s Day and a general switch to cross-border trading are two things here that retailers can build on – but will it be enough to make up for what might be a lacklustre Christmas as cautious shoppers don’t spend as much as usual?
One thing is for sure, there will be a drive for heavy discounting to lure shoppers back into buying – online or in-store – now and post lockdown. Pent-up demand may be released when (if?) the lockdown is eased in early December, but caution will prevail.
