As a result of Covid-19, two-thirds (60%) of UK retail companies are overhauling their business strategies, with almost half (42%) looking to invest in digital.
According to research conducted by Opinium and LiveArea, online commerce (62%) and IT infrastructure (53%) will serve as the key components of retail investment. Agility will also be crucial, with almost half (45%) considering outsourcing IT – and almost a third (26%) the marketing function.
Retailers are being forced to make a leap to digital to avoid the very real possibility of collapse. The study showed the current situation could cause over a third (38%) [Q6(4):AY5] to close before the furlough scheme ends in October. While two-thirds (65%) have stopped operating and 6% [Q5:AY5] have closed permanently, the impact of the pandemic is set to grow over the coming months.
Retail companies are most concerned about the drop in sales (66%), followed by the end general economic downturn (61%). In terms of measures to limit the impact, retailers most desire clarity (55%) from the Government, followed by increased intervention and financial support, including access to grants and loans (51%), as well as payment holidays (33%).
“Covid-19 will have a lasting impact on the retail. The pandemic has shone a light on the glaring vulnerabilities in the industry, from tight margins and weak supply chains, to ineffective customer communication and delivery. In a post Covid-19 economy, the key to survival will be business agility,” says Elliott Jacobs, EMEA Commerce Consulting Director at LiveArea. “No one will know the exact impact on consumer behaviour, so businesses need to build a strategy that can adapt instantly. Fundamentally, that means following a digital-first approach – developing the technology and culture to put online first. Those unable to make the shift are unlikely to see the end of 2020.”