Support for small retailers

Chosen partner of NFU Mutual

SUPPORT FOR SMALL RETAILERS CLOSED DURING CORONAVIRUS Expert insight to help your business survive and succeed

INTRODUCTION Every retailer is facing unprecedented challenges during this difficult time, especially those who have been forced to close during the lockdown.

Frank Woods, Retail Sector Lead, NFU Mutual

From the immediate pressures of cashflow and stock, to adapting rapidly to digital retailing, as well as creating a plan to successfully reopen, there are many plates that shop owners are having to keep spinning.

In this article, independent retail expert Clare Bailey looks at these three areas in turn, providing valuable guidance that could help you maximise the opportunity for your business now, and prepare for the weeks and months ahead.

MANAGING THE IMMEDIATE ISSUES: CASHFLOW AND STOCK These two factors are the lifeblood of a retail business, and many have had to face the reality of the tap being turned off overnight due to enforced store closures.

While this presents a major challenge, there are some ways that retailers can mitigate the impact during this time.

ACCESSING FINANCIAL SUPPORT As part of its plan to aid businesses during lockdown, the Government’s support package has several parts to it that you may be eligible to access: • The VAT and National Insurance/ Pay As You Earn payment holidays may give you some breathing space for a few months • A grant is available for any premises in receipt of Small Business Rates Relief or Rural Rates Relief, with extended support available to retailers in the higher rates categories • Business rates have been suspended for 12 months for many retailers • For those who are faced with the prospect of laying-off staff, you may be able to furlough them instead, with 80% of their income covered (up to a maximum of £2,500pcm) by the Government’s claim-back scheme until the end of July. From August, employers will be asked to pay a percentage towards the salaries of their furloughed staff.

• You may also qualify for mortgage holidays and business loans that can help relieve the pressure.

Information on what’s available and how to access it is updated via the Government’s business support webpage, so you may wish to check the site regularly.

GUIDANCE FROM TRADE BODIES For some, the grants, deferral of VAT and payroll costs may be enough to secure them financially for a few months.

Organisations such as the British Retail Consortium (BRC) and British Independent Retailers Association (BIRA) are lobbying Government to extend support packages if businesses are forced to remain closed longer than originally planned.

In addition, BIRA are offering retailers free membership for 3 months, which means they can access packages of support and advice including HR issues and Health and Safety guidance.

STOCK ISSUES Another issue many retailers face is the inability to sell stock they’ve bought for the 2020 spring/summer season through traditional channels. If unsold, that stock will either tie up cash until it can be remerchandised in 2021 – when it may not be needed – or it would have to be discounted as out-of-season. We’ll look more in depth at maximising the value of this stock in the ‘Going Digital’ section of this article.

Some retailers may also have committed to purchases that have not yet been delivered.

In this case it’s worth speaking to suppliers, who may be happy for you to defer or even cancel orders. By opening the dialogue, explaining your position, and asking what can be done, you may create new opportunities that support your business plans.

PROACTIVE STOCK LEVEL AND SUPPLIER MANAGEMENT When you’re closed, in preparation for reopening, it’s important to take a fresh look at your stock profile. As customer buying habits have changed over the last few months, the demand that you will see

post-lockdown is unlikely to match what you might have expected in the past, and your EPOS data – should you use that – needs to be viewed cautiously.

You may also want to use the time to review your suppliers more broadly. It’s an unfortunate fact that some businesses within your supply chain may have ceased trading permanently or have had to make big changes to their operation.

Having a clear view of this ahead of reopening will put you in the best position to trade, filling any gaps in your stock or supply chain that would otherwise cause you issues in meeting customer expectations.

GOING DIGITAL While some may have dipped their toe in the waters of bringing their business online, now is the time to take it seriously.

During lockdown, many consumers have been forced to move into the digital space, and now have the devices and knowledge to buy online.

As such, retailers who are well prepared for this change in buying habits are likely to be in the best position to grasp the opportunities.

Here are some things to consider before going digital: 1) Tone of voice: you want this to reflect what your business stands for and its values 2) Choose your channel: there are so many digital channels to pick from. The best place to start is to think about where your ideal customers socialise in the online world 3) Think about what you want to say: your content should connect your customer to your products and expertise. For example, fashion retailers could talk about how clothing trends have changed, or if you sell technology, you could do online tutorials on issues related to increased working from home.

By creating material that grabs interest and adds value to the customer, they’re more likely to remember you over the competition

4) S tand out from the competition: you could do things like Q&A sessions with customers, online surgery sessions, and, if you’re confident with technology, you could even do live streams, webinars or podcasts. However, remain consistent in your messaging, keep it relevant and authentic, and avoid coming back to sales-driven product messages. The primary aim of this kind of content is to build a connection with your brand, which is more valuable to you than a quick sell.

ONLINE RETAILING The second part of going digital, and key to driving sales, is to sell online. Before you create a web-shop or an online marketplace, you need to think about the practical and operational aspects of trading: • H ow you’ll receive and process orders?

• H ow you’ll process payments?

• What

is the pick, pack and despatch process?

• How

you’ll manage customer enquiries and complaints handling?

• How

you’ll process returns and refunds?

• What

should you charge for shipping? Do you need a minimum order to make it cost effective?

• H ow will you manage and protect both yours and your customer data?

The plan that you build based on the above doesn’t have to be an elegant solution. It just has to work and offer the customer a seamless experience.

Depending on the scale that you’re aiming to work at, you could choose to start small, just by selling to known customers through social media.

Alternatively, you could choose to invest in a more comprehensive solution that delivers you ecommerce, integration to marketplaces (e.g. Amazon, eBay, Gumtree or Etsy) and integration to EPOS. Naturally, that’ll take longer and cost more, so it’s important to go for a solution that meets your specific needs. Many opt for a more immediate approach, evolving over time.

Whatever you do, if you want to generate maximum potential from the stock you have in stores, then you should get into ecommerce as soon as possible. If you already are, then make sure you investigate all options available to you, leaving no stone unturned – including checking your business insurance covers you for any changes.

It’s forecast that online sales will grow by 50% during 2020 and will contribute to around 30% of all retail sales (compared to 20% currently), so by having an online presence, even after reopening, you’ll have a greater opportunity to increase your overall sales.

PLANNING TO REOPEN At the time of writing, it is hoped that shops classed as non-essential will be permitted to open from the beginning of June as long as Coronavirus rates are under control. With this phased re opening, there are things you can do to prepare your business to be as ready as possible for when the time comes. By getting these plans in place, you can focus on converting passing footfall into browsers and buyers.

You can also concentrate on maximising sales of profitable lines and other important business performance measures.

PLAN YOUR KEY SEASONS Get on the front foot by thinking about your main promotional opportunities for the next 6-9 months. These will be needed to get customers back into your shop.

If the country starts to return to business as normal in the latter half of the year, then with schools back in September, Halloween, Bonfire Night, Black Friday, and the run up to Christmas and New Year – there could be multiple opportunities for eye-catching window displays, special deals and themed products.

When thinking about promotions, use everything possible to grab the attention of passers-by to get them into your shop. Work with your suppliers to seek support with promotional materials such as posters or front of store display units.

You could also speak to them to see if they have any flexibility for planned AutumnWinter season purchases.

CUSTOMER POINT OF VIEW When it’s safe to return to your shop, consider reviewing it from a customer’s perspective. Think about the kerb appeal, signage, window dressing, cleanliness, presentation and layout: •W ould you feel compelled to walk in to your shop?

•W ould you know in a blink of an eye what kind of shop it is?

•W ould a browser be able to easily identify product categories in your shop?

•C an they easily find pricing, offers and deals without having to ask for assistance?

•C an you ensure social distancing is maintained?

•H ow can you visually reassure customers that you are following good cleaning and hygiene practices?

If there are any barriers to the customer experience, think about what you can do to remove those, giving your shopper a more enjoyable experience that leads to increased dwell time, spend, and ideally, repeat business. Implementing the changes that you couldn’t get around to before the store closed is likely to benefit you whenever you can reopen.

REVIEW YOUR BUSINESS PERFORMANCE You also have the rare opportunity to conduct an in-depth analysis on the performance of your business. Which products sell most by volume? Which are most profitable? You might want to maximise the depth of your best ranges or increase the space allocated to those items that are most profitable. Perhaps it’s time to put the items that don’t add much value to your business into clearance.

If you don’t have EPOS to help you manage your data and business insights, you could start looking into what options you might want to use in future. Alternatively, you could begin to look at which of your business processes could be improved without major additional costs.

TRAINING AND STAFF WELLBEING Whether you have furloughed staff or not, you may need to do some refresher training with them before reopening. In particular, if you have added new digital channels, or put extended measures in place to protect staff and customers, these will be a priority.

Whilst there is still uncertainty about when restrictions will be lifted, staff may feel

concerned about their future job security, so maintain regular contact, reassure them, and ask if there is anything you can do to help.

Larger companies can support staff with mental health concerns such as stress and anxiety, whereas smaller companies don’t necessarily have that resource. However, there are organisations that can provide this support free of charge. BIRA’s Coronavirus related advice may help address some of these concerns, and the Retail Trust charity runs a free and confidential helpline for all people in retail.

REOPENING WHEN IT’S SAFE AND RIGHT FOR YOUR BUSINESS Finally, you need to also consider the benefit of reopening, even if restrictions are removed. Switching on the lights, heating, staff and stock all increases the underlying bills. If there is little or no footfall, or if no one is spending money, you may have to question if it’s worth it.

However, if you do decide to reopen then use all your local knowledge and think about the guidance in this article, as you’re more likely to reopen successfully on a schedule that fits your business’s circumstances.

CLARE BAILEY, FOUNDER OF THE RETAIL CHAMPION Clare Bailey is one of the most well-known and respected retail experts in the UK. With unrivalled knowledge on retail, high streets, and consumer matters, she offers unbiased, independent guidance to help retail businesses succeed.

SUMMARY: MANAGING THE IMMEDIATE ISSUES CASHFLOW AND STOCK • Research your eligibility for financial support from the Government.

• Regularly check in on guidance or support available from trade bodies such as BRC and BIRA. • Manage your stock holdings, orders and suppliers proactively, taking into account any changes during Coronavirus.

GOING DIGITAL • Reconsider where online trading sits in your prioritisation – the lockdown has significantly shifted customer buying behaviours.

• Produce a plan that will enable you to promote your brand now and when you reopen.

• For both elements, consider the operational aspects carefully and only go for solutions that you have the ability to run and that fit your business’s needs.

PLANNING TO REOPEN •U se the time to prepare for key commercial seasons coming up over the next 6-9 months.

•C onsider how to make your store as attractive and easy to navigate as possible when you reopen.

•R eview your long-term business performance to see if any changes can be made.

•E nsure staff are clear in the service and hygiene expectations, particularly any new or altered processes.

•S tay aware of your staff’s various concerns, and source support to help them.

•C onsider when’s best to reopen for your business once restrictions are lifted.

To find out more about how we use your personal information and your rights, please go to nfumutual.co.uk/privacy To stop us contacting you for marketing write to Marketing Department (Do Not Contact Me), NFU Mutual, Tiddington Road, Stratford upon Avon, Warwickshire CV37 7BJ or contact your local agency.

The National Farmers Union Mutual Insurance Society Limited (No.111982). Registered in England. Registered Office: Tiddington Road, Stratford upon Avon, Warwickshire CV37 7BJ. A member of the Association of British Insurers.

For security and training purposes, telephone calls may be recorded and monitored.

BRO-RETCL-0520