While Australia has quelled the pandemic far more effectively than many global nations, every additional case and snap lockdown is evidence that the situation remains volatile. That’s the case industries-wide and nationwide, but few have felt the impact more keenly than the retail industry, which relied heavily on the recently-concluded JobKeeper payments.
The scheme was a crucial lifeline for tens of thousands of retailers over the last 12 months, providing the financial safety net above which they could survive and respond, innovate and grow. That innovation, as well as their resilience and fortitude, will be tested again as many come to terms with the end of JobKeeper. Indeed, economists forecasted that as many as a quarter of a million jobs would be under threat when the scheme ended.
It’s a daunting situation, but by implementing short-term, actionable strategies and longer-term growth plans, retailers can begin to alleviate their financial concerns and set their sights on growth in the retail spring.
Short-term cash flow
Cash flow is rarely far from retailers’ minds, but the concern is particularly pronounced these days, especially for those that relied on JobKeeper to stay open and operational when their income slowed. Cash flow, the movement of money into and out of your business, must be an essential focus during these initial months, but can be improved by a commitment to the basics, reducing costs and incentivising loyalty.
A great first step in easing current financial pressures is ascertaining which costs can be cut. For example, is there unused office or warehouse space? Can you ease your expenditure on PPE now that masks are no longer mandatory? Look at your expenses, particularly significant ones, and determine whether anything is non-essential and can be cut – even temporarily. Reassess your engagements with suppliers, either with the view to lower costs or implement more cost-effective services or agreements
While it’s important to have a close eye on the cash flowing out of your business, equally so is ensuring there’s money coming into it too. Flash sales can help increase revenue quickly, promotions are a proven way to drive traffic and sales, and loyalty schemes can boost retention and conversion rates. Be savvy about your offers, though, and don’t approach them with a one-size-fits-all policy. For best results, run promotions and targeted communications that are tailored to each customer’s behaviour and purchase history.
Developing a real time view of what’s happening in your business is crucial. Software that keeps a close eye on finances and forecasts what the future will look like can help you identify, then mitigate, potential issues before they develop.
Long-term strategies
If your short-term strategies are predicated on survival, longer-terms strategies are focused on growth, using the solid foundation you’ve built over the immediate weeks and months. Long-term success is dependent on adapting to the behavioural changes that have accelerated during the pandemic.
Embed digital transformation into your long-term strategies to gain a competitive advantage. A deeper understanding of customer data, for example, and what to do with it is critical for personalised shopping and omnichannel retail – two key focuses in the retail spring.
Trends from contactless pay and click and collect to video styling and social media shopping boomed in the pandemic. If it worked for you, scale and optimise it. If something isn’t working, try something different. For example, while there might not be the same demand for hand sanitiser or face masks, cash use has plummeted as people prioritise contactless options. Businesses should always be open to delivering the products and services that shoppers demand, from the research phase to point of sale.
If one thing was born out of the pandemic, it was a culture of innovation – don’t lose this. While the worst of the pandemic appears to be behind us, retailers must utilise the lessons they learned and implement the short- and long-term strategies to offset the conclusion of JobKeeper and grow in the retail spring.
Gordana Redzovski is vice president for Asia Pacific at Vend.