What problems are waiting for UK retailers preparing to reopen

What problems are waiting for UK retailers preparing to reopen on 15th June?

Many Britons were perhaps hoping to be out and about by the 1st June, but alas, whilst there has been a noticeable relaxation of social distancing restrictions, it is still far from business as usual. The good news for retail is that, after twelve weeks of lockdown, non-essential stores will be allowed to open from the 15th June. The bad news is of course that it is not as simple as pushing the shutters up.

The problems facing stores opening for the first time in months

UK retailers prepare to hold old stock

Which stores should retailers open? Firstly, it is evident that the majority of stores won’t all open at once. The British Retail Consortium announced this week that one of its members will only be opening 25 stores out of several hundred on the 15th June, John Lewis has not ruled out permanent store closures, and less than 40% of Debenhams will open. With UK borders restricted and tourism subsequently low, the flagship stores on Oxford Street and across London have no doubt suffered a drop in foot traffic. Many consumers have also swapped their London offices for home offices, no doubt compounding to the idea there will be considerably less footfall to the city centres.

How will consumers react to stores opening? Just because the non-essential stores are open does not mean consumers will flock to the shops. Germany experienced a sudden spike when they reopened, but footfall rates quickly dropped by 60% compared to 2019. China also still has a 60% reduction in footfall YOY in the city centres, with an 80% drop in the provinces. Consumers are no doubt health-conscious and it would not be a surprise for shoppers to not want to risk catching the virus for the sake of clothes shopping.

Which stores are well stocked? It is estimated that around 20% of apparel stock will need to be held until next year as a fashion season has basically been skipped during lockdown, leaving stores with outdated items filling their shelves.

Which stores are capable of social distancing? For the retailers predicting footfall will be higher in the suburbs, where people are working from home, the stores may not be big enough to implement safe social distancing measures. The cost of reopening a store, complete with PPE equipped staff, disinfectant, Perspex glass, and more may not be worth the revenue it would bring in.

Footwear will be severely impacted by 72 hour quarantinesHow should retailers handle in store returns and fitting rooms? It is being recommended that retailers quarantine clothes for up to 72 hours. This means all returns and items tried on by customers need to be kept away from the rest of the stock. Retailers will need to know which stores have enough products to allow for a 3-day quarantine period. Footwear has probably the biggest problems. Customers will want to try on shoes before purchasing, a process that can take a few attempts, which may lead to hundreds of pairs of shoes quarantined and unavailable for sale at any one moment.

Which staff do retailers bring back from furlough? Around 45% of operational costs are labour and as a result 80% of retailers surveyed by Retail Economics had used the furlough scheme to keep their businesses afloat. The question for many retailers will be which staff are healthy enough to return to work, are there enough key staff available, which departments should be prioritised for return, and do the available staff match to the most desirable store opening locations?

A quick update on some of the carrier service alerts this past fortnight

delivery man wearing a face mask carrying boxes

APG – The majority of APG Services are running without delays or disruptions, although there are storage surcharges in Australia, Germany, New Zealand and the US.

Colissimo & La Poste – “On June 4, local media sources indicated that postal workers with the Sud-PTT trade union conducted a walkout at the La Poste distribution center in Marseille over the non-renewal of fixed term contracts. Further operational disruptions at the center are possible from June 8.”

Deutsche Post – Monaco, Italy, and Moldova remain the only lanes and regions that Deutsche Post are experiencing delays in delivery. However, many parcels will be returned to sender if being shipped to North or South American or Caribbean countries.

DPD – A number of DPD’s Pickup shops will reopen from 8 June following the latest government guidelines. The number of shops open will mean that 75% of your customers will be within a short drive of a Pickup shops.

New Zealand Post – An external service supplier will action maintenance work on 7 June 2020 between 9:00 and 10:00 (local time). International label printing in Parcel Label API may experience some disruption during this window although all other services will be functioning as normal.

Parcelforce – Due to unprecedented demand in their network, the next available ad-hoc collection date you will be able to book is for Tuesday 09 June 2020.

UPS – Drivers will not be accepting cash payments in Belgium. UPS in China and Hong Kong SAR have enacted a weight limit per customer that changes daily and all agreed pricing is only applicable to amounts below this daily limit.

We will be hosting a third in series live webinar in upcoming weeks time.The webinar will prepare retailers for life after COVID-19 as well as provide our usual in-depth carrier service update; the date and time will be confirm next week!

Email luke.toudup@zigzag.global to register!