Do retail franchises and non-essential customer facing businesses need a new strategy? The challenge facing organisations which have been forced to close their doors during the latest lockdown, is that the past year has changed consumer buying behaviour. For many, such change may become permanent now they’ve discovered how easy it is to order and get deliveries through online platforms.
The questions businesses need to ask are: will customers still buy in person? Will footfall remain the same with recent liquidations (Acadia group & Debenhams)? Have customer requirements changed? Are my products still relevant (you have to remove your own biases here)? The fact is that it’s impossible to anticipate the long-term influence of the Pandemic on consumer behaviour but with the decline in the high street over the past few years, compounded by the COVID crisis, indications are likely that many have now moved online, forever.
One survey by Jones Lang LaSalle, and American real estate company suggests globally, 26% of people will continue home working after the Pandemic. Naturally, this will also have a knock-on effect. Less people will be re-fuelling, buying coffee on the move, visiting the sandwich shop near their office… This could spell the rise in local towns thriving over major cities.
This raises two questions. Firstly, how can customer facing franchises continue to build goodwill and keep their customers while they are closed to the public and secondly how can they protect long-term trading? The answer to both questions is that adjustments need to be made. When I say adjustments, for some franchises this may mean major change. It may mean developing new online products or delivery services. It may mean investment in technology to reach customers remotely. It will likely mean ramping up marketing and employing different promotional techniques too. It may mean taking on new staff with the right experience to make all this happen.
This all requires investment in both time and money. The Bounce Back and CIBLs loan schemes were introduced to help organisations borrow capital at low or no cost and the use of this sort of funding to pivot your franchise would be money well spent. However, planning, and financial scenario modelling is essential to create realistic cash flow forecasts and for a successful outcome. Modelling can be adjusted to different (and worst case) scenarios to judge affordability and to see if making substantial changes could offer a long-term solution.
If the past 12 months have taught us anything, it’s that we don’t know what the future holds. However, inaction and not responding to new purchasing patterns is likely to result in declining revenues or even failure. Therefore, by developing new and agile strategies to accommodate altered market conditions through scenario planning is likely to offer the best chance for long term business success.
At d&t our friendly, experience experts can help with financial and scenario planning. We are invested in the success of our partners and are always happy to provide strategic advice based on facts and figures. Don’t forget as one door closes another opens, so take advantage of the opportunities that are available.
For further information please visit www.team-dt.com
