The Impact of the Pandemic on Independent Retailers

Created: Thursday, February 4, 2021, posted by Geetesh Bajaj at 10:00 am

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By Daniel Whytock, Down Your High Street

From the start of the Covid-19 pandemic, independent retailers have been dealing with enormous challenges. The first lockdown, when non-essential stores closed for the first time, had a huge impact and the changing levels of restrictions since then have added to the burden that independent retailers are dealing with.

Let us look at the changes that Covid-19 has imposed and also some positives that have emerged for retailers from a difficult situation.

Impact of the Pandemic
Image: Jump Story

The “Promise” of the first lockdown

That first UK lockdown was intended to be the only one. It was sold to everyone including retailers, as a way to stop the virus. It was thought that Christmas would be the saving grace for the retail sector.

All retailers were instructed to implement Covid-safety measures, to help control the spread of the virus. Again, part of the plan so that things would return to normal later in the year.

Independent retailers up and down the country implemented the Covid prevention measures as best they could. They restricted customer numbers in their shops and tried desperately to get customers to follow social distancing measures and to wear face masks when in their shops. The British Retail Consortium (BRC) reported abuse levels more than doubling, to over 420 incidents a day, both verbal and physical. All because the British public didn’t want to follow the rules the retailers were being instructed to implement.

The burden was placed on the retailer, and the public’s refusal to abide by the rules has led to the need for another lockdown and retailers having to close their doors.

The impact of furloughing

When the government’s furlough scheme was introduced it was welcomed. The funding has provided a lifeline to many retail businesses. Independent retailers were able to avoid making their loyal staff redundant but in most cases ended up multi-tasking and trying to do too much themselves. As a result activities such as their marketing suffered.

However, it wasn’t all doom and gloom. Some of our customers didn’t take any furlough funding. They adapted quickly, going online. The staff started taking phone orders and also took on packing and shipping of phone/online orders.

The consumer’s Covid mindset

One very important aspect of the consumer mindset since the start of the pandemic has been virus-consciousness. Even when the first lockdown came to an end, many shoppers stayed away from our high streets, worried about catching Covid-19. According to a recent report, 20% of people say they’ll never return to the high street to buy clothing. Online shopping increased by more than 60% in the first five weeks of the lockdown, but in July (2020) online sales dropped by 10% when people were allowed out again and took advantage of the opportunity to shop in person.

It is hard for independent retailers to know what will happen next so they are in a bind. They have invested heavily in Covid protection measures; money that they won’t see back and, many consider, to have been wasted. And, as the pandemic has continued, they’ve had to be more lenient about the flouting of social distance rules or risk losing that trade. Desperation makes people do things they don’t want to do. No retailer wants customers to catch the virus, but no retailer wants to go bust either – or end up in a fight with a customer.

Other threats to independent retailers

1. Landlords

Not every landlord is taking a hard line and demanding the rent that is due. However, although the government is protecting retailers from being evicted, and some landlords are have even offered rent discounts, the amount that retailers owe will keep increasing.

2. Suppliers

Of course, independent retailers need to pay their suppliers. There is no argument about that. However, some suppliers are demanding payment, with penalties for late payment being applied increases being applied. Before getting to this stage speak to your suppliers. You may well be able to agree on mutually acceptable payment terms.

3. Excess stock

Inevitably product is moving off the shelves much more slowly.  This means that independent retailers have enormous about of cash tied up in stock. This is hampering their ability to pay their suppliers and themselves.

To free up this cash, alternative channels such as online sales are needed. And for some retailers, particularly those with seasonal products such as fashion, discounting may be necessary.

Positives for the retailers

1. Buying local

One ray of light from the pandemic is a “use it or lose it” realization. The media coverage of the pressure and then EU-funded support programs (via local councils) to promote “Shop Safe, Shop Local” campaigns, has increased the number of people buying from small, local, independent retailers and businesses.

2. Vaccines

The recent announcements that vaccines are tantalizingly close will provide hope. Just how long it is before people are immunized, and then go out shopping again, will have a big influence on how many retail businesses survive.

3. Online support

E-commerce platforms, such as Shopify and Wix will help retailers to get online. They are free to start with, with fees only due when trial periods end. DownYourHigStreet, as an e-commerce platform provider, has removed its monthly fee for all new customers. All they pay now is a commission of 15% on their sales.

4. Peer pressure

In the short term, retailers still have to deal with the people who refuse to follow the social distancing/face mask rules. Early on, many people (when with friends) thought it was “cool” to rebel. As more and more people are impacted by Covid, we fully expect peer pressure to get these people toeing the line.

5. Touch and feel

Shops are never going to go away, particularly in parts of the retail industry where touch and feel are important to shoppers. The fashion industry particularly will benefit from this. You’re never quite sure whether something will fit and be comfortable when you buy online.

6. More disposable income for some

Whilst many people have seen incomes drop, or disappear, others have seen their disposable incomes increase. No commuting and fewer trips out to pubs, restaurants, and cinemas mean bank balances are higher. This money is now starting to be spent. For example, The Opal Picture Framing Gallery in Purley, south London, is enjoying record sales as people have more disposable income.

7. Loyalty and interaction

Humans are social animals. We need to interact, and we respond positively to loyalty. Customers enjoy it when retailers recognize them and provide loyalty benefits. Retailers should love loyal customers and make a point of going out of their way to keep them.

Loyalty, however, isn’t an offline-only feature. Online loyalty programs are provided by many companies, such as HTK. By collecting customer data and combining it with their purchase data, retailers can encourage more sales through personalized communication and offers.

The option available to independent retailers – adapt and evolve

Back in 1909 Selfridges made the step-change in retail. The Covid pandemic is accelerating another step change: the move online.

With figures showing a 60% increase in online sales during the first lockdown, online is clearly the route forward. We don’t mean that all sales should be switched online; bricks and mortar stores are still an important part of the economy. Although we help independent businesses to sell their products online, our one stipulation is that they have their own physical ‘high street’ store as well. can either integrate with the shop’s own website or provide them with the online sales tool they need to compete. A door that is physically closed does not have to mean that sales have to close too.

The pressure of Covid on independent retailers isn’t going to go away anytime soon. People are talking about Easter as a target date for normality. If people follow the guidelines, and the vaccines are released soon, we may see normality by then. But I think it’s an optimistic hope. The legacy of all the pressures we’ve discussed here will, however, continue to hover over many thousands of retailers for years to come. Those independent retailers who do adapt, who do take advantage of people’s willingness to shop online will get back to something approaching a ‘normal’ business sooner than others.

Daniel Whytock

Daniel Whytock is CEO of DownYourHighStreet, a free to join, low commission online marketplace on a mission to create the world’s longest high street by connecting the community with commerce and giving the Great British High Street an online presence. DownYourHighStreet hosts thousands of products that were previously unavailable online, from 100s of independent retailers, allowing sellers to create or integrate their online presence saving them time and the costs traditionally associated with establishing a visible online presence.

The views and opinions expressed in this blog post or content are those of the authors or the interviewees and do not necessarily reflect the official policy or position of any other agency, organization, employer, or company.

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