On Wednesday evening, the German government announced the first steps towards easing the lockdown in Germany. As of Monday, shops with an area of less than 800 square metres will be able to open again in all federal states except Bavaria. Since Tuesday, shops selling articles for newborns and children have been open again in Italy. And also in Austria there are first steps to loosen the lockdown since this Tuesday. Smaller shops with less than 400 square meters of sales area as well as hardware and garden centers are allowed to open again.
In a quick survey conducted by our sister magazine TextilWirtschaft, 88% of the 213 executives from the fashion trade who were interviewed online rated the relaxation as positive. At the same time, however, there is a great lack of understanding for restricting opening permission to smaller stores. For example, 76% of those questioned say that the logic behind the decision as to who is allowed to open and who is not, is not conclusive. In the group of retailers with an area of more than 800m² the agreement to this statement was even 95%.
Although the first steps towards relaxation in the retail trade are a first sign of relief for those who are allowed to open, at the same time retailers who serve an area of more than 800 square metres find themselves at a massive economic disadvantage. It is also still unclear whether shopping centers in Germany are allowed to open from Monday or not.
The coming week will show how the retail trade is coping with the new situation. It can be assumed that in the short and medium term, sales will be far below the original levels, plus the question of how great is the desire to buy? Will customers come? The uncertainty in the industry as well as among end consumers is currently extremely high. Furthermore, as a retailer, at least in Germany, you should always be aware that there is a possibility that the easing measures could be reversed. In the current situation, day-to-day or week-to-week decisions have unfortunately become the norm. Even if smaller shops can reopen from Monday, under certain conditions, it seems all the more important in the current situation as a (smaller) retailer to prepare online.
We've talked to Derek Fridman, design partner at Brooklyn-based agency Work & Co, about quick measures and why it is necessary in these days to make a shift to digital commerce.
Look into alternative business models. Not a pivot, but an addition. Small retailers that succeed in the future will be more diversified, will have multiple avenues for revenue, and multiple platforms for how they sell their products. The Covid-19 crisis has been extremely challenging for retailers, but what it has taught us is that you cannot rely on just one channel, one offering, one revenue stream. Smaller retailers closed during this time should be asking themselves, "how can I service my customers in new ways?" and reexamine their methods for delivery, pickup, subscription, shipping, etc.
Should every retailer establish a web presence?
All retailers have been broadly making a shift to digital commerce in a world where more transactions are being done from web and mobile at shoppers' convenience. But when your doors are forced closed, online is the only way into your business — so it's never been more important. And right now, every retailer can benefit from having multiple front doors. A responsive web and mobile commerce experience paired with a smart SEO and content strategy are critically important for your retail businesses.
What additional features should a merchant consider on their website?
Three improvements can could help bolster retail businesses now are:
- Update your website to add more SKUs right to the homepage so customers can see the full breadth of their inventory in the absence of being able to step into the retail store.
- Consider bundling essential ítems that are most in demand, and making them incredibly easy to purchase with a single tap or click.
- Ensure you’re optimized for mobile as well as provide a range of options for delivery, pickup, curbside, or shipping.
What other options do I have as a retailer if a web presence is not the right thing?
Every business needs a way to communicate with your customers and build affinity to your brand. In a world where people are sheltering in place —and a return back to "normal" life is going to be very gradual, taking as long as a year— a digital presence is likely the only way to reach your customers.
What big mistakes can I make as a retailer when I open a webshop?
Overcomplicating your digital presence. Relentlessly focus to make one digital product successful while diversifying how to drive traffic, engagement, and ultimately conversion. It’s critical to test, launch, and iterate on an ongoing basis. Not thinking through the strategy for how you’ll drive traffic to the site. While you don’t necessarily need more than one digital product, you do need multiple ways to drive traffic. Start with your loyal customers but then build from there. This could include SEO, email outreach, social, and other customer-relationship management efforts.
From whom or where can I, as a non-expert, get tips when it comes to e-commerce or social media marketing? Without having to spend a large budget?
Nailing the right go-to-market strategy is critical but those large unwieldy budgets often come from exercises in long-term strategy without balancing the immediate needs to actually execute to put something in the market. Starting small and continually adding to your digital roadmap is a sound approach. Study the challenger brands who flipped the model (started with digital and not brick and mortar, to see what they are doing. Ex: Third Love, Daily Harvest, True & Co, Mott & Bow, Warp + Weft). These brands have already tested and learned the best tactics for commerce, so investigate them and learn from them.
Why is it so important in these times to maintain contact with customers?
Customers could be more willing to engage with you during this time, if the interactions are meaningful. Consider that many people and families are searching for both essential items their families need as well as ways to break up the monotony of their days. Retailers are uniquely positioned to offer both amid this global ‘pause”. It's also forcing businesses to re-examine their overall digital strategy to help shoppers. The likelihood of forging strengthened relationships with customers post Covid-19 and beyond is high.
Are there good examples of smaller retailers who are already implementing this well?
Smaller local retailers have been at the forefront of responding to the Covid-19 crisis by helping their communities with adjusted hours for the elderly, store customer limits, and forgoing the requirement to sign receipts. From a digital perspective, many — such as toy stores, bookstores and wine shops— were early adopters of order-ahead and curbside-pickup methods to continue meeting the needs of their customers. Dollars / square foot thinking that solely seeks to maximize the inventory on the floor will not be the measure of the success for B&M in a post-covid world. Use this time while you are closed to think through how you should change your floor footprint. Find ways to accommodate one-way traffic for safety, improve hygiene, or set up pop-up areas that help highlight new products.
About Derek Fridman
Fridman was born in Puerto Rico and has a degree in Visual Communication from the Art Institute of Atlanta. He manages design and user experience teams specializing in rapid prototyping and design for retail environments, new platforms and related experiences. He brings more than two decades of experience to the table, including at SapientNitro, Razorfish and in his own design studio. During this time he has applied his design expertise at Google, Warner Brothers, Under Armour, Disney, Adidas, Lucasfilm, AMC Theatres and the NBA. Currently, Derek Fridman is a design partner at Work & Co, a Brooklyn-based agency that has designed digital content, applications and physical spaces for clients such as Ikea, Havaianas and Planned Parenthood.