As a result of Covid-19, two-thirds (60 per cent) of UK retail companies are overhauling their business strategies, with almost half (42 per cent) looking to invest in digital.
According to research conducted by Opinium and LiveArea, online commerce (62 per cent and IT infrastructure (53 per cent) will serve as the key components of retail investment. Agility will also be crucial, with almost half (45 per cent) considering outsourcing IT, and almost a third (26 per cent) the marketing function.
Retailers are being forced to make a leap to digital to avoid the very real possibility of collapse. The study showed the current situation could cause over a third (38 per cent) to close before the furlough scheme ends in October. While two-thirds (65 per cent) have stopped operating and 6 per cent have closed permanently, the impact of the pandemic is set to grow over the coming months.
Retail companies are most concerned about the drop in sales (66 per cent), followed by the end general economic downturn (61 per cent). In terms of measures to limit the impact, retailers most desire clarity (55 per cent) from the Government, followed by increased intervention and financial support, including access to grants and loans (51 per cent) as well as payment holidays (33 per cent).
“Covid-19 will have a lasting impact on retail. The pandemic has shone a light on the glaring vulnerabilities in the industry, from tight margins and weak supply chains to ineffective customer communication and delivery. In a post Covid-19 economy, the key to survival will be business agility,” Elliott Jacobs, EMEA commerce consulting director at LiveArea.
“No one will know the exact impact on consumer behaviour, so businesses need to build a strategy that can adapt instantly. Fundamentally, that means following a digital-first approach – developing the technology and culture to put online first. Those unable to make the shift are unlikely to see the end of 2020,” continued Jacobs.
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