A restaurant can have the most splendid fit-out and great food, but fail to attract patrons back if the service is lacking. On the other hand, a restaurant with not-so-spectacular surroundings or food can generate repeat custom and recommendation to new customers if the hospitality is exceptional. There is much debate about what retailers can do to win back customers, rebuild sales and earnings and secure sustainable growth post Covid-19. The crucial ingredient for success is the people who work
who work in the stores: not just the service they provide but also their hospitality and their positive, enthusiastic connection with customers. A surge in sales as the retail industry has progressively re-opened around Australia has convinced some retailers it’s business-as-usual. But the reality is that the retail industry will not go back to its pre-Covid-19 norms. The economic fallout of the pandemic has expanded fault lines that were already evident in the industry and also created new ruptures that are forcing changes to business models, the use of technology, store location strategies and concepts and marketing. Christmas trading for 2020 will likely be robust as consumers intend to spoil themselves and their loved ones after a horrid year. However, 2021 looms as another challenging year for retailers, with consumer spending likely to tighten from March onwards, albeit headline figures will look positive cycling against the Covid-19 sales decline. There can be little certainty around the value of the Australian dollar with global and domestic financial moves, and an unresolved Australia-China trade imbroglio could adversely impact supply chains. Ongoing safety protocols for post-Covid-19 trading will add to operating costs and, along with changes in tenancy mix and vacant shops following closures, perhaps even skew customer traffic patterns or attraction. With pressure on sales for bricks-and-mortar locations, occupancy costs will remain a key issue, continuing the trend for retailers to close underperforming stores and reduce their store networks. The retail lockdowns of 2020 certainly accelerated the growth of online sales and much, though not all, of the sales and market share online vendors realised this past year will be retained. There is no shortage of advice on how bricks-and-mortar retailing can reset and rebuild sales, market share and profitability. There are recommendations on store upgrades and technology innovations, including data harvesting of spending patterns for marketing, buy-now, pay-later financial services and new transaction technology options that claim to improve the customer experience. Let me go back to the customer experience at a restaurant. The most important aspect of the customer experience is the staff member who interacts (or doesn’t) with them in the store. The staff member is the most influential factor in determining how much the customer spends and whether or not they will come back to the store in future or recommend it to other potential customers. I used to tell retailers that I was wearing an invisible sign whenever I walked into a store and asked them to guess what it said. There were four words: “Make me feel important!” No matter who the customer is — baby boomer, gen X, millennial or gen Z — they all want to feel important, and they are all responsive to a positive and enthusiastic person assisting them. Those customers can get the shop fit-out bling, the tech wizardry and almost certainly the same products sold at another store or online and maybe at a lower price. They also often know as much or more about the product as the person assisting them in the store, underscoring that the crucial customer experience element is the quality of the engagement with the salesperson. The trick to ensuring success when facing challenging conditions and fierce competition is to employ positive and enthusiastic staff who are proud of the company and are rewarded for their skills. Interestingly, when the first Covid-19 lockdown started, a customer came into my coffee shop and offered to pay $50 for a cup of coffee. My coffee shop is one of five on a shopping strip. Its decor is not as flash as its neighbours, and the coffee is no better, but this customer valued the hospitality so much they wanted to make sure it survived the lockdown.