Could necessity be the mother of all reinvention? Barry Dudley writes in The Drum

30th April 2020

Who’d be in retail right now? While online vendors such as Amazon prosper (at the time of writing, the company is making $10,000 worth of sales a second), times for ‘brick and mortar’ shops have been – to put it mildly – torrid these past few years. Now, with the world enveloped in a Covid-19 pandemic, the going has got even tougher.

Some retailers, many of them familiar high street names, have gone under – Laura Ashley being a recent one, with Debenhams, Oasis and Warehouse all teetering on the edge. In business, the motto is ‘adapt or die’, although given the extreme uncertainty of our current situation, adaptation feels like it is going to be difficult. So, we thought now would be an interesting time to look at how businesses – all businesses that depend on footfall, human presence and face-to-face meeting, not just retail – might cope and we have a few suggestions for how you may look to reinvent yourselves.

The first thing to remember is that sticking one’s head in the sand is not an option. Things are unlikely to get back to normal anytime soon – indeed, they may already have changed forever. Some retail businesses, aware that the landscape had changed, were starting to adapt even before the coronavirus outbreak. Carphone Warehouse, looking at its data, had realised that its small standalone high street outlets were no longer profitable, so the company decided to close these down and incorporate mobile phones into its larger PC World/Currys stores, figuring that the latter’s tech offering would work symbiotically with the CW offering.

Then there’s fast-fashion giant H&M, which, despite having opened new stores in emerging territories, has found its established markets in the US and Europe (where it plans to close 175 shops) under pressure. Management’s answer has been to change strategy, to use its 5,000 or so stores to act as logistical hubs to boost online sales: one can imagine your local H&M becoming not just a place to buy dresses and trousers, but also somewhere to pick up your online orders, maybe have a cup of coffee, meet friends, see a fashion show or the latest collections… the possibilities are almost endless, but to remain viable, a retailer must do more than just sell stuff, it has to add value, to offer shoppers an experience that’s worth their time and them travelling.

In the affluent Battersea area of south London, Marks & Spencer has converted a medium-sized (and previously rather dowdy) clothing and food store into an ‘M&S Market‘, a kind of upscale miniature version of Borough Market, offering M&S favourites as well as ‘artisanal‘ goods, an in-store salad and herb farm fixture, local craft beers, food-to-go and so on. If you’ve visited, you were probably impressed – it reminded me of one of those upmarket New York grocery stores, the merchandise looks fresh and inviting, the layout is adventurous, it offers pretty much everything you could need, and there’s a real sense of theatre about the place. It’s somewhere you’d make a detour to, and spend time exploring. As someone who has a soft spot for M&S and who has despaired at the company’s tired retail estate and frustrating online experience, a visit to this store made me smile. I understand that early sales figures from SW11 are promising, so let’s hope it works.

And of course, it’s not just the big chains who are looking at doing things differently. Many of the family-owned department stores that were once a feature of every town have gone under, but those that have survived have done so by offering that extra degree of customer service, and by providing – usually via their coffee shops and restaurants – a social hub, somewhere to meet friends, relax and have a natter. For older people particularly, oases such as these provide vital social contact with others. The online shopping experience may be convenient, cheap and efficient, but ultimately, it’s a cold, perfunctory process – which is why so many music fans still buy from record shops (although these have admittedly shrunk in number).

Of course, all of these innovations are largely moot right now. As we are in the middle of a pandemic, social contact is being discouraged if not yet outlawed, and most business models seem to be broken. The emergency is as much financial as it is medical. But as unpredictable as events are right now, as bleak as the business outlook seems, there are still opportunities for those who are willing to do things differently. Where they were able to, many coffee shops and restaurants converted themselves into takeaway-only operations. I heard about a restaurant that, faced with enforced closure, had converted itself into a kind of retail outlet, buying supplies from its wholesaler as usual and offering customers ingredients and ready meals to take away and cook at home.

Even our mighty supermarkets may be forced to change. The recent spate of panic buying has forced them into selective rationing and, visiting a supermarket, it’s striking how the staples are often in short supply, while exotic ingredients and gourmet sauces are still plentiful. One of the reasons for German discounters Aldi and Lidl’s success over the past few years has been their compact range (they are officially known as LADs, or “limited assortment discounters”) – typically an Aldi or Lidl will carry 4,000 lines compared to the 100,000 of a superstore. Research from Kantar and others has demonstrated that this limited range makes shopping easier and quicker, and actually strengthens the consumer’s perception of value. One can envision the supermarkets stripping out the dozens of fancy mustards or bottles of mirin to allow more space for the in-demand staples. And Amazon isn’t immune either – the online behemoth has said that it will not be stocking any more supplies of vinyl records, freeing up space in its warehouses and supply chain for more essential items such as groceries and toiletries.

The out-of-home entertainment industry has been impacted perhaps more than any other sector, with theatres, venues and galleries closed and tours, festivals and concerts cancelled. How do musicians and actors make a living now? The problem of musicians seems particularly acute, as playing live is now practically their only means of scraping a living, the returns for recorded music being so meagre.

Yet even here, there are some green shoots. A number of enterprising jazz, rock and folk artists and grassroots venues have started live streaming gigs straight to fans – the most high profile example being last weekend’s Lady Gaga-organised One World: Together at Home series of gigs, which featured the likes of The Rolling Stones, Elton John, Paul McCartney and Billie Eilish, which raised more than $127m for Covid-19 relief.

With more and more people confined to their homes, there will be a hunger for entertainment of all kinds, and this could represent an opportunity for those wanting to take it up. There have also been (as yet unverified) rumours that streaming sites such as Neflix, Disney+, Spotify, Amazon, and Apple TV/Music have seen huge growth; and The New York Times speculated that the album (as opposed to individual tracks or the playlist) might make a comeback, with listeners looking for a richer experience.

With stores switching to “logistical hubs” or fashion show destinations, artisanal food halls from M&S, barbers selling T-shirts, restaurants becoming retailers, what is the response going to be from marketing services, media, production and similar businesses? What good can be learned from what is happening right now? How do these businesses think differently too, use their creative energies to help their clients (in every conceivable sector) get through this most testing of times. This is where the dynamic, nimble, and innovative can steal a march on the big consultancies that have eaten into their domain so much in the past few years. Creatives, technologists, and planners will need to concentrate not just on award-winning campaigns, but business solutions.

Times as extraordinary as these will require different thinking and new ways of working; and without putting too much of a gloss on what is a grave crisis, this could be the biggest opportunity for agencies since the 1950s. Peoples hands are being forced to find new and innovative ways to solve client problems, and there’s no people better to do that than those within the creative community.

Some of the ways that businesses may look to adapt or reinvent their service offerings and models may include:

Recognising that the disintermediation process will continue as clients develop more digital marketing and creative capabilities internally. You could look to step towards this, rather than bemoaning it, and assist in the process by offering clients access to talent that can work within these departments on a temporary or permanent basis. Clients may want you to develop the strategic approach and the ‘big idea’ that then gets handed over to their internal department to take on and fulfill across their communications and content channels. Or the reverse, where the clients wants their internal thinking to be activated by highly effective and efficient execution agencies.

Becoming digital and technology partners to your clients. It is clear that technology has now become a critical factor in developing competitive edge for brands – the current environment has now elevated this further. Many clients are unclear about which technology platforms are right for them and how to integrate and leverage these into their marketing ecosystem. This is an opportunity for you to develop deep strategic partnerships with clients on the basis that you can help clients understand how technology can give them the edge to win in tomorrow’s markets.

Another area that you can deepen your relationship with clients is in relation to data. Clients now have access to massive reservoirs of data that can be utilised to shape messaging, new product development, innovation and marketing investment optimisation. In many cases this data is underutilised as clients have simply not figured out how to even begin to draw out the necessary insights and conclusions from it. You can utilise your strength in creative thinking to synthesise the data into new approaches to strategy and marketing communications in these rapidly shifting times.

Yes, it does seem rather gloomy out there right now, but it is also an opportunity to reinvent yourselves in order to become indispensable to your clients for the next 20 to 30 years. And in keeping with this we are in the process of extending our own offering – watch this space.

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