Retailers are not to blame – Objection!

10/23/2020

For creative retailers: A constructive response so that action can be taken.

The retail sector has “through no fault of its own” found itself in a situation where...

... it can no longer escape “the situation,” says Stefan Genth, CEO of the German Retail Association (HDE). His demand is therefore: "... further government aid (is) really important to give retailers the opportunity to offer their products more widely through various channels in the future. ..." (Source: City center summit: Altmaier wants to help struggling retailers, Redaktionsnetzwerk Deutschland, October 20, 2020).

As much as we think it's great to support local retailers in every way possible, is the description of the problem really accurate? And what about the solution?

We don't think so. There are creative retailers out there, and they deserve all the support they can get. But it needs to be different. Here's what we think.

“Through no fault of their own” – is that really true?

We have been in the coronavirus crisis for more than six months now. And this is how the situation stands at present.

1. City centers are dying out.

Large retail companies are closing their stores. There are no attractions. What used to be a locational advantage—a good location in the city center—is now a millstone around the neck. Does the city leadership have good answers? In Hanover, the answer is “car-free city centers” (which could be a good idea if it were at least well communicated; more on that below). The revitalization of city centers is a task that must be tackled urgently.

2. Clients are staying at home.

And they are making themselves comfortable there. The world is viewed on screens. People only go outside when it is absolutely necessary. This is confirmed, for example, by the autumn survey of the Havas Media Corona Monitor, 2020, in Horizont (link in German language) : “Consumers are settling into the new normal,” October 20, 2020.

3. The big winners of the crisis are online companies.

... in other words, all companies that sell online and take the necessary measures to bring their products to women, men, children, and everyone else. (There are many sources for this, one example is the Handelsblatt article from October 21, 2020 - link in German language, about e-commerce growth at Nestlé).

Anyone who hasn't realized yet that they need to do something is going to have a hard time. So, what's happening?

Retail is missing out on opportunities.

Far too many retailers are still complaining about the internet and online competition. That's the wrong attitude. Instead, they need to be better than the competition and better than they are now, recognize opportunities, and seize them.

[Translate to English:] Artikel "Der schöne Schein im Internet - vom Kommen und Gehen der Online-Anbieter" — Article “The beautiful appearance of the Internet – the rise and fall of online providers”

Instead: What exactly is “systemically important”?

The only people who are “relevant” to a “system” made up of people and organizations are those who have something special to offer. Not those who cry out loudly for help. Yes, a system must help its weakest members. But does that mean retailers? Shouldn't retailers be the ones adapting and driving change right now? Those who are most successful at change will survive. Because at some point, the cash register will be empty, and now we have to think about filling it up again soon.

It's not about digitization. It's about being close to our clients.

It is important how you talk to your clients, in every sense, including digitally, and constantly find out what they need and want. That is what retailers like Amazon are simply doing better at the moment! Digital is just a tool.

Back to the roots

In the Middle Ages, merchants tied their goods to donkeys and carts and set off from village to village. Because customers couldn't come to them, they went to the customers. Today, on the other hand? Many, not all, sit in their smart shops. And they wonder and grieve why no one comes.

What do retailers need? Customers. And goods that they want and that they can bring to them. They also need routes and the right means of transport. Sources. Warehouses. If customers can come to them, they need a location, but only then! But if customers can't come, as is currently the case, then retailers have to go to them.

What needs to be done? Strategic guidance.

Where are the clients? On screens large and small. So that's where you need to be.

1. A digital presence and a good one at that is an absolute must!

In all formats! Anyone who doesn't have one yet will face a huge problem with the second wave. And even after that, the world won't be much different.

2. Clients have time, they think things through, they have concerns and needs.

Talk to them! Send them emails. Make contacts. In other words: build a community. Yes, you can do that digitally! Because what really counts is closeness and contact.

3. The products and services must be right.

A very good dealer and friend, a comic book dealer (of course), tells me: "I have to grow with my clients. If they want Hello Kitty bedding for babies (instead of or in addition to comics), they'll get it from me." He's right.

4. A good website is structured like a good conversation.

It's a simple idea, really. But it's rarely implemented. Especially not in retail. That's a shame.

5. The goods must go out to the client. Not the other way around.

Logistics and transport are important key factors. But you can solve them! Because it's not Jeff Bezos from Amazon who is close to the clients, it's you who are right there on the spot, dear local retailers! If Amazon delivers in 24 hours, you have to do it in 4 hours or less.

Others have been thinking about this for a long time: The large online retailer AboutYou plans to reduce delivery times to less than 90 minutes! To do this, it wants to use local delivery stations – which will then become the alternative to local retail. (Source: Handelsblatt, December 13, 2019 - German-language link)

An example

My local, super-friendly comic book dealers COMIX here in Hanover delivered my comics on the same day I ordered them at the beginning of the coronavirus crisis. What I got:

Comics for my (then sick) son.Of course, he got better much faster.
A visit from the delivery boy or girl with a friendly smile and time for a quick chat. Good in times of crisis. Warmed the soul.
A little gift was included: a roll of paper with a funny saying on it. And a little note to remember: so I ended up buying several more times.
One bill. And the comic book dealers had new sales right away.

All it took was being able to order from their online shop, and that was all that mattered.

Thoughts on current actions

More of a shackle than a liberation—sponsored structures tie retailers down.

Our experience shows us that every retailer is different, or at least wants to be. And that's a good thing.

Only a few things can be standardized: WWS, ordering, and other processes. But there needs to be room for individual solutions. Standard platforms often don't offer this to a sufficient extent. And certainly not with platforms that are quickly set up.
Better: use standards as a basis and add customization on top. This gives retailers the freedom to develop. And saves them time that they will need later. Let's be honest: every day, every month counts.

Even if times are tough, emotions are still important, especially now.

Purely technical solutions are justified in some cases. But they are not enough. Because they make everyone look the same. Brand and emotion are important: a) for differentiation and recognition; b) for addressing and retaining customers. Because it is not just the products that retailers can offer their customers to reassure them, especially in difficult times.

SEO is important. But it's not the only thing.

All paths must lead to the client. SEO, search engine optimization, is part of that. It is important that clients a) become aware of the retailer and b) stay. And to do that, I have to a) reach them and b) treat them accordingly.

This applies to all channels, not exclusively, but especially digital. Via social media, all types of news and information, direct channels, recommendations, community building, small gifts, and much more... >>> For a list to discover the endless possibilities, please send an email to pole-position@drive.eu

Ist der Handel nun wirklich selber schuld? Oder doch nicht?

In the sense that trade is obviously not responsible for the coronavirus pandemic, it is of course NOT to blame, i.e. it has ended up “in this situation through no fault of its own,” just like everyone else. But only in this sense!

Unfortunately, this crisis highlights shortcomings and points to measures that have not been taken so far and are still not being tackled consistently, as shown in our examples above. And that is a great pity, because it would be easy to change, and there are offers and solutions available. All of us, retailers, manufacturers, companies, service providers, agencies, must constantly question ourselves and consider what we can do differently, better, and what changes we can make.

As for the demand for government aid, everyone deserves it and it serves an important function: it can save lives. But soon the coffers will be very, very empty. It is much more important to create the right conditions, provide impetus and incentives, and remove obstacles and barriers. This will enable retailers and everyone else who wants and needs to shape the future to do so.

(“Car-free city centers” is a very nice idea. But it won't attract anyone! Without a concept for WHY anyone should drive into the city center at all, regardless of how, this idea remains pointless and therefore meaningless. City centers will soon be car-free and people-free all by themselves.)

With this in mind: let's get to work! And feel free to call: 0173-3691189.