So, shops (well those not cooped up in an indoor shopping centre) in Scotland are now open. The long road back to re-opening the economy has taken another step forward, and one result is a gigantic queue outside a city centre clothing shop hours before it opens. But, after the honeymoon, what happens?
The key for retailers in this next phase will be the interaction of confidence and cash. The same is true of town centres and indeed of all economic activities. Many of the places we are thinking about are (as Ojay McDonald (@Ojay) said in a seminar last week) congested by design, whether products or customers, and so getting people back into these sites will require a major effort in instilling confidence. Yes, confidence is rising about defeating the virus, but it is not over yet, and the gains remain fragile. For many, the (perceived) risk factor remains high.
So what can retailers and town centres do to instill confidence? We have all seen and become used to the presence of hand sanitisers, more visible cleaning, queuing systems, face coverings, signage about spacing, plastic screens and visors and the abolition of cash. We have seen the growth of online and the rise of click and collect. Developments in queue management, traffic light systems, click and collect, pre-booking of appointments and other such mechanisms are all about instilling confidence that your experiecne will be as safe as it can be and that your fears (albeit these vary enormously) can be assuaged.
And the evidence is that this is working; consumer confidence levels are increased, if not by any means “normal”.
But what retailers can do little about is the economic “feel” that consumers have. Different consumer groups have fared differently during the lockdown and for many it has been tough. Others have saved cash and/or got used to spending it online. But the ending of furlough in due course, the sense that the next phase of the pandemic is an economic one as well as a health one and a rising concern about future levels of unemployment and job security all point to a tightening of consumers’ spending. This might not kick in for a little while, but there is a nervousness about how this will go.
Retailers can do little about this. They can kick start spending by discounting the piles of stock they may have. They may get temporary relief as people replenish or simply buy products, because they can. But the need for retailers is in knowing there is sustained activity, and that is very much out of their hands.
There is also another factor that links confidence and cash. The steps to instill confidence often introduce friction into the retail situation – as I found out queuing for 45 minutes (at least in the sunshine) to use a building society the other day – and the more friction there is, the less consumers can window or impulse shop. Delays and slowness are built into the system; it is likely that spending will be reined in as a consequence. The shopping experience will be more measured and planned, and probably take a longer time. Yes, we have confidence, but at what cost and to whom?
So if this has to persist – and it is likely to for some time – then how will consumers react? What frictions are they likely to be willing to put up with, and what will turn them off? What frictions, on the other hand, are some consumers willing to pay to minimise and for which retailers may be able to charge? We have got used to differential pricing for delivery to the house; so what about access to the store?
The opening up of Scotland’s shops from today heralds the next phase in the pandemic. It is one though that is a step into the unknown. We do not know how consumers or retailers will react initially and then as things develop. Have the last three months (and the thought of what may be to come) made consumers reconsider how and with whom they spend their money? What will consumers now value? And what will retailers start to offer to build confidence for consumers to shop with them?
We will be finding out in the next few months. It is also a breathing space in which we can re-imagine how retailing and town centres operate. And in which we can begin to think how as a country and a society we should construct such activities. At the moment we have to get things moving again as best we can; but after that there needs to be a rethink about what we want and need.
A final point: in some retail sectors many shop workers have been working throughout the pandemic. They have experienced a very different work place. Those returning today will see enormous differences. All are doing their jobs, and serving people. They deserve to be treated with respect. They are also affected by the issues of confidence and cash and are not personally responsible for the friction customers are experiencing. Respect them.