This past year has been brutal for many businesses but few less so than retail. In the past months we have seen the demise of once-loved brands such as Debenhams, Jaeger, Topshop and its Arcadia siblings, adding to the High Street’s woes.
It’s hardly surprising in a year dominated by the Coronavirus pandemic: many bricks and mortar stores have not been able to open for weeks and months on end, and with social distancing in place when they can do so. As 2021 opens on a third national lockdown the fear is more of the same.
Yet we cannot blame all of the high street’s woes on the pandemic: this is endemic of a wider retail malaise. Many brands only have themselves to blame. In the pursuit of profit over people many forgot the end customer – how not only to acquire them, but keep them loyal.
It’s particularly hit traditional brands hard: those born on the internet understand the power of data in both attracting and keeping customers. These are brands that understand their customers as ‘people’; who by maximising current customers can discover new audiences and acquire new shoppers.
Silos or symbiosis?
Acquisition and loyalty activity should be symbiotic, but too often we see silos and missed opportunities. That’s bad enough in a normal year, but Covid has accelerated and exposed such marketing weaknesses.
During the early days of lock-downs many businesses pulled budgets and halted marketing. But with stores closed, a fashion shop or garden centre would find it hard to acquire new customers without that physical, retail experience.
It’s why the focus became about reengaging the audiences they already had. But if brands hadn’t spent the time and effort on building a loyal customer base they found themselves playing catch-up. Many businesses scrambled to get their CRM strategies up to place, their email marketing sorted and leveraging their brand stories.
Not quite ‘too little, too late’ but very much a wake-up call. Loyalty is so important: if all a business does is acquire new customers and not maximising the opportunity then they’re just filling the bucket from the top, whilst losing them at the bottom.
Loyalty is harder than ever to achieve
And loyalty is hard to achieve, especially as people become more pressure-driven and adept at hunting around. This past year has seen online sales boom – a trend only likely to continue. The Office for National Statistics said that in November 2020 (its latest figures), online retailing accounted for 31.4% of spend, compared with 28.6% a year earlier.
Indeed, a survey by the Digital Business Collective found that the pandemic-induced boom had left FMCG brands particularly vulnerable, with consumers more likely to buy own-brand products, and less likely to make spontaneous purchasing decisions when grocery shopping online.
It is why powerful CRM programmes and strong online branding become even more important. People need to find you and trust you if you want them to come and keep on coming back.
The travel sector, even more ravaged than retail, would do well to invest heavily and now to prepare for when life gets back to somewhere near normal. It’s not just about the sales right now, but creating a relationship that delivers on value over its lifetime.
So, too, for hospitality: as wave after wave of national lockdowns and endless changes between the tiers they have been unable to operate as normal, if at all.
Resilience and reassurance - today and tomorrow
Even McDonald’s this week announced that it would not be opening for takeaway (despite being able to do so), though it is allowing delivery and drive-through. It has a strong, loyal brand (as the queues outside its restaurants attested when it first announced last year that it was shutting up shop) but what about the independents or the smaller chains who have neither the financial resilience nor the brand equity?
These are uncommon times. Brands that can talk to and reassure their audiences, who know who they are, where they are and what they want have, in an upside-down world, an extraordinary advantage.