So you’re thinking of reopening your stores?
This post was originally published on Inside Retail Australia.
As social distancing rules are beginning to lift, some Australian businesses have already begun reopening their stores, while others are still weighing up the pros and cons.
Accent Group (Hype DC, Platypus, The Athlete’s Foot), Brand Collective (Hush Puppies, Superdry, Shoes + Sox), Lovisa and The Daily Edited have recently opened some of their physical stores in some states, depending on their varying restrictions.
When bricks-and-mortar shops first closed, their decisions largely depended on whether they could keep their staff and customers safe. At the time, some retailers did not have the right measures in place that aligned with social distancing, although reopened stores have since introduced new rules to keep everyone safe.
Unfortunately in these unpredictable times, it seems that many retailers are yet to create a detailed operational strategy around reopening stores. According to a survey from McKinsey, 75 per cent of respondents had not yet developed specific criteria for reopening.
Traditionally, bricks-and-mortar store networks are not agile, but in the current climate, the ability for businesses to think on their feet is key to success.
“Retailers need to develop a strategic network plan which delivers an optimal physical network designed with maximum agility,” advises GapMaps CEO – Australia & New Zealand, Toni Newell. “We used to think of network plans in terms of five years. Now, we will need to think in shorter timeframes with increased flexibility.”
GapMaps is a network strategy consultancy with expertise in planning store networks and location intelligence. The team offers a free introductory consultation for retailers to help guide their network strategy thinking and processes.
A network plan provides a clear road map for where businesses should open future locations in the market to best target customers, explains Newell. It considers the best placement of each location and the impact to a market as a whole, minimising cannibalisation and avoiding catchments from being under serviced.
In terms of deciding which stores to reopen, retailers should ask themselves questions such as:
– What drives a store’s performance?
– Which store formats are the strongest and weakest?
– Why is a store underperforming?
– What is the trading catchment for a specific store?
– Which stores are trading at above or below their location strength?
– Which stores should be closed, retained or require investment?
“The answers to these questions become inputs to the business’s network strategy & plan. In the short-term, the strategy focusses on the reopening process and deciding when (or whether) to reopen a store. In the medium- and longer-term, the strategy creates a framework for determining physical network matters including preferred location and format types, catchments and catchment gaps, capital expenditure levels and lease renewal requirements,” explains Newell.
No doubt, Australian physical retail will look very different when we’re on the other side of the pandemic, but with the help of a clear strategy and a fact-led network plan offering flexibility, businesses can survive the challenging times of the current climate – both now and in the future.