Hitch Advisory partner Olivia Hitchens answers the question, what should retailers prepare for this year?
Now we can finally park at the shopping centre and the posties can breathe a sigh of relief, it’s time for retailers to take stock and prepare for the unknown of this year.
Whilst 2020 and 2021 were a rollercoaster ride for retailers, it hasn’t all been doom and gloom.
Consumer spending in some categories has been strong, and Australians have become experts in online shopping.
Retailers who performed especially well during the pandemic were those that were financially prepared, flexible and digitally savvy.
Whilst we hope for a lockdown-free year, we now know that nothing is certain.
Below is my 'shopping list' of administrative tasks that proactive retailers should be checking off during slower months (perhaps over a cocktail or two by the pool!) to ensure they are fighting fit to tackle 2022.
1. Workforce Review
From navigating standdown, working from home, vaccination requirements and many more issues, COVID-19 has taught us that retailers need to be on top of their employment obligations.
Now is the time to ensure agreements are up to date and reflective of employees conditions, wages and conditions comply with Award requirements and that you are having discussions with casual employees about conversion to permanent positions (if they meet the test).
In addition, employment agreements should give employers the flexibility to reasonably alter positions to meet changing situations.
Navigating rent headaches during lockdown was stressful for retailers.
Now is the time to be reassessing your store foot print (what works, what doesn’t) and having conversations with landlords about rent reviews, refreshing fit-outs and downsizing or relocating (if necessary).
Before taking on new stores, ensure your lease won’t over commit you if trade is interrupted in the future.
There are good ownership structures and there are bad ones.
If your business is all operated out of one trading entity that owns your IP, holds leases, employs staff and enters into contracts – you have all your eggs in one basket.
If something goes wrong, you risk losing everything. Now is the type to implement a solid structure to prepare for the worst.
4. Financial Planning
Stock planning, budgeting and smart terms with suppliers are critical to ensure sufficient cash flow for 2022.
Whilst it may seem impossible to plan ahead, a conservative financial plan (that factors in things like repayment of deferred rent) will set you up for the future.
5. Get Creative
Whilst this isn’t a legal issue, now is the time for retailers to get creative to stand out from the crowd.
Customers are craving experienced based retail and a seamless online offering.
Consider a website overhaul, interactive instore activations and collaborations, product customisation, a solid social media strategy and most importantly – fast and efficient ways of getting product into customers’ hands as quickly as possible.
Next day is not good enough in a competitive environment.
There are some great creative agencies and speedy delivery partners out there – you just need to know where to look.
May the tills ring!