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Weekly Winners in Retail

Weekly Winners in Retail – 13.07.20

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Last week was a challenging week for many, with significant negative press surrounding some of the giants of retail. Boohoo lost reseller support and saw their share prices drop amid claims of some of their products being manufactured in poor worker conditions. Whilst Boots and John Lewis had to make a large amount of their employees redundant, in response to challenging trading conditions during Covid-19 and to plan for the future health of the brands.

However, like every week, not all the news we saw was bad, with many green shoots. At RetailRecovery we look to profile some of the stories which peaked our interests, with our top 5 winners of the week profiled below:

1. The Entertainer bucks the store closure trend, opening flagship store

When: 9th July

What’s the news?

With so many store closures over the last week, it’s great to hear a bit of good news as TheEntertainer invests £1m in reopening their flagship store at the Bullring in Birmingham.

The Entertainer Bullring store, including an ELC store in store

Source: Retail Bulletin

What do we expect to see?

The survival of the high street, retail parks and shopping centres is on a knife edge. Although many retailers have reopened their stores, it is noticeable that not all retailers have opened their full estate, due to the running costs associated. Landlords are also left in a precarious position, with quarterly rent not being paid in full, with an average of 30% of payments. With retailers looking to save costs and brands (both retailers and landlords needing to cease trading) as the government support reduces, we expect that the amount of retailers across the high street, retail parks and shopping centres will reduce by up to 50% by the end of 2020.

2. Online sales continue to boom despite stores reopening

When: 9th July

What’s the news?

UK’s online retail sales continued to soar during June, even though non-essential bricks-and-mortar retail began to exit lockdown. According to the latest Online Retail Index from IMRG and Capgemini, overall online retail sales in June surged 33.9% year on year, a new 12-year high, with online sales also growing month on month by 3.5%, when comparing to May.

Source: Retail Gazette

What do we expect to see?

At Retail Recovery we expect that year on year sales will continue to remain higher for the remainder of 2020. Our studies and the recent British Retail Consortium report suggests that consumer confidence is still low, with many consumers now preferring to shop online rather than in-store. We do however expect the month on month growth to show a decline, plateauing over the next two months.

3. Checkout the best eCommerce brands

When: 9th July

What’s the news?

Brands including Gymshark, Ao.com, Allbirds, Whittard of Chelsea, WHSmith, John Lewis and Sodastream pass the checkout test, as they meet many of the best practices which help to drive conversion rate. These best practices include ensuring that consumers understand that checkout is secure, providing a range of payment options including buy now pay later options for high ticket values, isolating the checkout removing un-necessary distractions like the navigation and providing a guest checkout.

Whittard of Chelsea providing security confidence to their customers

Source: eConsultancy

What do we expect to see?

At the start of the pandemic, we recommended that brands who didn’t have a digital first approach and / or had seen an negative impact on the demand should focus on digital projects to put them in the best possible position to take advantage of trading over peak. Conversion Rate Optimisation was one of these projects. Those brands who have focussed on initiatives such as streamlining the consumers digital purchase journey, will gain the highest market share in their sector over peak and are more likely to survive in 2021.

4. The fashion sector shows signs of retail recovery

When: 10th July

What’s the news?

Fashions retail recovery gains some momentum in June as number of orders rise by 93%, however Average Order Value (AOV) is still down by 22% year on year based on data from True Fit Corporation.

William Adler CEO at True Fit, said: “We’re seeing the continued re-emergence of retail and, while shoppers may be spending less per order, but they are purchasing more frequently and browsing more, so clearly the appetite to buy is there.”

Fashion sales increase however heavy discounting is still required

Source: Retail Times

What do we expect to see?

As confidence continues to grow and consumers start to venture out more socially, we expect fashion retailers to continue to benefit, with increased sales Year on Year in July. However, the challenge with AOV will no doubt negate this improvement, as fashion and apparel brands will be faced with more aggressive discounting towards the end of the Spring / Summer season, to improve cash flow and make room for the Autumn / Winter stock.

5. Pandora benefits from speedy store reopening’s

When: 10th July

What’s the news?

Positive news for Pandora, as they are set to post better than expected results in May and June. The results are supported by their online sales and the pace of reopening its stores, with 86% of stores now open.

Pandora able to reap the benefits of store reopening

Source: The Retail Bulletin

What do we expect to see?

We expect that Pandora will further benefit over the coming months, as they look to increase their media investment and should start to see positive improvements to their profitability, not only with the restructure but also as their reopening approach has put them ahead of the competition.  It however remains to be seen whether Pandora will open up its full complement of stores.

Want to be a retail winner?

Are you an Omnichannel retailer looking to improve your sales performance and market share? Do you need to get your retail strategy back on track? Our RetailEvaluator framework enables you to understand where you can improve your retail plan both today and in the future.

Alternatively, you can download our FREE Covid-19 retail strategy whitepaper, containing more than 110 practical recommendation, to help you navigate today’s current climate and plan for business growth.


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