Curtain up - and door closed?
Not all shops will open permanently when the Corona fog lifts: Industry observers fear that up to a third of shops in the retail sector could close. There are three hurdles that must be jumped now: Customer communication, securing liquidity and location design. Christian Saxenhammer explain his insights on the topic.
The Competence Centre for Retailing (Kompetenzzentrum Handel), which supports German SMEs on behalf of the Federal Ministry of Economics and Technology in all matters relating to digitalization, promotes the development of flexible and innovative survival strategies during the complete lock-down.
The 150-year-old traditional family business Van Dorp from Bonn sells everything related to cooking culture for table and dining. In the summer of 2020, the company embarked on a digital journey in order to be prepared for the Christmas business and further lockdowns. A state funding programme was used to finance the technical implementation of the online shop, to set up a delivery service with a cargo bike and students, and to ensure visibility for local customers in social media channels. Click & Collect, Click & Meet – everything is possible and is used actively.
Customer communication, securing liquidity and location design are the three central topics that retailers now have to rack their brains over.
When it comes to securing liquidity, the B2B wholesale marketplace Ankorstore wants to help retailers. The Europe-wide platform was only launched in February 2020 and already has over 30,000 customers and manufacturers, 8,000 in Germany. In addition to a variety of brands and products that are intended to help small business and independent retailers in particular to differentiate themselves and expand their product range, Ankorstore entices customers with attractive payment terms without advance payment, 60-day payment terms or payment by instalments, free delivery from 300 euros and a three per cent discount.
A recent study by Bazaarvoice, a leading provider of product ratings and user-generated content, shows that Germans want to remain loyal to stationary retail in the future. 46 percent of those surveyed in February 2021 said they would make their purchases in stationary stores during these times, primarily for haptic reasons (44 percent) and because of the direct availability of goods (26 percent).
Christian Saxenhammer, a corporate finance consultant in Berlin, nevertheless takes a critical view of the chances of survival for many shops. “Everything that is not fresh and perishable will go online in the medium term. Convenience is in the foreground. Only specialisation will save some.” Saxenhammer advises large retailers to buy in online expertise if they still have the liquidity to do so, and to make maximum use of the subsidies for digitalisation from the bridging grants.
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