What can we learn from China’s retail industry

Topic:

There are few industries that have been more affected by the Covid-19 outbreak than retail. 

Providing 3 million UK jobs and contributing an impressive £381 billion of sales in 2018 alone, retail’s ability to bounce back post Covid-19 will play a key part in supporting and restoring our economy. 

With that in mind, attention naturally turns to how retailers can begin to recover; what actions can be taken to start getting back to business? For this, we should take a look at how China’s retailers have started to recover. What lessons can we learn? What trends are emerging and how can UK retailers adapt their business now to gain a competitive advantage?

China’s retail industry at a glance

Covid-19 was first detected in China in late December 2019, consequently it was one of the first countries to go into lockdown to prevent further spread of the virus. China is therefore estimated to be around 4 weeks ahead of Europe in terms of the progression and impact of Covid-19. Consequently, the Chinese retail industry is one of the first in the world to begin to see green shoots of recovery.

China’s recommendations to the European retail market

The American Management Consultancy firm McKinsey held a virtual roundtable with some of China’s most influential retail giants, to discuss their experiences of managing retail companies during and post Covid-19. As part of this discussion, the retailers offered some advice to those European retailers yet to enter this phase of recovery. We have summarised these recommendations below. 

Focus on improving your online offering

  • O2O, e-commerce & Click and Collect are set to be growing revenue arms for retailers

[Quick summary: O2O refers to Offline to Online business and vice versa. The idea is around blurring the boundaries between a business’ online and offline proposition. A great example of this is Click & Collect whereby a customer can purchase a product online and collect in-store]

  • Expand online SKUs to meet growing customer demand
  • Community retail is set to become an influential player. Consider how you can incorporate new sales methods into your business – how can your brand interact more with the community? 

A fantastic example of community retail can be seen with Ikea in Warsaw who launched a program called: Kuchnia Spotkan in Polish.The initiative involves the opening of a community kitchen at the IKEA Warsaw location, that can be rented by customers free of charge and used as a space to host friends and family for dinner. This truly blurs the line between brand and consumer and helps to build the perception, trust and sentiment of the brand in a new and unique way that goes above and beyond price and product. 

Invest further in delivery

  • Loyal high street shoppers have recently swapped to online purchasing and many look like they’re here to stay. Ensure your delivery service is robust enough to continue to serve such high volumes of online shoppers and home delivery requests

Communication is king

  • The correct channel, or combination of channels, can give companies the edge over competitors to reach a new type of customer. Consider what messaging would be most effective and which channels would be most appropriate for targeting your customers post Covid-19

 

Retail trends emerging post-lockdown in China

  • Cloud consumption is the new normal with a focus on contactless payments 
  • Supply chain diversification is of vital importance to ensure your business is less vulnerable. This will also improve your brand sentiment as customers are leaning towards more eco-friendly, locally sourced products and so having a variety of both international and domestic suppliers can strengthen your business and brand
  • Consumer demand trends have changed and will continue to fluctuate – consider adopting virtual or flexible stock
  • E-commerce and home delivery demand will continue to grow due to consumer anxiety around visiting crowded spaces – consider diverting budget to support these areas
  • Multichannel adoption is vital. Post lockdown your customers will be targeted and bombarded with marketing messages from an array of businesses. How can you ensure your brand stands out? Always consider: right channel, right message and right time.

The role of communication

This insight into emerging trends from Chinese retailers certainly offers a few signposts for how UK retailers can begin to prepare for a return to business. The common theme that underpins all recommendations and trends, seems to be that of communication. Whether it be related to a more tailored message to your customers, different conversations and approaches with your suppliers or communicating a more agile approach to logistics. Communication is the key to success.

How can SMS help?

Hailed as one of the most effective forms of communication, SMS exists on all mobile phones, and has an impressive 95% open rate. A flexible and direct form of communication, SMS can help support retailers to navigate post-lockdown life.

  • SMS Surveys can be used to understand consumer trends early, by surveying consumers around their shopping intentions. This will enable retailers to amend their marketing and purchasing strategies accordingly
  • Delivery notifications can be sent to alert customers of their order status and estimated delivery time
  • Click & Collect alerts can be sent with detailed instructions around how to collect their order, while also providing the unique order identifier 
  • Tailored marketing can be used to alert a customer around a new complementary product range or a new promotion running
  • Back in stock alerts. It is inevitable that retailers may continue to struggle with stock shortages during the early stages of recovery. By creating a personalised SMS alert system to let your customers know when the product they’re interested in is back in-stock, you will help to maintain the relationship with the customer and lead to a quicker conversion
  • Local store information. Some products might not be available for home delivery and so detailed directions can be supplied via SMS to ensure that your customer can quickly and easily find their nearest store
  • Customer satisfaction surveys can be used to efficiently gather feedback on new services, such as Click & Collect and enable you to make quick changes or improvements as required
  • Internal staff communications and shift rota updates. Shift patterns can quickly change as consumer demand fluctuates. Consequently the ability to quickly and easily communicate with your workforce is of vital importance to ensure your business can continue to run smoothly.

If you would like to find out how we can help your retail business on the road to recovery, please email sales@esendex.com or call 0345 356 5758 we’d be happy to help.

Author Avatar
Amy Robinson

Hi, I’m Amy, Senior Brand Development Manager at Esendex, with a background in digital and international marketing. I love everything to do with digital technology and improving communication between brands and their customers. I also take great pride in combining digital optimisation with user experience.