Clicks vs bricks: How retail is changing

Traditionally Labour Weekend sees people wanting to flock outdoors – and that will be no different this weekend, even though there is a pandemic. If you’re in level 3, you may not be able to escape to the bach, but you can indulge in some DIY or gardening. It is literally retail therapy.

Kiwis have diverted their international travel funds into their homes. That sense of fulfilment gained from completing (or even starting) a project is important to our wellbeing, especially during lockdown times.

As New Zealand enters into the summer months, arguably retail’s busiest period, many retailers are asking themselves: how sustainable is it to operate this way? Looking at how this pandemic has impacted the way customers shop, will these behaviours stick? How do we equip ourselves for the next 12, 24 or 60 months?

From a retailer’s perspective, trading from behind closed doors is tough. Hardware stores aren’t designed to be warehouses. Store team members in level 3 regions are walking tens of thousands of steps a day picking and packing online orders. It’s tiring – I know, because I worked a couple of days doing just that to help out one of our Auckland stores last week.

‘Click and collect’ requires the entire team to do about half of the sales, but we can’t say ‘‘commercially that doesn’t make sense, we’re not doing it’’. Our customers and communities depend on us.

Retail needs to future-proof its operating models, as customers have become accustomed to click and collect and home delivery. That’s a challenge when you consider the sheer number of orders coming in.

Where do you store all your stock while ensuring customers can get it with the same convenience of going in-store? The home improvement industry is heavily reliant on bricks-and-mortar retail; much of our range is difficult if not impossible to sell online.

What does the supply chain look like for retailers in the coming months? Retailers are having to factor in global disruption, shipping delays, significant freight cost increases and hold additional stock to ensure continuity – all of which puts more pressure on a retailer’s footprint.

We could not have foreseen operating in a pandemic, so imagine the challenge of still running on point-of-sale equipment from 1994.

Here at Mitre 10, we are now immersed in a major five-year programme to ensure our customers get the best experience – because convenience is king. With everything so easily available at the click of a mouse, we know it’ll be very difficult for a customer to bypass one of our competitors to get to us, when they are shopping for convenience. So where we are located, access, car park ease, hours of opening, and ‘‘click and collect’’ all make a difference.

As the population grows and urban areas encroach into rural, there will be demand for more stores, so we are scoping out new locations over the next few years, including trade centres. That urbanisation is creating challenges due to land prices in and around our cities, and it’s a real challenge for multi-site retailers with a growth mindset.

Amidst that backdrop of constant change and uncertainty, we are transforming our entire business to create the best possible experience for our customers. We have not slowed down, we have not said ‘stop, panic, retrench’. New Zealand-owned businesses cannot afford to.

Retail is a resilient industry, always evolving. It’s not easy work, but you’ve got to be with your customers all the way.