Whilst COVID-19 does not discriminate, the economic effects of necessary social-distancing are felt most heavily by retailers, leisure operators and hospitality providers. Many sectors can take advantage of technology to facilitate productive working-from-home arrangements and ‘keep the wheels turning’, but this is not a luxury the industry has.
Within a week, our national situation has progressed from seemingly inconceivable, to becoming our new reality. But this ‘new reality’ is brand spanking new; it’s unprecedented, it’s unnerving and - in order to get to grips with it – community-spirit, resilience and a human approach are required!
Nobody is under the illusion that this is going to be easy, but how can the sector build both community and resilience, and keep the ship afloat? We have spoken with several leaders about both their social and commercial responsibilities and whilst there is no short-term fix, there are several positive initiatives to consider that are resonating with both employees and customers…
1. Retaining brand equity, in a cost-effective way
Whilst revenue is on pause, businesses must focus on building brand equity and connecting with customers. What activities, initiatives and strategies can strengthen their brand to ensure that it still exists at the end of this storm? Many brands won’t survive, but those that do will have stayed connected with their customers in an innovative fashion. And for online retailers specifically, not via endless email promotions.
National gym-operator PureGym have frozen all membership payments, but are providing video content to members via their app. Can restaurants – both national chains and independents – recreate this with cooking content of their most popular dishes? Yes, a customer can access cooking shows and pre-existing online tutorials, but this is about inducing loyalty and adapting offerings. Or can you create virtual competitions and provide gift-card prizes?
2. Continue to align with personal values of your customer
There has been an increased importance placed on company purpose in recent times – requiring the industry to look beyond profit and address issues that matter to their customers. And faced with a pandemic, this is more important than ever. COVID-19 has taught us that we are all equal and that having strong personal values and doing ‘the right thing’ is vital; Retail & Leisure businesses must align with this. Neil Clifford, CEO of Kurt Geiger, has found a way to align; by implementing a volunteer initiative for the 2,500-strong workforce who are unable to work remotely. Kurt Geiger employees can volunteer with Age UK in their community-focused program, delivering food supplies to the elderly – all whilst receiving full pay.
3. Reconsider board-level renumeration & build resilience
Where possible, businesses should consider the prospect of all board members agreeing to a pay-cut, in the interest of preserving their operations post coronavirus. Some CEOs have already responded to the crisis in this way – many of which are in the airline industry. But this can be extended further. Arne Sorenson, CEO of Marriott Hotels, has vowed not to take any salary for the remainder of 2020, with her executive team also taking a 50% pay-cut. Clearly executive teams have a huge challenge on their hands - and they need to be rewarded accordingly - but certainly for PLCs, this can be done via incentive compensation based on shares. Employees of companies who have already taken this stance have reacted very positively, appreciating the measures being taken to protect their place of work and their community.
None of the above initiatives are going to solve every issue that COVID-19 has created. Those that are not inextricably linked to short-term financials, could be at risk of being at the bottom of a leader’s priorities. However, this is both naive and detrimental to the long-term health of a business - the most successful leaders understand this. And the ability to do so demonstrates an empathetic and human approach; a vital leadership capability.
It’s worth remembering that community drives positivity, positivity drives resilience and resilience drives businesses through the toughest of challenges…
For more information on anything we have disucssed in this blog, please contact Kathryn Gill. Kathryn is a Consultant within the Retail and Leisure Practice, specialising in health, beauty, fashion and travel. With a UK-wide remit, she specialises in senior appointments across commercial, marketing, buying & merchandising, operations and general management roles.