The Future of Rural Retailing

With the novel coronavirus having spread far beyond China, it has impacted on retailers around the globe. UK and international companies have had to contend with closing shops, supporting parents’ home-schooling needs, reassuring sick and worried employees and dealing with supply chain disruptions.

The epos bureau spray coronavirus

We are reading daily reports on the challenges faced by the high street but how do rural retailers such as Garden Centres and Farm Shops react in such unsettling times?

Each business has its own vision, culture, potential and challenges, and how it reacts is down to its research, history, locality and changing business expectations. Over the past 10 years we have seen a massive culture change in customer requirements and expectations, the explosion of social media and the growth of convenience online shopping. So, it is difficult to foresee what the coming two years will bring to the industry, let alone then next 10 years!

Businesses are going to have to adapt and change; that is for certain. It may be subtle changes or large step changes, and there are some key areas businesses have to consider in the coming days, weeks and months.

Nigel Bogle, Founder and CEO of The EPOS Bureau says: “When we consider ‘change’ as a concept we think of things happening over a period that is not typically immediate. In other words, change usually takes time.

“In retail, change has always been inevitable and it is important that retailers evolve their offering continually if they are to Survive and Thrive.

“Since Coronavirus, however, some change processes that normally take months or years to effect are happening with greatly accelerated speed; in some cases, over the course of 24 hours.

He explains: “For example, many of the fresh food retailers that we support have quickly turned to the provision of a collection and delivery service to ensure that local communities and vulnerable people continue to get the food and nourishment they need to stay healthy. To do this, systems have had to be envisaged and created in much-reduced timeframes; specifically, to facilitate things like taking orders; picking products; packing and, of course, taking payment.

“Some businesses have risen to the challenge whilst others are struggling, in part. The latter, trying to cope with some of the logistical demands placed on them by this new way of retailing in their business. Either way though, ALL are being celebrated – and rightly so – for the vital lifeline they are providing into the community and that in itself is highly significant.

Nigel adds: “We all hope – and pray – that this virus is short-lived, for everyone’s sake. I often hear people referring to ‘getting back to normal’, but I have begun to question what ‘normal’ is now. In the world of retailing, I believe we are experiencing a new ‘normal’.

“I fully expect to see customers frequenting stores in person once again in the future but I also anticipate that new systems for things like collection and delivery will remain, for the most part, now that they have been established. Their value in local communities has been widely recognised and I expect that most retailers will continue to provide this service alongside a great in-store experience, post Coronavirus.

“As a consumer myself, this new proposition gives me hope. I like that I will be able to visit independent food retail stores in person, have healthy engagement with people when I can and enjoy that whole ‘foodie’ experience. At the same time, to know that the same selection of great products is still within reach if I find myself time-poor then that has got to be a win for me and the independent retailer.”

Customers switching to online shopping

Long term, as we wait to see what the far-reaching effects of Covid-19 are, there is a very real assumption that consumers will continue to stay at home more, avoiding public places and handling less items, ensuring they are not putting themselves at risk. It is human nature to protect ourselves, and the threat that Coronavirus has introduced has caused a greater reluctance to social mixing which will stay in the minds of many for a long time.

Therefore, it makes sense that some ecommerce retailers will see an upsurge in traffic. Indeed, in a survey of more than 2,200 marketers (conducted by Econsultancy and Marketing Week as reported by econsultancy.com), is stated that 71 per cent of UK marketers predicted that there will be an increase in ecommerce usage as a result of coronavirus.

It's quite easy to hold to the mantra that cashflow is everything and that achieving increased sales figures is merely a vanity to make us feel good. Both can be true, but it’s the complexities of these businesses that cannot be ignored.

We have locational challenges; products to consider; customers to look after and staff to manage and nurture. On top of that, we have business equipment to consider; weather; processes; authorities; seasons; holidays; injuries; road closures; theft – to name just a few. Consequently, simply aiming at one factor or measure is just not enough.

One simple reason for not being on top of all of this is that our industry is, for all sorts of very good reasons, not awash with seasoned professionals. We have farmers who started life on farms and then set up and now run substantial retail and food-service enterprises. We also have all sorts of career changes from individuals with a passion for food looking for a new direction. So, it’s no surprise that there can be plenty of gaps in their knowledge. Yes, much can be learned 'on the job', and plenty of people do ask for advice.

In most cases, however, we are looking at new skills and experience and it’s their careers and their cash; therefore, a clear understanding is essential. I should also mention that time is often a challenge with many working up to seven days a week, more than filling working days with trading hours, customers, administration and everything else.

So, little surprise then that stopping to have a good look at what's going on in a wider context often falls by the wayside..!

Rural retail chart

How rural retailers can counteract this

Internet shopping is an easy option for both the customer and the retailer. What the internet can’t provide is relationships, emotion or immersion, which a garden centre or farm shop can. Now more than ever is the time for retailers to reach out to the customer to provide them with something they can’t experience online, on the high street or at a retail park.

Complacency is old news

It has been said time and again that standing still in business allows your competitors to catch up with you and go on to overtake you. A key motivating factor for many businesses entering 2020 was to not be complacent; a focus that has shifted in recent weeks to leave a whole new challenge in its place.

The objective now is survival: Business visions, KPIs and strategies are changing daily in the current climate, and while planning for the future has taken a back seat for many owners, everyone needs to ask themselves if it should be a higher priority in preparing for the weeks and months ahead.

The importance of the next two years can’t be understated; developing a business to meet the changing customer needs is essential, and using every bit of data and analysis, including customer feedback, is essential.

There are many things to consider including the customer’s ‘basic’ expectations, reviewing or relocating departmental layouts and introduction of new facilities.

Customers visit Garden Centres and Farm Shops for various reasons, including the restaurant and outside attractions, but we also now need to consider that for the foreseeable future, the customer may not want to interact at all, while still wanting to access the products.

Decompartmentalising Shops

Rural businesses traditionally have open environments, driven by the original buildings they merchandise in, their site-lines and the fusing of departments so they merge well together.

What the ongoing Coronavirus crisis has shown us is that certain requirements lend themselves to situations others don’t, and the retail layout of a large centre is something that needs consideration in the future. During the closedown period, some businesses benefited from easy and separate access to food departments or animal feeds, enabling them to open during the lockdown. This is in contrast to the majority of garden centres which closed; both in support of staff and customers and also because they could not offer ‘essential’ goods throughout.

Customers’ changing needs have also been seen in restaurants over the past few years, with many businesses developing their catering offering from a simple café into a high-turnover restaurant, which has the potential to facilitate evening meals and out-of-hours requirements, as a separate entity to the retail offering. We can find examples of ‘the next development’ in every area, and it can’t be underestimated how important the timing of tackling this is.

Planning

To develop this potential there is a need for both design and town planning changes.

Managing to get the right layout, using the right space, selling the right product, at the right time is important; doing this with local council planning permission is essential.

When we work on developing businesses with our clients, we start looking at things from a financial base, and then if needed we move into the design, through to town planning and finishing with the build and operational aspects. Securing the town planning aspect to support any building changes, Class 1 requirements, or even trading hours is essential in the delivery of objectives. Without this agreement, you simply can’t progress.

Customer interaction and Social Distancing

The UK public has always been appreciative and reliant on service and the key to most garden centres’ and farm shops' success is the emphasis they place on their point of difference and service standards.

However, Coronavirus has caused a social divide; whilst this has been essential during this time of virus control, it could become a habit in the future. Understanding, appreciating and reacting to this could be a key difference for business moving forward.

Such changes are already being seen across the country in coffee shops, fast food outlets, and supermarkets, where convenience and locality are essential, and in line with customer needs. Rhug Estate, in Denbighshire, is a great example, having launched a successful drive-through coffee shop at its farm entrance, a convenient service complementing the Estate’s Bistro, Takeaway and Farm Shop.

Rhug drive thru

Building a reputation for online ordering or click-and-collect can be started almost immediately, but establishing a new business plan or a new purpose-built facility won’t happen overnight.

Developing a business takes strategic and financial planning and often necessitates town planning applications – which are time consuming – all before the installation can go ahead. All in all, it could be 12-18 months from beginning to end, so it makes sense to use this time to start the investigation process now rather than later.

One thing is for sure, retailers will develop to protect themselves, but how they do this and how quickly can only be determined by them.

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Andrew Burton

Andrew Burton

Contributor

www.malcolmscottcons.co.uk

Andrew Burton is a retail and catering consultant specialising in the garden centre and farm shop sectors. Based in Worcestershire, his background encompasses 30 years of retail management, including 20 years in garden centres and visitor attractions. Andrew’s strong focus on commerciality and his understanding of customer trends is supported by the town planning experience which Malcolm Scott Consultants provide, allowing him to give end-to-end service on operational and planning issues of any size business.

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