COVID or NO COVID: Never Quit Retailers!

Covid e retail

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For the first time since the post-war period, our nation encountered a commercial and social crisis presented us a change in lifestyle, habits and behavior in the purchasing process.

Since the reopening of the sales points, in mid-May, XT Retail begun to monitor the performance of the stores in the different product categories.

Our twenty years has allowed to deal with professionals from various markets, from large distribution to clothing, from catering to the optics sector up top many other sectors where we have managers connections.

As many have already realised, the advent of this pandemic has given a further advantage to those companies that have been focusing on online sales since long ago, creating even greater disadvantages to those who believe and still focus on traditional retail.

Covid and retail - Village Enna

And it is not an euphemism as the data are evident; italian retail trends about -20% (in the best cases) up to almost -60% of encashment compared to the same period of the previous year. Exceptions for food in tourist areas, GDO and pharmaceuticals.

First weeks of May had deceived technicians as the economic data were not particularly negative, but sometimes very reassuring; unfortunately all was simply originated to the desire to gratify themselves with some purchase.

But once the initial euphoria passed, the situation encountered the previsions. These data are also supported by a series of countermeasures in order to let large-chains not only to exploit the payroll subsidies but are already considering the hypothesis of a closure of stores in Italy and abroad.

Everyone knows the Zara’s situation (in view of a closure of 1200 stores worldwide), or some historic Italian companies that have declared bankruptcy agreement.

Thus inducing a great number of unemployed counting a few hundreds of thousands of professionals.

After this necessary and implacable premise, it is clear that we cannot stop at these negative data, but a wider analysis is indispensable to understand how retail can revive in offline mode.

There is no doubt, however, that Covid 19 gave rise to an evident situation, that is the indiscriminate opening, that in the last twenty years of shopping centers and sales points, had reached an intolerable level and excessive in comparison to the request.

Therefore, it is unpleasant to know about shut down, there is necessary to be conscious that, as a matter of fact, something have gone beyond.

In unsuspecting times, we had already written that, in our opinion, the offer of goods (such as clothing, footwear, eyewear, cosmetics and others), was reaching levels that were no longer sustainable for the market and for consumers.

Furthermore, the advent of large outlets has meant that this offer has increased at favourable prices.

And it is precisely on the outlets that we want to focus and to tell you about our shopping experience at the Village of Enna which has confirmed some of the beliefs we have had for some time now.

The first consideration concerns the prices that we still find today in full price; simply the products still cost too much … and useless to pick on consumers, the problem is the production costs and the cost of labor.

Until our government puts in place a real and concrete policy of lowering employee costs and simultaneously  a tax reduction policy, it will be difficult for retail to raise again.

This is the main reason why outlets, in the last four months, with rare exceptions, have maintained their turnover and, although with some discomforts, have been able to face the crisis.

Therefore, excluding  the food sector in the touristic area and GDO, all the other retail divisions have suffered a lot in these four months, from our viewpoint, also penalised by a wicked decision to postpone the sales the first days of August. A sensational own goal that many retailers have tried to remedy by disguising sales with ad hoc promotions.

All the shares of 3×2 or 50% discount on the second or third purchase were wasted.

Covid and retail - Village Enna

After these comments, the images at the Enna Outlet show that, although the pockets of Italians have lightened, by applying a price and offer policy appropriate to the historical moment it is still possible to support an offline business.

Although this shopping center is not exactly located in an easy area, and with a very usable road network, it appears very good both in terms of organization and practicability and offer.

The immediate feeling is not to be  in the classic shopping center or outlet with an “L” or square plan, but in a real Village accompanying you on a pleasant walk as if you were in a small village.

We were aware of finding all the most prestigious brands in the footwear, clothing and accessories sectors, but we did not believe, knowing well all the other outlets in Italy, that the offer was so wide and above all so advantageous.

Our visit began around 16:00 on an unidentified Thursday, late of August, convinced that we would find few people; indeed, until 18:00,  we found a lower attendance, although in some stores (the most prestigious brands) we began to see some customers.

Starting at 18:00 the attendance increased exponentially, showing that, although the warm day people were attracted to the center.

Therefore we shop and realise the most attractive offers.

We were pleasantly acquainted that with 171 Euro, we bought three pairs of sneakers (New Balance and 2 Puma), in addition to a k-way jacket at 38 Euro (unthinkable 8 months ago in the same context).

In fact all the stores were granting discounts ranging between 60 and 75% of the fixed price, so we had the opportunity to get sport shoes at 25 Euro.

From the pictures you can also see that sometimes for the most prestigious brands there were also queues of 15/45 minutes.

Once the visit is over, what are the final considerations ? And what advice would we like to give to our retailer friends?

The question is not easy to extricate.
Certainly, more than ever, by now, great appreciation will be a trained, fast and empathetic professional staff for the store.
Customers have various ways to shop, but nothing can replace the human contact and the skill of a good salesman.

So invest in your sellers, motivate them and make them grow.

A second tip is to reposition yourself: cut the deadwood and focus on fewer aspects, but better.

Finally, stand out from the crowd by choosing strategies, brands and range of products.  Risk something that others don’t.


by Paolo Zanardi – XT Retail

by AN shopfitting magazine no.159 ©