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Being "local" can be your super-power

Here's an article I published in 2020 during the first Covid lockdown on the Umbrellar website.

It is even more relevant now as the pace of disruption to "normal" retail activity continues to ramp up.

Get in touch if you would like to discuss how our cloud-based Business Intelligence software can help you to become a data-driven retailer.

‘Going local’ will be a big buzzword for the foreseeable future in retail.

With our global supply chains interrupted by the pandemic, there is opportunity for the small and medium retailers to accentuate their localness. This means they will then look and behave differently to the national or international chains.

With the globalised marketplace online we’ve seen that any retailer who isn’t the biggest but is trying to be cheap in terms of price is going to struggle. We can all go on the internet and we all have access to the same goods, and can search to find the cheapest. This drives prices at the cheap end of the market and makes it very hard to compete on price. That’s the “Amazon effect”.

The pendulum was already swinging back towards local from big and cheap prior to Covid-19, but this is a tipping point.

There are opportunities for small businesses, the butcher, baker, and candlestick maker, to claim back a piece of their local market. You’re either going to be big and ubiquitous, operating cheaply. Or you’re going to be local and specialised. In the middle, it may be more difficult to strike a balance.

“The pendulum was already swinging back towards local from big and cheap prior to Covid-19”

With an increased local focus you’ve got a point of difference that isn’t price based but is more about your speciality product or personal flavour. Bricks and mortar retailers can claim that speciality. How should they do that?

Retailers, I think, need to go back to their strategic plan and ask, what am I famous for? How do we do things? In what ways is my offer superior? They need to align convenience and personality and put that at the centre of their action plan.

Another key question going forward is how much physical space do we actually need? That’s especially for retail property owners and shopping malls. It’s essential to be adding additional channels to the face to face channel, and this is entirely possible for any retail business now. In-cloud technologies, like click & collect ordering, online bookings and delivery apps, are really the answer to many of these questions.

“Retail technology has a big part to play because consumers now require things to be easy.”

Retail technology has a big part to play because consumers now require things to be easy. Franchises and co-operative groups will play a big part of the future as retailers band together more. This enables individual retailers to combine resources and access state-of-the-art technology solutions models.

I’m also seeing a massive uptake in terms of retailers’ strategy in terms how their customers interact online, typically across e-commerce, digital marketing and Facebook. This has been a reality check for some local retailers who have been surviving without venturing online, but all of a sudden realise they must be part of that omni-channel approach to their customers.

Retail of the future will be more online, more collaborative and more cloud-based. These aspects will be fundamental even for bricks and mortar stores – to be online, to provide e-commerce and to have up-to-date customer data that can be used for personalised communication. Retailers need to be data-driven – measuring and responding in real-time to what is popular, what is the price, and what is the demand. These trends were already happening, but they’ve been accelerated by Covid-19.

Most New Zealand retailers remain in a holding pattern. We are focusing on surviving for now. There are plenty of possibilities to adapt, and it is the retailers that embrace this period of change as an opportunity that will thrive.


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