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Power to the new retailer

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As iconic UK retail brands shut down stores, Kate Lester – Founder and CEO of diamond logistics – discusses what it means for small and emerging retailers.

Small is beautiful. Small independent restaurants, small book shops, small online businesses selling small home-made soaps... And despite the trials and tribulations of a worldwide pandemic, we’re seeing our small retail partners picking-up pace.

It’s difficult to see big iconic brands like John Lewis and Argos close stores – it’s unpopular – but COVID-19 has fast-forwarded plans which were already overdue. Argos for example, is ideal for an online business model.

When we hit our second lockdown early November, retailers were more prepared. Digital strategies were in place and resistance from some of our favourite bricks and mortar outlets was futile.

When Sainsbury's closes 420 Argos outlets and all its deli counters, 3,500 jobs will go. It’s unfortunate but the retailer has to play to its strengths and focus on where it’s experiencing success – not from customers waiting in line for a £12 lamp – but its online sales which have  more than doubled. Now is the time for bold decisions.

Anyway, perhaps the grocer will launch a ‘Deli Box’ e-commerce delivery service in 2021 which will create jobs?

Throughout the pandemic we’ve seen swift action and re-modelling by retailers. Lush is one example of this.

The scented soap maker has started to deliver products to consumers from branches in two hours. They're also offering a collection service in all UK stores which can be booked online.

Its retail stores have become its local fulfilment solution. However, these micro high-street warehouses are the most expensive commercial real estate in the UK.

Despite this, and in the current climate, retailers know that if people aren’t coming to the high-street, the high-street has to go to them.

Once high-street leases finish, we’re likely to see smart retailers ramp up their delivery options and switch to a fulfilment company. Swapping high-street stores for logistics floorspace.

According to a recent report from real estate agent JLL, we’re set to see further downsizing of store portfolios from “weaker operators.”

The research also points out that 40% of the logistics floorspace traded in the UK in July, August and September 2020, was directly attributable to online retail.

Despite the challenges retailers are facing right now, I still think it’s a good time to be – or to launch – a small retail business.

You can set up an e-commerce retail business with very little capital expenditure. We’re seeing this with our SME partners, which are upscaling despite the downturn.

Many consumers are opting to support small unique brands which are local, bespoke and individual. It feels good to pay the artist, the fashion designer or the micro-brewery. These are the retailers building a tribe.

We’re seeing consumers – the ones who can afford to – supporting the small retail businesses, that are struggling, which suggests these are the retailers which will come of the other side, as their survival is consumer driven.

In an insights report from one of our partners Shopify, entitled The Giving Economy, it says customers are choosing to directly support retailers via direct tips or gift cards, ensuring cash is still going into the business.

The disruption of large retailers and the sentimental value of  individualism – projected by the small retailers – offers a good opportunity for small and emerging retailers to start taking market share.

There’s never been a better time to start a retail business if you are able to build a tribe. At diamond logistics, as a fulfilment partner to retailers, we provide global logistics support, and a first-class consumer delivery experience. We know our couriers represent their brand on the doorstep, so we have to get the process right.

What is logistics?

Of course the role of logistics and fulfilment can be difficult for new retailers to comprehend initially. It’s the invisible function which few entrepreneurs have been taught about.

One of our partnerships at diamond logistics is with Books That Matter.  Molly Masters – the entrepreneur behind the subscription book service – founded the business in 2017, whilst in her second year at university studying English Literature. It’s gone on to be one of the UK’s most successful subscription services and the team were crowned UK’s Female Start Up of the Year.

When Molly first partnered us, she fulfilled approximately 150 subscriptions per month and projected to reach 5,000.

What Molly hadn’t realised at that point was she didn’t need to limit her subscription projections, she could scale it infinitely, in accordance with the success of the business.

We manage the post-sale process with our despatchlab platform, so she doesn’t have to worry about inventory, fulfilment or delivery. She leaves all the worrying to us. It’s been built from scratch by us, and is the only system of its kind in the UK. It’s our backbone which we continue to invest in.

The ‘new’ new retail

Retail is transforming, it has been for years. The pandemic has added a brand new layer of change, by speeding-up the process which is forming the new retail.

Emerging retailers will play a major part, and this is why I think that despite economic uncertainty, it’s a good time to start an e-commerce retail business.

And it has to offer same-day delivery. The same day blueprint – created and sustained by Amazon – has to be matched. A service which can be sustainable if you have multiple micro-fulfilment centres and predictive technologies in place.

It’s a fascinating time for retail. And as our favourites remodel, and new players emerge, it’s essential that logistics operations continue to play a critical role.

To find out how you can partner with diamond logistics as a Network Partner or Retail Client, email [email protected]

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