Next, one of the biggest British retail names, recently reported ‘better-than-expected’ quarterly results but raised a red flag on Brexit-related risks to its business and the industry as a whole. With threat of online competition already causing uncertainties, ambiguity around Brexit has added to the challenges keeping retailers alert.
This warning aligns with our Transforming Retail Operations research, which highlighted that 6-in-10 retailers fear higher costs that may emerge from Brexit. Possible concerns may include higher importation tariffs and delays at UK and European ports, ultimately forcing retailers to make tough decisions. Additionally, leaving the European Union with ‘no-deal’ may influence employee confidence in the sector, have a serious impact on staffing and ultimately affect the ability to deliver seamless experience to consumers.
With so much at stake, retailers may want to start preparing for various uncertainties in the event that the UK leaves the EU without a transition period or a free trade agreement in place.
Next’s increase in profits differs to some of the disappointing news from other High Street brands, many of which reported store closures and major job losses over the past year.
Retailers are aware they may need to face Brexit-related challenges, and that something needs to change, but what is the answer? What can be done internally to ensure retailers remain productive and competitive throughout the transition period and beyond? One way is to focus on maximising the effectiveness of the variables they can control.
Managing external disturbances by updating internal processes might sound counterintuitive, but the reality is that small operational inefficiencies can have a huge impact on the overall business performance. Addressing these problems early can increase the company’s potential for long-term success and development. Most successful companies are responsive and have the ability to quickly adapt to change.
Toys R Us is, unfortunately, one of the most recent examples of retail downfalls; exposing the struggle some traditional retailers are currently facing. In order to maintain their competitive advantage, retailers must ensure their business models are up to date and reflect the rising trends .
Adopting an agile approach to operations
What Next did differently was: innovation. This approach ensured its continuous success, and dated back to its early entry into catalogue sales following the launch of Next Directory in 1988 – the brand’s innovative approach to home shopping. The move was a natural fit for the retail industry at that time, and led to the subsequent rise of online shopping, giving Next a distinct advantage over its rivals.
Next can be classified as an early adopter, and adaptor. And it still remains today, as it continually seeks a ‘more agile’ approach to its operations. While Next’s physical stores today may be less successful than other parts of its business, the business focuses on different ways to utilise the physical locations to its advantage. Next implemented concessions to increase revenue, sought to give customers other reasons to visit stores and most recently announced it is ‘well advanced’ in preparations for Brexit.
Companies with a leading future outlook recognise that utilising the maximum potential of their operations requires a plan for what’s ahead. That means carefully considering current processes within the business and identifying where a small change can have a significant impact.
A small change makes a big difference
Outdated internal processes, such as manual staff scheduling, is one area that significantly increases costs in retail. Not only in terms of valuable management time spent on planning and redrafting, but also in terms of meeting employee satisfaction and ultimately ensuring business productivity.
Smarter, data-driven approaches to scheduling can transform a fundamental function underpinning a retailer’s success. More importantly, getting this right means delivering better in-store experiences for customers. By investing in tools that turn day-to-day tasks into real capabilities with long-term benefits, retailers can differentiate their brand.
Now more than ever, this industry must aim to overcome operational inefficiencies and embrace tools that can support forward planning and help the business in this period of uncertainty. It is about tackling issues before they arise by adopting smarter methods and technologies where they really matter – right at the heart of the business.
By John Russell, account manager at Rotageek