Furniture News’ latest annual Retailer Review sees some of the nation’s top independents reflect on their experiences of 2020, and share a few thoughts on what 2021 might bring. Here, Steve Pickering, MD of 10-store independent Sussex Beds, offers his take on the state of play …
The best deal I struck was not actually ‘struck’ or a ‘deal’ – it was, in fact, taking full advantage of an opportunity, being the utilisation of Government-backed Covid-19 support loans (for example, CBILs and Bounce Back Loans), of which we obtained the full allocation available.
This firstly enabled us to repay all existing financing and lending, providing a 12-month pause to all repayments, safeguarding the business through the uncertainty of lockdown periods. It also removed all personal guarantees.
More importantly, though, the remainder will be utilised to fund our BHAG (Big, Hairy, Audacious Goal) plans through 2021, which includes the opening of four additional retail units.
The biggest product trend in-store/online was our premium-level product lines. During the first quarter of 2020 we implemented a rebrand of our Harrington & Abbott collection. This included new logo, look and feel, and decoration, display, PoS and promotion.
The impact of all of this has seen sales of these lines increase by +30%, which also contributed towards the increase in annual AOV by 12%.
What changed most about the way people shop was ecommerce. The second half of the year saw online revenue increase by +300% month on month.
During the first lockdown we saw a significant shift toward online transactions. The expectation was that this would fall once stores had reopened – however, this was not the case, and sales via our ecommerce channels continued to increase.
Website revenue has now increased to the level of a significant branch. Our plans are to invest and grow this stream further over the next 12 months, capitalising on this shift in confidence of our core demographic to shop online.
What put me under most pressure was, of course, Lockdown 1.0. The days preceding it were traumatic. Emergency plans were drafted then changed, and adapted then scrapped as the speed of the crisis overtook the speed of actioning.
We closed our doors with no certainty of when we would be able return. Fear and anxiety levels throughout the team soared. Fear for their families, their jobs, their financial security. Fear of the unknown.
As a leader, these are some of the greatest pressures you will meet – 48 members of the team, all looking to you for reassurance and direction. You constantly have to portray confidence and strength, but inside you have their same fears and anxieties.
If I learned one thing this year, it’s that tough times help you grow. Recessions or large disruptive events are uncomfortable and stressful, but they also provide opportunity to reflect and learn. A company which exits the same as they entered will have missed an opportunity to change, grow and improve.
We returned as a better, stronger business. We emerged with new learnings, new systems, a closer team and clearer objectives.
Looking ahead …
I’m most looking forward to calmer times. The past few years have been dominated with negative external factors such as Brexit, followed by Covid-19. As we traverse next year, I look forward to a period in which these factors will disperse, and we will enter a calmer, more positive period.
The next hot product trend is a continued move toward premium product lines. Over the past three years, AOVs have increased by 25% as our consumers look to invest in better product. I believe this trend will continue over the next 12 months, combined with a domestic recovery weighted toward investment in homes and furniture.
The trend on its way out is travel (temporarily). The impact of Covid-19 has had a devastating effect on the travel industry, and it will be one of the last industries to recover.
In the meantime, the focus for big-ticket spend will shift away from travel to more domestic spending. This will see a benefit for our industry as increased wallet share moves toward homes, gardens and furniture.
My technology priority is digital integration. We have built our business using various digital platforms, each performing different functions, from sales and fulfilment, to communication and finance.
It is our goal over the next 12 months to upgrade these where necessary to scalable systems which will link and integrate with each other – which will meet our needs as we move towards our BHAG.
The biggest challenge will be Q1 2021. Navigating the first 3-4 months of 2021 will present challenges with planning, supply chain and maintaining growth targets, due to potential Brexit teething issues, Covid-19 restrictions and possible further lockdowns.
It will require careful monitoring of information and developments to enable informed decisionmaking, to keep sales and revenues at optimum levels, and growth plans on track.
I think the ‘new normal’ will see more consumers demand omnichannel options to purchasing. The lockdown periods of 2020 have propelled the acceptance of online shopping forward through all generations.
Knowing the UK domestic consumer recovery will initially be focused on the home and home improvement makes me hopeful for the industry’s future.
For more retailer insight, see January's issue of Furniture News.
