Collaboration Forum Series 5: Building a brighter future (Week-8)

There is a famous quote, attributed to Russian politician Vladimir Lenin, which reads: ‘there are decades when nothing happens, and there are weeks where decades happen’. His words have been linked to the experience of living in exile, prior to the Russian revolution at the beginning of the 20th Century. But 100 years later, they have also been widely used to describe what’s happened to businesses during the Covid-19 pandemic.

“In the past 12 months, retail has experienced weeks when decades have been happening,” said Daniel Bobroff, founder of Coded Futures and a former executive at online retailer ASOS. “I believe this period has changed our outlook quite fundamentally, towards technology, for the better. Retail businesses have been dancing with technology; we’ve got engaged with it, but now is the time to get married.”

When the first lockdown struck the UK in March 2020, pet care retailer Pets at Home was one of many retailers that had to move quickly. Once it had been granted permission to stay open as an essential service, the business experienced a rapid increase in the number of online orders. It saw two years of growth almost overnight, and the 450 stores that stayed open, became places where customers could collect what they had clicked.

In the year to 25 March 2021, in which the business traded through the eye of the storm, its turnover grew by 10 per cent and underlying pre-tax profit increased by a similar margin. In the words of Jon White, finance director of the retail business: “We delivered record sales in the retail space, and if you’d have said that to me 14 months ago, I genuinely wouldn’t have believed you, such is the rate of change.”

“The role pets play in people’s lives has never been more important, and we’ve got a bigger overall market to address,” he said. “We’ve also got more ways to get products to customers, which were rapidly developed last year, and these have given us confidence in our agility. But there are also parts of the population that are now comfortable with online shopping. Previously, the ‘grey pound’ – which refers to the spending power of older people – would have been wedded to bricks and mortar shops. But that has changed.”

In the future, both Daniel Bobroff and Jon White can also see a role for greater collaboration between retail brands and other sectors of the economy. As retailers focus on customer experience, there will be new ways to take products to market, and new people to help them do it. Jon described a Pets at Home store in the Northeast of England, which sits within the larger footprint of a Tesco Extra supermarket. Daniel also said that the platform model of business – think Uber and Airbnb – will become more important for retailers to explore.

“I think this idea that we are in it together, much like the past year, should be present for the sector,” said Daniel. “It’s not just about the community of our customers; it’s also about our suppliers and technology providers, as well. I don’t believe retailers now look at their in-house tech teams and say, ‘that’s all I need’. In the case of cyber security, they’ll need to look externally for experts in the field. These are all signposts towards a more collaborative relationship with others.”

He added: “One of the really interesting shifts online, which is linked to the theme of collaboration, has been the platform business. Customers interact with the ultimate sellers, whether you are looking for a place to get away, or a taxi, for example. You create the value together and Airbnb sits on the side and monetises that. It’s the same for Uber. That’s a very different approach to a marketplace, where the retailer lists a load of products. The platform business is about empowerment, enablement and your role among other tenants. And I think it’s fascinating for retail to think about.”