Covid-19: Boots’ COO on the power of digital and local communities

There has arguably never been a more challenging time for the retail sector, which is having to adapt quickly to a new environment brought about by the Covid-19 pandemic. The closure of physical stores for 12 weeks in the UK during the crisis, the dramatic shift to online shopping seen in recent months, and the looming spectre of a major economic recession means drastic action must be taken by retailers to ensure survival and growth going forward.

And the consequences of the lockdown are starting to be felt, with high numbers of redundancies announced across the industry over recent weeks; some as a result of retailers going bust while others close physical stores as they pivot to a more digitally-focused business model.

An example of the latter is health and beauty retailer Boots. Yesterday it announced 4,000 job losses across its head office, stores and optician teams following a quarterly sales fall of 48% for Boots UK and 72% for Boots Opticians. The retailer is now planning to continue the growth of its digital services and eCommerce business that has taken place at a rapid rate in the Covid-19 crisis.

Boots UK and Ireland’s chief operating officer, Tracey Clements, discussed this approach as well as how the retail sector has to evolve in this new normal during a session at yesterday’s Retail Transformation Live virtual conference.

Boots has been in an odd position in the pandemic in that some aspects of its physical stores remained open during lockdown (relating to pharmacy services), while others (such as beauty and fragrance counters) were closed. “Boots is an unusual retailer in that it’s neither 100% essential or 100% non-essential,” notes Clements.

Yet it has seen an enormous growth of its eCommerce operations over the last few months. This is across all areas of its business, including pharmacies that remained open, with vulnerable and self-isolating customers unable to pick up prescriptions in person. In results published yesterday, Boots’ parent company, Walgreens Boots Alliance, revealed there has been a 78% rise in sales on the platform during the crisis.

Measures taken to meet this rise in demand included the rapid recruitment of delivery drivers and adding new vehicles to its delivery fleet in the early stages of the pandemic. Clements also reveals that Boots quickly adapted a substantial proportion of its physical shops into online hubs, helping them fulfil orders efficiently.

The brand has additionally been moving some services it has been unable to provide physically to the online space, such as its virtual beauty consultations, revealed back in May

An era of innovation?

It is likely this kind of out-of-the-box thinking will need to continue beyond the pandemic. An accusation that has been frequently levelled at the industry in the past is that it is too slow to change and reluctant to innovative. A major positive from the global crisis could therefore be that retail becomes a far more dynamic and flexible industry, borne out of sheer necessity. “It’s going to be a tough time but it will probably lead to some of the biggest changes we’ve seen in retail and see really clever stuff come in,” says Clements.

Despite the impending redundancies of a number of its store staff and closure of 48 Boots Opticians practices, Clements makes it clear that physical shops still have a major part to play in Boots’ future. But in her view the experiences that high-street stores provide need to be reimagined in order to effectively entice customers back.

Keeping it local

In particular, she believes high-street retailers in general have to take into account the greater sense of localism that has occurred in the pandemic, as people increasingly recognise the need to help each other during this time of national emergency. Stores should therefore immerse themselves in their local communities. This means for national chains like Boots, more power should be devolved to local staff to create services and experiences that are tailored to consumers from that particular area. Having that local connection is also especially vital at the moment with consumer habits likely to continue changing as the crisis unfolds.

Clements explains: “It’s never been more important to understand customers; to understand how your customers live, as much as how they shop. If you understand how people live, you then know how they’re going to shop; whether they’re driven by value or they’re driven by promotion or they’re driven by convenience.”

She adds it is vital for retailers to engage in charitable and philanthropic work in their local communities as part of this strategy; continuing initiatives businesses have regularly taken in the pandemic such as raising funds for local hospitals.

There is little doubt the Covid-19 pandemic has changed the retail landscape for good. The actions retailers take now to adapt to this new world will play a huge part in their ability to thrive and develop in the future. Sadly, being forced to change at such a fast pace is causing enormous pain, primarily in the form of redundancies in retail stores as customers shift to online. This does not mean the end for stores though – community spirit has strengthened during the pandemic and ensuring shops are part of this new wave of localism could be critical to the high street surviving, in some form at least.