Industry Insights #2 – Retail with Dominique Lamb

This month we interviewed Dominique Lamb who is currently the Director of NRA Legal and Chief Executive Officer of National Retail Association, Australia’s largest retail industry organisation. Described by colleagues as not only a great leader but a wonderful human being, it was evident when speaking with Dominique that she’s an authentic leader with a genuine passion and care for the industry.

As Australia continues to navigate various challenges of the pandemic and more specifically the economic and business impact of state level restrictions, we understand more about how the retail sector continues to pivot and innovate to survive. Hear what Dominique has to say further with her industry insights interview & leadership tips below.

What are three characteristics you feel are important for leaders and people in the retail industry to have to navigate the current climate?

I would say that resilience would be the biggest skill along with the ability to pivot quickly, and more generally I would say diversity of skills – especially in relation to digital. For our industry there’s a huge focus on digital, digital is usually made up of 9.5% of what we annually spend as Australian consumers and was predicted to go to about 15% over the next five years. All of that has become much quicker during COVID, and what we know from our retailers is that people who have been able to pivot to a digital medium of communicating with the consumers are generally doing better than those who haven’t.

Can you share insights to impact numbers COVID-19 has had on the retail industry?

Some of the big impact numbers for the month of March and April alone and where we saw the national lockdown, retailers lost about $3.6 billion. Further to this we know that only 1% of retailers at this point in time are reporting that they are likely to rehire – now as the second largest employing industry in the country that’s a concern. The big thing to watch here of course is Christmas as Christmas is an essential time for retailers. Pre-COVID we would often see mass closures in January and February across the sector. If New South Wales or Victoria go back into lockdown or have significant restrictions that occur from mid November onwards, the impact will be enormous. Victorians and New South Wales consumers are the largest spenders in the country, and this is something to be mindful of in terms of predictions moving forward and of course, the industry impact will be dependent upon what happens with hot spots and numbers.

What do you believe the long term impact will be on the retail sector?

It’s difficult to tell at this stage mainly because we’re still waiting to see what’s going to happen with certain laws. As an example, leasing codes are something that retailers are definitely heavily watching and we haven’t seen them extended in every single state, only Victoria at this point of time. There are complexities around what’s happening in the property industry, we know that large property owners and landlords are saying they’ve lost $1.6 billion dollars in unpaid rent in the last three months – and that’s not something that they can sustain either. And of course, Scentre Group has reported it’s interim loss of $3.6 billion as one organisation.

Our prediction is that we will see businesses take less space, this might mean we will still see retailers operate however they will operate in a smaller location and probably shrink their footprint. We’ll see an increase in their online presence and retailers will try to secure their supply chain processes. So there might be different places that we are importing from and many retailers might even try to come back onshore, but that’s going to be dependent on the industrial relations system.

And then of course the other thing to watch will be unemployment rates, because the more unemployed people we have the less amount of money there is to spend on discretionary items. That means you’re likely to see brands fall out of the market and also shift to a different model. That model is likely to look similar to what we’ve seen internationally, where retailers not only sell products but also services and potentially based on a subscription model.

How has the Australian buying behaviour changed across retail since COVID-19?

It’s changed a lot. We know that people are spending less time in centres as they can’t access them. Only 80% of retailers have returned to trade incentives, 70% for retailers in the CBD and less than that if you’re in a lockdown city. We also know that consumers are looking at digital content and particularly videos for longer, previously consumers would only watch digital content for a minute and now they are watching for up to 15 minutes. Consumers are absolutely okay connecting with brands differently. In addition, we know that there’s been a shift in demographics that are shopping online as well and, there’s also more patience in the market around shipping because there has been such big delays both domestically and internationally.

Do you have examples in the retail sector of innovative solutions to operating within the COVID-19 pandemic?

Most of the innovations I think aren’t probably public facing, they’re more specifically around supply chain and how they’ve dealt with that. It really comes down to retailers being able to pivot quickly and change their model from ‘just in time shipping’ to another style. Also building relationships collectively with other providers using marketplaces and creating a different connection with the consumers, such as producing more content that’s relevant to the kind of concept relating to nesting and hibernation. We’ve seen some amazing apparel brands online do things like hiding golden tickets in purchases which then allows people to purchase more items.

What type of recovery strategies might the industry consider once the pandemic ceases and businesses can return back to usual operations?

From an industry perspective, it’s really dependent around economic stimulus and what both the state and federal governments can do. We would like to see things at the state level looking at payroll tax, we would also like to see incentives or support for particular landlords in order to allow them to extend codes and be able to fund rental waivers. We also think that there should be significant investment in retraining unemployed people and incentivising small businesses, in particular, to take on more workers.

From a business perspective retailers need to sure up their cash flow and supply chains, and also make sure that they are as nimble as they can be. Definitely looking at the model of their business and reviewing how they’re interacting with customers and from this maybe changing the way that they distribute, for instance, looking at things like click and collect.