Will UK Retail Ever Be the Same Again?

Working in the retail sector can be challenging, and that's only been amplified by the lockdowns, social distancing restrictions and supply chain setbacks this past year. Thanks to the development and roll-out of the COVID-19 vaccine, there is light at the end of the tunnel; but is it possible that the pandemic has changed the retail space forever? Having to also contend with changes brought forth by Brexit, many UK retailers are in search of long-term solutions to help them not only stay afloat but get back to growing.

UK Retail considerations after COVID

After a year filled with uncertainty, NetSuite UK and RF-SMART customer Frescobol Carioca tells us about the steps they took to get their luxury beachwear brand back on track.

“As a company, COVID came to affect us during a time of growth. Until last year, the name of the company was growing very fast. When we had the first lockdown in March, no one knew exactly what was going to happen.” – David Vaz, Warehouse Manager

With 3 retail stores in prominent Central London locations, the news of an indefinite lockdown was devastating for the company. Frescobol had been evaluating their retail operations for some time, which was no surprise given the uplift in online purchases over the past decade. The added financial pressure from the pandemic forced the owners to close all 3 stores before the summer.

COVID-19 also put Frescobol’s wholesale revenue stream in jeopardy. Once the first UK lockdown was underway, they quickly began to incur losses. “We lost probably around £750,000 in a month. Most of our customers around the world were wholesalers - they just shut down the shops”, said David. By March, the majority of their staff had been furloughed.

Figures from the ONS (Office for National Statistics) reveal that the British retail sector saw the largest annual fall in revenue during 2020 since records began. But conversely, online sales increased by 46% year-on-year – the highest annual increase since 2008.

Creating New Opportunities

In an effort to regain control, the Frescobol team began sharpening up their eCommerce strategy. Instead of repeating the regular discounts and sales they would typically offer, they focused on making their full-priced items more enticing. This required some out-of-the-box thinking. “We made a promotion where you could customise your own beach bats,” explained David. Product personalisation was a creative way of adding value for the customer, whilst cleverly increasing the margin per sale.

“We ended the year around 45% up on revenue on the online side of our business, with almost 1,000 more orders than the year before.”

Having well-established relationships with other British online retailers was another enabler for Frescobol’s recovery. “70% of our income still comes from wholesale,” said David. Their partners include online heavyweights like Mr Porter and Zalando. Whilst sales made through third-party vendors will produce a lower margin, this has helped Frescobol meet the necessary order volume to survive the year.

Like Frescobol, if you’re a brick-and-mortar retailer with a growing focus on eCommerce, be mindful of some of the inventory management challenges that could crop up along the way. Plan ahead for things like:

  • Changes to order volumes and sizes
  • Increased strain on your processes
  • Potentially greater marketing costs

If you’d like to explore mobile NetSuite Inventory Management software as a solution to these hurdles, speak to our team

The Need for Reliable Processes

During their most difficult period, David was fulfilling all orders from the warehouse single-handedly, as most of their staff were on furlough. Could he have achieved this without having a mobile barcoding solution to rely on? “It would be impossible with the amount of SKUs you have in the warehouse if you don’t have a system,” said David.

“You have a lot of SKUs that are similar… if you don’t have a system and you start mixing up the wrong styles, you’ll send the wrong items out, and you’ll have a lot of customers upset. We used to have a lot of that before we brought in RF-SMART.”

Frescobol is now fulfilling 40% more orders than they were when they first implemented RF-SMART in 2018. Despite this uplift, they have been able to reduce their warehouse staff by 50%. It turns out that the efficiency they gain from mobile allows their team to be much more productive, meaning a smaller cost for the business.

The UK government’s plan for unlocking the country is now underway, and David and his team are looking forward to the opportunities that are to come. With the possibility of travel this summer, Frescobol Carioca’s luxury beachwear will no doubt be in high demand. Whilst the business is projecting growth once again, they are mindful of the uncertainty that still remains, and plan to continue leveraging the processes that got them through the past year.

“Yes we have grown, but we probably wouldn’t be open if we didn’t have partnerships in place like we have with RF-SMART.”

Read the full case study on Frescobol Carioca’s implementation with RF-SMART:

Read the Case Study