I’ve spent the past two weeks meeting and speaking to as many industry leaders as possible to try to find out how fashion retailers are planning to overcome the uncertainty following Brexit.
This week there is at least one answer to the many questions raised, as it was announced that Theresa May is to become Britain’s next prime minister. A “remain” supporter before the referendum, May nonetheless assured the nation this week: “Brexit means Brexit and we’re going to make a success of it.”
At a dinner at John Lewis’s Oxford Street flagship in London last week, managing director Andy Street spoke about what the Brexit vote means for the fashion industry: the most pressing issue of which is the decline in exchange rate. Street pointed out that, although John Lewis Partnership has hedged its foreign exchange risk for this year and the first half of 2017, problems could start to arise in the second half of 2017.
However, he emphasised that, despite the disruption, the retailer will continue with its existing strategy, and concentrate on anticipating how the market and shopping habits are changing, ensuring innovation is happening across all areas of the business.
John Lewis spreads its investment across creating more experiential experiences in store, implementing innovative new tools to improve the online experience (John Lewis has partnered with FindSimilar to improve online search) as well as back-end operation systems (the new Magna Park distribution facility in Leicestershire is due to open in autumn this year).
Street highlighted the importance retailers must put on providing a consistent experience across all channels and the best possible customer experience to try to overcome any reduction in consumer spending following the referendum.
Continuing to push businesses to be market leaders through challenging times will help to ensure a retailer stands out from its competitors.
Another angle retailers are looking at is international expansion. While we are in this period of uncertainty and investment decisions are put on hold, what retailers can do is explore which markets should be a focus now and in the future. Those retailers currently focused within the European Union can look investigate markets further afield.
This period of economic uncertainty is likely to last a while yet, but retailers must focus on what they can control: in the short term, focusing on maintaining sales in the face of potentially weakening consumer confidencecapitalising on non-UK customers, and looking further ahead, ensuring they explore all future expansion opportunities, and focusing on maintaining sales in the face of potentially weakening consumer confidence as the months go by.
Retailers that are as agile as possible and are set to adapt to circumstances as they change will be the ones who survive these challenging times.