'People's financial priorities will be rent, not luxury shopping,' says retail expert

As stores around Ireland continue to shut their doors indefinitely, the future is equally worrisome for the heavy hitters as it is small-timers. In recent years, retailers have already found themselves in a challenging work environment as brick and mortar find themselves competing with ‘fast fashion’ and increasingly effective e-commerce models.

Retail consultant and Chairperson of the Council of Irish Fashion Designers Eddie Shanahan said there is a sense of unity given the global circumstances contributing to the crisis.

"In a funny way, everyone is in the same boat," he told the Irish Independent. "We had a very poor spring. Spring didn’t start because of the storms, so even in a normal year, this would have been a difficult start to spring.

“Stock yields would be moderately high in most stores, so when the virus kicked in, spring deliveries were already made. Now, we have a situation where the outlet those stores have to trade is online.

“However, with maybe 300,000 people – or more - out of work – by next week, there isn’t going to be a lot of spare cash going around. People’s priorities will be rent, household bills, food and medication. It certainly won’t be high-end luxury shopping.”

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Mr Shanahan said stores which are part of umbrella groups – of which most high street big names are – will have the unique expertise in navigating difficult trading times. Comparatively, independent boutiques, already operating without the same resources, will struggle in harder ways.

“Bigger stores part of bigger groups will have more ready access to finance and expertise in that area, with bigger teams to handle the situations they face. The smaller ones will be in very difficult situations,” he explained.

“When we return from our new normal, we will have a surplus of stock in the shops; so, there will be a prolonged series of sales, heavy discounting and it will be fiercely competitive in price. This will exacerbate the problem in a lot of stores. They have a lot of expenses and now they’re operating on a lower margin on your return. It’s quite a protracted problem and unfortunately, I believe some of the smaller stores will go by the wayside.”

He said the coming weeks during isolation can provide opportunity for traditional stores to up the ante with their online model, but only a dual presence will satisfy customer needs.  At least for now, several online stores remain in effect with details like semi-permanent sales in place and free delivery, but Mr Shanahan says the social nature of shopping in-store will always be more appealing to consumers, especially in Ireland.

“It’s important for small makers here in Ireland to audit their online presence. If they can’t trade effectively in the interim, they need to ensure they have a functioning outlet when we come out of this. The smaller stores will have more difficulty as some stores buy more seasonal drops,” he said.

“At this stage, the Government wage support proposal has been set up for a 12-week period, so we’re about three months out from any serious change in the situation. Will there be a boom in online shopping? What are we going to pay with? You will see a certain increase in online shopping, but not a conversion entirely.

"Most people still prefer to shop in-store and at this point, it’s easier to create an experience in-store than online. We will learn to build and communicate online during this time.

“But you can’t smell Chanel No5 online. You can’t feel the quality of beautiful cashmere online. Like it or not, we’re social animals. We want engagement and advice. I think the winners out of this will be the people who adapt to these challenges."