After a tumultuous 2020, the overriding mantra of running a business for 2021 is: be flexible. Here, industry experts give their predictions on what you need to know to survive the pandemic with your health, wealth and business intact. Tom Vaughan gathers the facts.
Keeping customers engaged during lockdowns and tiered restrictions has been one of the many challenges of the past year, and 2021 promises more of the same. So with continued restrictions in the offing, what sort of marketing strategy should businesses be adopting?
The overwhelming consensus among marketing professionals is think local. "Businesses can't forget that their customers have supported them throughout 2020, and they need to offer encouraging incentives to stick with them during 2021," says Frankie Reddin, co-founder of A+F Creative.
"Throughout lockdown 1.0 we came to understand the importance of ‘community', not just in a branding sense of the word, but those who we are directly in contact with."
Kristie Goshow, chief marketing officer for Preferred Hotels & Resorts, agrees that 2021 should be about reconnecting with your local and loyal customer base: "Consider an ‘honest stories' series; this is your ‘doorstep exposé'. How well does your local community know you? How did you get to where you are? How do you source your food and beverage? Now is the time to go deep and get personal. We all love true, authentic content, and today we are all neighbours sharing similar challenges."
PR and communications consultant Hugh Wright agrees: "Even if you are closed, you can still talk about the business in a way that feels engaging and authentic. Share recipes and kitchen techniques, bios of the team, and stories about your suppliers and produce; and don't feel that you can only talk about your business – share what's happening in your local community, too."
As well as thinking local, the other key take-home is: be flexible. Don't rely on muscle memory: "Do not lean heavily on past data, segmentation or personas – these have probably changed quite dramatically," says Goshow. "We have a natural tendency to lean on the past. Consider it evaporated. We are in blank canvas territory."
We have a natural tendency to lean on the past. Consider it evaporated. We are in blank canvas territory
And make sure you are ready to roll with the punches: "Plan much shorter term than you might usually," says Wright. "You would typically have a top-level marketing plan for the year, with the details tightened up on 30-60-90 day basis. For 2021 it might suit businesses better to plan quarter by quarter, or even month by month, to avoid investing time, resource and money in initiatives that might never happen. Agility and creativity are the skills we'll need to survive."
Never before has the physical and mental wellbeing of your workforce been so important – nor has it been so hard to monitor and support. With more uncertainty around the corner, and the end of furlough looming, how can businesses make sure they put staff first?
Jane Sunley, founder and chief executive of employee engagement experts Purple Cubed, says operators can concentrate on five principles: "Consultation, communication, coaching, re-entry and engagement." The first three deal with managing staff in the long, potentially lonely months of lockdown and furlough.
When it comes to consultation: "Update your understanding of people's individual circumstances," she says. "Understand the challenges and logistics of each and every one and work out how best to ramp up your support for them through isolation."
For communication, rather than sending long emails that can drag furloughed employees into work business, which is not permitted, make sure they can readily access updates and other information.
"The easiest way to do this is through your comms app or a company Facebook page," she says. "Set up regular, though optional, check-ins so that people can continue to connect with the business and their colleagues."
With a full return to work now a probability rather than a possibility in the next six months, Sunley says now is the time to bring learning and development people out of furlough. "Set them to work producing learning and much-needed ‘together time', via webinars for example, to get everyone up to speed ahead of their return. You could create a real buzz and have a lot of fun with this."
When your employees do return, make sure you are ready with a re-entry plan. "It's so important to think about the human side of returning to work, since work life as they know it is going to be very different," she says.
Sunley's back-to-business check-ins include: understand unique challenges so you can plan the best possible return to work arrangements; check up on people's wellbeing; and think about engaging them so that they can quickly become as productive as possible.
On this final subject of engagement, Sunley says don't assume your employees are all the same motivated, goal-driven individuals as they were pre-Covid. "They might have taken this time to reconsider their priorities and recalibrate their goals and aspirations." The answer is to have one-to-ones as soon as you can to understand how people feel and how you can help support their future goals. "Overall, take a people-centric, pragmatic approach and communicate the hell out of the situation," she concludes.
For owner operators, when it comes to property "the only certainty will be uncertainty" in 2021, says Chris George, principal associate at Shoosmiths.
Julian Wilkinson, restaurant director at property company Shaftesbury, says the best landlords will be more than willing to have these conversations: "The key is collaboration between operators and landlords. Our position is very much that we and our tenants are dependent on one another. This means listening to one another, understanding one another's perspectives and businesses, and ultimately working together to find practical solutions, rather than taking opposing sides."
The prospect of furlough finishing, rate relief ending and VAT returning to normal looms large on the horizon. As does, of course, a vaccine and a return to full operations for hospitality businesses. Combined, this could all serve to cook up a perfect storm for tenants.
"I don't believe we're going to see like-for-like trade compared to 2019. It'll be something closer to 80%," says Simon Chaplin, senior director, corporate pubs and restaurants at Christie & Co. "But landlords will say ‘you are not as badly off as one year ago'. They will want something back. Landlords are under pressure as much as tenants – they will be looking to get some of that money back." Chaplin says having conversations with landlords as early as possible about these scenarios is imperative.
With vasts amounts of money to try and claw back from a disastrous 2020, George says the properties that will perform best in 2021 are those that are flexible enough to work within the ever-changing restrictions.
"Those which appear to have been least affected are those which have made social distancing part of their offering. Some bars have filled ‘spacer tables' with mannequins and props. They make the most of signage so that ‘don't sit here' becomes ‘our inanimate guests are partying here today'. It's a subtle difference but one that shifts the feeling from restrictive to inclusive. Embrace the regulations that are in force, and are here to stay for the foreseeable future – make them part of the experience."
There will undoubtedly be many losers from the past year, but some will have embraced the situation. Chaplin says: "As much as there is pain being felt by some, there will be opportunities for others." The closure of some businesses could well benefit those who have ridden out the storm without too great a loss. "We're going to see a good number of operators looking at sites that normally they wouldn't be able to because landlords were looking at too much covenant strength," he says.
And for those looking to expand, the suburbs is where Chaplin sees the most opportunity. "I think the real winners in 2021 will be destination food pubs with a garden and car park – I can see them having a terrific summer."
I think the real winners in 2021 will be destination food pubs with a garden and car park
Once again, the biggest challenge when it comes to business financing in 2021 is going to be uncertainty, says Graeme Smith, managing director at AlixPartners. And the only way to prepare for uncertainty is to try and second-guess every eventuality.
"This year is more about scenario analysis than forecasting," says Smith. "We have one scenario where the vaccines will be rolled out effectively and, from spring onwards, there is a pretty rapid bounce-back to businesses. At the other end of the spectrum, vaccines are not as effective or the rollout is problematic. It's a case of assigning probabilities to each of those and the answer will probably be somewhere inbetween."
The key, he says, is understanding how you would react under those different scenarios. "In the downside scenario, you have to think what levers you can pull with regard to the ‘four Cs' in crisis management: your costs, preserving cash, engaging with your creditors to get more flexibility, and asking yourself if you need more capital. If the worst case does happen, ask yourself whether you will have enough flexibility in those areas to manage it."
Alexandre Santamaria, managing director at hospitality consultants Aware Hospitality, agrees: "Run at three projections with various scenarios. One where restaurants are fully open from February, one where curfew is maintained in Q1 and Q2, and one where curfew is maintained all year. Based on these, you should be able to measure your need for restructuring your business, its model and costs."
It shouldn't all be doom and gloom, however. "There is no better time to invest than now," says Santamaria. "Think about it: by 2021, rents will have kept dropping, premiums on existing leases will have disappeared in the majority of cases and competition will be reduced due to all the business closures."
There is no better time to invest than now
But this comes with one caveat: don't rush into anything. "If you are planning to raise money for your expansion or capital expenditure needs, delay as much as possible. In this market, money is expensive. Meaning that, in return for cash injections, the cost will be either higher in interest rates or amounts of shares. Interest rates are calculated against risk, which is very high nowadays."
When it comes to the operations side, 2021 isn't just complicated by the ongoing Covid crisis but by Brexit too – both of which could have big repercussions on the day-to-day running of a business.
There are three important areas where it's key to plan for: staffing, supply and technology. With a huge swathe of the industry having spent much of the year furloughed, businesses closing down and our exit from the EU, now's the time to make sure you are crewed up for 2021, says Santamaria: "Do whatever it takes to try keep your team members with you throughout the crisis – there could be a massive shortage of staff in 2021.
"Finding qualified staff could be difficult – many foreign workers will have left after ending up unemployed, Brexit has kicked in, and finally, whoever is still around will have not benefited from any training for the past 12 months due to closures and cost-cutting exercises."
After investing in their people, the next area businesses should consider investing in is technology, says Peter Martin, vice-president at CGA: "There are trends which have been accelerated by Covid and within hospitality tech is obviously one of those. There's no going back on that. Ordering online and on apps will continue because there are undoubted advantages. The biggest change for consumers is how they now get the bill: if it's online, why go back to paper?"
The adoption of new technology needn't just benefit customers – it could give businesses an edge in what is doubtlessly going to be a very competitive market: "Although capacities will be down, businesses will be competing and encouraging people to come out, using data from those sources and analysing what consumers want," says Martin.
The last aspect businesses to plan for is the potential upset to supply chains caused by Brexit: "The knock-on effect of Brexit is going to be key," says Martin. "How that plays out is going to be important if there are shortages. Are people going to have to switch suppliers? How that's going to affect menus? Will they have smaller menus?"
Reducing a menu doesn't necessarily mean limiting what you do, says Martin: "It's about being a bit more precise and providing excitement elsewhere. But with the uncertainty about the supply chain and Brexit, the fact is, no one really knows what the hell is going to happen."
Foodservice in 2021: Ian Thomas, chief executive, Bartlett Mitchell
"It is clear that both events and hospitality will take longer to recover following the pandemic. We hope that, by the end of 2021, we will see levels closer to those pre-pandemic.
"We are already seeing clients looking at how they can get people back to the workplace as soon as possible. It must be noted though: our worlds have changed forever so our sector will be very different. The areas of our business which involve true bespoke delivery or technology are expected to offer good opportunities for growth – such as BM Delivered [the company's delivery service, offering packaged meals direct to the workplace, and meal kits for clients to cook at home] and PearPay [a new contact-free food app enabling customers to order food straight to their desks and minimise the risk of transmitting coronavirus]. It's in these areas we feel we can add real strategic value to our clients and their activities.
"I think we'll undoubtedly see a range of other innovations and launches in the next six to 12 months as a direct response to Covid. That said, things can change very quickly, so it is too soon to make any firm predictions.
"The next few months will be very telling so we, like the rest of the business world, will be watching very closely. The agility and resilience that our teams have is going to be crucial in helping us tackle the next 12 months."
Hotels in 2021: Stuart Procter, chief operating officer, the Stafford Collection
"Across the Stafford Collection we've ended up with sites in Tiers 3 and 4. The Stafford London and Northcote in the Ribble Valley cannot open, which is beyond frustrating.
"We've invested tens of thousands in PPE, thermo-cameras and making the venue Covid-safe.
"Now we've been through 2020 we've pared everything back across our three businesses. We've evaluated every cost down to the penny, including, unfortunately, our people structures. So therefore we are nimble, flexible and we've got new channels of distribution and new pipelines. For example, in Northcote we're selling 500 gourmet food boxes a week at £100 a box. So that's a big pipeline that we came up with during lockdown that I think will be with us forever.
"I'd say I'm more realistic than optimistic for 2021. I think if our London hotels can do 50% occupancy, that would be fine. If we are allowed to open Northcote, it will have a strong year. It did its best ever year in 2020, despite being closed for three months. The staycation market was extremely strong. Overall, 2021 cannot be any worse than 2020 – so we're ready."
Restaurants in 2020: Charlie Baxter, co-founder, Pluma, Amersham
"I'm trying to be optimistic about 2021. I think January will probably be a better month than it usually is – people won't be travelling or going away skiing. I think if some of these restrictions lift after April people will want to go out and see friends.
"Spring and summer – if we get some good weather – could be a great season. The staycation trend really helped our area –we've got hotels either side of the restaurant and they pull people from all over the country. If that continues, this year could be great.
"We first opened on 17 July in 2020, so all we've known is Covid – the screens, masks, the restrictions. We've always expected the unexpected and been ready to change and adapt and this year will be no different. If you get an announcement on the Thursday, on Friday you have to call your guests and let them know what the situation is. A lot of extra work comes with that. But you have to do it to survive – there's no real way around it.
"One of the great things to come out from 2020 has been how amazing the community in Amersham is. Everybody is shopping local, they're going to the local pubs and restaurants, and there's a real sense of banding together. It feels like we can pretty much get through anything."
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