Af­ter months of mil­lions of dol­lars in loss­es, sharp salary cuts and sig­nif­i­cant job loss­es, re­tail re­opened on Mon­day.

While the sec­tor’s fu­ture still hangs in the bal­ance due to lin­ger­ing con­cerns about COVID-19, econ­o­mist Dr Vanus James be­lieves Gov­ern­ment has to take the lead and play an ac­tive and an­tic­i­pa­to­ry role.

He said the pan­dem­ic has made every­one aware that such risks are sys­temic and can­not be man­aged by in­di­vid­ual busi­ness­es or even in­sur­ers alone.

“The re­open­ing of re­tail is a roll of the dice, not a sure thing. We are still un­sure about our abil­i­ty to live eas­i­ly with COVID, in­clud­ing with the in­creas­ing prob­lem of long-term COVID,” James told the Busi­ness Guardian.

A col­lab­o­ra­tive so­cial re­sponse, there­fore, is need­ed that re­quires the par­tic­i­pa­tion and lead­er­ship of Gov­ern­ment it­self.

This, James ex­plained, can be achieved by part­ner­ing with lo­cal busi­ness­es and the in­ter­na­tion­al in­sur­ance com­mu­ni­ty to pro­vide cov­er­age for pos­si­ble fu­ture pan­demics.

A good ap­proach, he sug­gest­ed, is to ini­tial­ly tar­get small and medi­um-sized re­tail en­ter­pris­es that rou­tine­ly deal in sig­nif­i­cant cash.

Ac­cord­ing to James, the de­sign could in­clude the self-em­ployed, all of whom have been bad­ly af­fect­ed by COVID, not­ing that to achieve this most ef­fec­tive­ly, pre­mi­ums would have to fi­nance broad cov­er for busi­ness­es.

“But if the pan­dem­ic cre­ates need in ex­cess of the con­tract­ed sums, Gov­ern­ment’s pre­mi­ums, per­haps com­ing from the HSF (Her­itage and Sta­bil­i­sa­tion Fund), would have to fi­nance cov­er­age of the ex­cess,” James sug­gest­ed, adding that as with many na­tion­al in­sur­ance schemes, par­tic­i­pa­tion would have to be manda­to­ry, much as now ob­tained with the Green Fund and Busi­ness Levy.

He said vol­un­tary par­tic­i­pa­tion, how­ev­er, would not al­low achieve­ment of the blan­ket cov­er­age re­quired, part­ly be­cause pre­mi­ums would be very high and un­af­ford­able with­out the man­dates.

“Just as is rel­e­vant to any scheme to pro­tect jobs and de­vel­op­ment op­tions, it would be im­por­tant that ben­e­fits are trig­gered and paid based on clear­ly es­tab­lished ac­count­ing records that all par­tic­i­pants must main­tain with stan­dards they must sat­is­fy,” James al­so sug­gest­ed.

He fur­ther said the in­sur­ance so­lu­tion should al­so guar­an­tee a sim­ple, ef­fi­cient and re­li­able claims han­dling and pay­ment process.

And, to­geth­er with the es­tab­lished ac­count­ing so­lu­tions, the strat­e­gy would pro­vide cus­tomers with fast and mean­ing­ful sup­port in the event of the next pan­dem­ic.

Ad­di­tion­al­ly, as for most small busi­ness­es, James ad­vised that it’s al­ways a good step for re­tail busi­ness­es to self-in­sure against risk the old-fash­ioned way by cre­at­ing a re­serve with a fixed per­cent­age of gross sales each pe­ri­od and run­ning the busi­ness with the rest.

This, he said, would sure­ly pro­vide some cov­er against fu­ture lock­downs.

He not­ed that rea­son­able es­ti­mates sug­gest a tar­get of at least 10 per cent, adding that gen­er­al­ly, such self-in­sur­ance guar­an­tees a ris­ing sav­ings pool, which in­creas­es the gross fi­nanc­ing ca­pac­i­ty on which to mount re­cov­ery and re­build­ing.

Be­yond be­ing a good idea, the sav­ings ef­fort is per­haps now be­com­ing an im­per­a­tive since COVID lock­downs might not be be­hind T&T.

Ad­di­tion­al­ly, the ag­ile re­tail­er would al­so be on the look­out for op­por­tu­ni­ty to di­ver­si­fy to­wards ne­ces­si­ties— the el­e­ments of the lo­cal econ­o­my that can­not be closed for too long if the so­ci­ety is to sur­vive, even in a pan­dem­ic, James said.

Holis­tic so­lu­tions

Dur­ing the clo­sure, many stores would have shift­ed their at­ten­tion to e-com­merce plat­forms to meet their needs.

But will this be enough to help in a mean­ing­ful fi­nan­cial re­vival of the sec­tor?

ICT and dig­i­tal econ­o­my strate­gist Tra­cy Hack­shaw rec­om­mends that a co­he­sive and com­pre­hen­sive dig­i­tal and/or dig­i­tal trans­for­ma­tion strat­e­gy is re­quired to en­sure that tech­nol­o­gy is ap­plied to the right ar­eas of the busi­ness at the right time.

Hence, any in­vest­ment that is made can have max­i­mum ef­fect and im­pact there­by, re­duc­ing cost pro­file and max­imis­ing rev­enue.

It is vi­tal­ly im­por­tant that re­tail­ers do not view tech­nol­o­gy as a panacea to the chal­lenges they face as in sev­er­al cas­es, the is­sues that are in­her­ent in their busi­ness mod­els can­not be fixed by sim­ply “digi­tis­ing away the prob­lem.”

Crit­i­cal­ly, Hack­shaw said, while stan­dard e-com­merce so­lu­tions like a web­site, on­line store and dig­i­tal pay­ments are nor­mal­ly high­light­ed as the key el­e­ments of a dig­i­tal strat­e­gy, these can­not tru­ly trans­form a busi­ness with­out al­so look­ing at all of the as­pects that im­pact its cost and rev­enue pro­files.

Ac­cord­ing to Hack­shaw per­haps some of the low­est pri­or­i­ty ar­eas that should iden­ti­fy as be­ing at the high­est pri­or­i­ty to be trans­formed would be those that can be im­pact­ed us­ing sup­pli­er re­la­tion­ship man­age­ment (SRM), lo­gis­tics man­age­ment and cus­tomer re­la­tion­ship man­age­ment (CRM) so­lu­tions to bet­ter un­der­stand and re­spond to the re­quire­ments of all of the stake­hold­ers in a busi­ness’ val­ue chain.

He said en­gag­ing SRM and lo­gis­tics man­age­ment tools to stream­line and syn­er­gise in­ter­ac­tions and trans­ac­tions on the sup­ply side can po­ten­tial­ly re­duce its cost pro­file by sev­er­al per­cent­age points which not on­ly af­fects the bot­tom line but can dra­mat­i­cal­ly mod­ernise and re­form the way a busi­ness con­ducts its op­er­a­tions at an in­ter­nal lev­el in­clud­ing in­creas­ing em­ploy­ee pro­duc­tiv­i­ty, per­for­mance and en­gage­ment.

Fur­ther, CRM so­lu­tions al­low en­ti­ties to ad­dress de­fi­cien­cies re­gard­ing cus­tomer ser­vice de­liv­ery by bet­ter un­der­stand­ing their cus­tomer base, proac­tive­ly deal­ing with any ser­vice prob­lems that may arise and by im­prov­ing their abil­i­ty to more ef­fec­tive­ly com­mu­ni­cate with them.

Equal­ly and crit­i­cal­ly, CRM tools al­so pro­vide busi­ness­es with the plat­form to cap­ture the nec­es­sary da­ta to en­hance their prod­ucts and ser­vices that would al­low them to of­fer bet­ter tar­get­ed and more cost-ef­fec­tive mar­ket­ing cam­paigns.

Tra­di­tion­al re­tail­ers, Hack­shaw said, must al­so use this op­por­tu­ni­ty to move be­yond the stan­dard im­port, buy and sell ap­proach and now skil­ful­ly use the avail­able dig­i­tal plat­forms—many of which are cloud-based and can be de­ployed on ei­ther an on-de­mand or pay-per-use ba­sis—to en­hance their val­ue propo­si­tion to their ex­ist­ing and prospec­tive clien­tèle.

“Ide­al­ly they would have been best served by us­ing the pre­vi­ous few months to take a close, hard look at their busi­ness mod­el and de­ter­mine where and how they can im­prove their ex­ist­ing busi­ness process­es through­out the sup­ply and val­ue chain, par­tic­u­lar­ly in terms of ac­quir­ing goods and ser­vices, and in de­liv­er­ing those goods and ser­vices to cus­tomers,” Hack­shaw ad­vised.