Ahead of our 26th Retail & Leisure Trends Summit, we caught up with David Scott, National Head for the NatWest Group Leisure and Retail sectors. We are proud to be hosted by NatWest for this in-person event in September 2022.
The sectors David covers capture a diverse range of clients ranging from multinational, FTSE 100 listed entities through to new ventures at the start of their business journey. David’s purpose-led strategy seeks to deliver outcomes that support a just transition to a low carbon economy, remove barriers to help the economy build back better and help deliver insights and learnings for all customers and colleagues.
Consumers change behaviours quickly! I thought the acceleration to online was here to stay, but I’m seeing a shift to physical retail as we all shop around more. It's key to excite your consumer, but also recognise value and service must be spot on. You don’t get a second chance. Retail and leisure have always been reliant on consumer confidence and performance has commonly been cyclical, so although we need to recognise market pressures and how that impacts different demographics, let’s not talk ourselves into problems.
Some of the best successes we’ve seen have involved partnerships in terms of physical estate, online platforms, pan-sector and with trusted market advisors. These approaches are key to ongoing success.
One more thing to consider is ESG and it isn’t likely to go away despite Covid, cost of living pressure or geopolitical unrest. We are all responsible and need to act now. Learn from those that are ahead of you and ensure all your staff understand why what you’re doing is important and their role.
What are you hearing are the biggest challenges for retail & leisure operators and how are NatWest responding and supporting?
Without HMG support during Covid, a lot of operators wouldn’t be here today. Interactions with your banks as this support is repaid need to be relationship led not simply transactional, it’s important that companies aren’t overly stretched beyond realistic repayment capabilities. We’ve seen too many failures due to simply having too much debt.
The sector is underpinned by its staff. Recruitment, retention and how you make your employees part of the business is key. We need to look after them and ensure they understand where the business is going, its values and their part.
Increased costs continue to impact the market and businesses are understandably taking steps to protect their profitability. But it isn’t all about passing these costs onto the consumer, the focus needs to be on how we work with our supply chains to ensure there’s a win-win outcome.
What is NatWest doing? We are investing in education and training on ESG. What it means and what we can do. We are also looking at sector-specific support packages, discussing with our customers what their pressures are and sharing collective solutions we’re seeing across the portfolio. Remembering relationships is key and pressures are typically due to factors outside management's control.
What do you think we can expect to see for the rest of this year and beyond in terms of key trends to look out for?
The winners will have a seamless customer experience and be perceived to deliver value. Consumers will drive and demand operator change on sustainability regardless of cost pressure and they will switch if they don’t believe the operator is playing their part or values don’t align. Direct-to-consumer will also continue to build.
Consumer discretionary spending behaviours will change at speed and short supply chains or certainly those able to adapt quickly will be better placed to survive.
What excites you about the retail and leisure sector? Are there brands or concepts you’re particularly inspired by or interested in?
The operators, entrepreneurs, and the resilience to survive. Recognising all the pressures, I wouldn’t want to work in any other sector. Covid has shown we care about each other, and these sectors will deliver recovery and future positivity. I think we’ve learnt from past behaviours and are far more responsible.
In terms of inspiration, it’s the brands that have demonstrated their ESG values and are delivering on that positivity. I’ve also seen they are often very happy to help educate others that are earlier on in their journey.
Why do you think sessions like our joint event, the 26th Retail and Leisure Trends Summit on the 22nd, are important for the industry and what are you hoping comes out of the afternoon?
We work best when we are together and it provides a voice across the industry to remind us we aren’t alone. For me, it will be an opportunity to reacquaint with people I haven’t seen for a long time and simply say hello.
But I find these events help inform my understanding of what’s really happening in the market, allowing me to adapt my strategy to continue supporting the sectors.