the possible reconfiguration of the office and inter-related activities for the High Street and other commercial activities within workspaces
Last week I was a guest speaker for the Sussex Enterprise- Construction Forum, presenting on the subject of ‘Reimagining the office and Worklife after Covid 19’. Below is the slide show that accompanied my presentation and discussion, where I have sought to collate and present the various trends and adaptions to not just the physical aspect of the constructions but also the people and staffing impacts with some digital trends too.
Sussex Chamber of Commerce Construction Forum-presentation
I would be delighted to discuss the content further with anyone for whom the points might resonate. As a company of quantity surveyors and project managers we like to analyse what is happening within our sectors of work to help us identify and understand cost impacts and implementation requirements
The following is not original and has been pulled from many reports, articles, comments and presentations reviewed during the information gathering stage for this presentation. I hope this adds to the conversation for today and beyond. This was created for an online webinar for the Sussex Chamber of Commerce Construction Forum.
COVID is an accelerator of pre-existing trends in the market place.
‘There is no “the new normal” because that’s definitive. There is simply the normal of now’ (Seth Godin)
To win in the next normal, we will all need to embrace innovation in the strategy & business modelling.
Construction Background
- The Office for National Statistic’s latest quarterly GDP figures revealed that construction was the hardest hit sector of the UK economy in Q2 2020, contracting by 35% with a sharp 40% fall in April and then two months of month-on-month regrowth
- Construction new order data shows that in Q2 2020 new orders fell by 51.1% compared to Q1 2020. The value of new orders for the period was the lowest level of new orders since records began in 1964
- March 2020 in Europe (EU27) saw construction business decrease by 12% & the highest monthly drop ever recorded in Europe, when compared to previous month
- Construction output in the UK is expected to fall 25.0% in 2020 in a best case scenario. This will significantly affect the cash flow of most construction businesses & increase costs incurred due to delays in project completions. (Source Construction Products Association)
The Office Autumn 2020
People
- Mass working from home has benefits and this shift might be something business keep- 80% of people report enjoy working form home with 41% say more productive (Source McKinsey)
- 50% of the UK workforce would now favour working remotely for 1-2 days per week
- Changed working patterns and staggered breaks
- Reduced business trips and face to face interactions to absolute minimum
- Work environment- a flexible work environment is a key driver in retaining and sustaining staff
Physical
- Worker pressure to reduce commuter times and overcrowding in city centres could see offices shift to more of a regional hub with out of town business parks more of an attractive proposition
- Social distancing around the office space- eliminated queuing in reception areas etc with greater multi purposed activity spaces.
- Increased ventilation and upgraded HVAC installations including virus filtration units
- Remote working- strategy of why employees go to an office and how often and for how long they should be in the office will dictate ‘hot desk’ availability and density of desks to employees (maintaining social distances between desk)
- Redesign of the workspace to support organizational priorities- supporting interactions that can not happen remotely
- Opportunity for companies to remain agile in scaling up/ down in allocating or reallocating office space- interaction with spaces to collaborate and innovate
- Organised side-by-side or back-to-back working in flexible work spaces- reaffirming and redefining how workspaces should be laid out and what they look like
- Workers may visit their offices less frequently but when they do it will be to collaborate and create with their colleagues so space will be needed to aid productivity and cultivate creativity
- Branded experiences- as brand awareness and association becomes more important, occupiers will design spaces to be more a tune to organisations brand and values, combining architectural elements as well as digital branding to reflect the tenants and wider community
- Work/life integration- as more people conceive of their office space as an extension of their home or their homes as an extension of their office space, workplaces will evolve to include additional elements to facilitate a better work life balance and help increase employee productivity
- Contactless technology where possible or contact eliminators
Digital
- Covid has seen rapid adoption of effective technologies for videoconferencing and other forms of digital collaboration
- Desktops are likely to be swapped for laptops providing more flexibility where design is concerned
- A tech-enabled future with virtual replacing physical environment in enabling workplace flexibility
- Digital tracking and monitoring to track office use with sensors to review heavily trafficked areas and also advise cleaning or density reviews
- Enhanced tech capacity such as clear and concise platforms for messaging will help provide a reformation in company culture that values trust and output vs physical presence
Staffing
- Contactless thermometers- inline with public advice
- New staff pools with fewer constraints through homeworking and tech links
- Work/life balance time greater flexibility through reduced commuting time via home working
- Organizations should reconstruct and review how work is done, identify the most important processes and examine the professional development journey and the different stages of the projects- this then should be applied to post Covid working requirements
- Consider whether small amounts of mentorship undertaken in an office can be transferred to digital platforms
- Reconstruction of processes and cultural interactions to suit a remote and remodelled working pattern
- Increased levels of remote outsourced staffing with no geographic relationship to the company- this could provide upskilling
Restaurants Autumn 2020
People
- The average person spends around £14.13 per week on eating and drinking out, this figure is likely to considerably fall this year (almost half)- Source Colliers International
- 20% of diners will return to restaurants used during Eat Out to help out, that would not have otherwise visited
- UK Mon-Wed spending in restaurants was up 34% in August cf July however average spend was similar per transaction, taking account of the £10 discount to customers, this meant customers were ordering more food/ drink for a similar spend (source Mastercard)
- Eating out had become the ‘new shopping’ but with COVID there has then been a further shift towards delivery and take away Deliveroo reveal that Friday & Saturday night orders are up 36% across Europe compared to pre lockdown (this is more than 40% in the UK)
- While working form home may negatively affect restaurant foot traffic, especially in office heavy areas, it can also create new opportunities where during Q2 delivery firms reporting 50% increase in breakfast orders and 80% increase in lunch orders (Source. McKinsey & Company)
- Current consumer preferences toward health and sustainability and increased focus on value for money. Recent mcKinsey survey notes 25%of consumers state have made changes to their diet over past 3 years to align with priorities around wellness and sustainability (In 2019 one in four new product launches in UK were for vegan products)
- Online booking and contact tracing – keeping community safe with temperature checks on arrival
- Up to 50% of existing customers intend to continue using delivery more in the future.
Physical
- Restaurants will review physical location for their restaurants & associated rental agreements & even consider relocating to more residential neighbourhoods vs staying in locations close to workplaces
- Restaurants will be unable to operate at full capacity for some time given social distancing measures.
- More than 200 restaurants were handed back to landlords following the ‘Casual Dining Crunch’ of 2017-18- the pandemic will likely cause more than double that number to close across the UK as the full impact of the economic distress is felt
- Currently 30% of restaurants remain vacant (Source Colliers International)
- Vacancy rates since 2017/18 have been highest in leisure schemes (44%), shopping centres (36%), High Street (23%) and Retail Parks (13%)
- Brands will introduce roadside pickup – Five Guys opened 14 of 100 sites for kerbside and 400 Pizza Hut sites have kerbside pickup
- An expansion of off premises business- primarily drive through, delivery and take away- leading to changed kitchen configurations and dedicated stations to service these work areas
- Trend increase in ‘dark kitchens’ with no actual front of house operation to increase and accelerate. Deliveroo has vertically integrated and expanded its virtual restaurants (Deliveroo Editions) to 925 locations across Europe
- Independents and eventually new start ups will flourish in a sector of substantially lower rents but this will not totally fill the voids created.
- Increase in ‘Private’ dining spaces
- Increased spacing of covers to physically distance themselves from each other or installation of semi-permanent screens between tables (recent OpenTable survey indicated 77% of UK consumers believe these measures are important in helping them feel safe whilst dining in)
- Rethought restaurant flows, staffing and operating procedures to align to new off premises models, daypart mix and customer experience- maybe increased back of house areas dedicated to off sales etc
- Increase in business models akin to Costa Express self service coffee bars with contactless and automated services
- Review of HVAC installations and virus spread- increased HEPA filtration and the like
- Review of US consumers suggests that indoor dining in restaurants may not return to precrisis levels for months- or possibly even years. That means full service restaurant operators need a new economic model (Source. McKinsey & Company)
- Introducing new ways of providing value to customers eg by offering grocery products, take home items, or shipped product bundles through online food marketplaces
Digital
- Implementation of contactless delivery/ pick up from the restaurant
- Not entire menu for delivery/ takeaway as some dishes don’t travel too well- consider aerated fries and secure liquid containers
- Increase in cashless venues through contactless card payments
- Increase in click and collect ordering
- Redefining customer relationships through direct digital communication, loyalty programs and personalisation. Increasing data useage to improve the dining in experience for consumers including targeted local personalisation promotions and engaged customer feedback requests
- Increase in In-app ordering for table service- early advice notes that also helps increase order sizes
Supply Chain
- Leases- move towards turnover rent but at higher proportion with reduced base rents (Landlords will need to have a deeper understanding of the sector in order to set rents)
- Reduced menus to help with food costs and waste. Increased perception and requirements for quality and freshness of product and produce
- Make delivery business profitable by negotiating longer term agreements with third party delivery companies and developing in house delivery capabilities in denser markets
- In the alternative, reassess which delivery model to adopt including owning delivery logistics or using marketplace delivery company or integrated marketplace logistics company.
Staffing
- Guest are sensitive to hygiene and anything that even looks messy could translate to unclean in their minds- uniforms, hair, nails and all surfaces that customers can see need to be tidy and spotless
- F&B is not a work from home industry so always exposure to risks
- Identification and reduction of travel between restaurant venues- reduction in resource sharing. (Consider role of area manager becoming ill and having to close every restaurant they visited … zoom is new best friend)
- Splitting of works teams into ‘bubbles’
Retail Autumn 2020
Background
- UK retail sales remained robust in July with sales by value increasing by 3.2% compared with July 2019. This is the second consecutive month of growth following three months of falling sales (Source KPMG and the British retail Consortium)
- Online sales purchases accounted for 42% of all sales in July and 50.5% of sales recorded in June (people becoming less reliant on home deliveries of groceries)
People
- The longer the crisis lasts, the greater the likelihood that people prioritize online and omnichannel purchasing permanently
- People are now accustomed to staying home for weeks at a time and buying a wide range of products online
- People expect to shop less frequently in physical stores for items other than groceries, simultaneously shifting that spending online
- People now entertain brand switching due to proximity, availability, ease of use and safety considerations
- Reduced incomes sees reduced discretionary spending
Physical
- Forward thinking brands will redefine the role of their stores, streamline store operations and re-evaluate their store networks
- Stores need to offer unique instore experiences eg exclusive merchandise to drive traffic, facilitate omni-experience and improve profitability
- Traditional store metrics are incomplete indicators of potential because it doesn’t account for the role store plays in generating e-commerce sales
- Its entirely possible for a store to have weak sales and profits while being a strong contributor to the retailers overall performance
- Automation is now a necessity- self checkout, remote management, scheduling both instore and in warehouse
- Turn portion of the store into mini distribution centres, enabling convenience but also fostering community, savings on staff costs and shipping costs
- Investigate vending possibilities
- Brands will introduce roadside pickup and “buy online, pick up in store” features
- Integrate advanced technologies such as sensors, artificial intelligence and voice activation to reduce touch
- Add automatic door operators with hands free wave sensors to entries and back of house
- Encourage self service- enable scanning of products, place them in their own bags and pay through the app/ contactless, reducing all person to person interactions
- Store designs should consider limiting number of touchpoints a person has within a space and clearly messaging navigation and circulation
- With social distancing requirements putting an upper limit on the traffic that can be in stores and taking out racks and shelved stock that is available for sale
- The most successful developers will be those who create most distinctive combinations of distinctive retail offerings and learn to partner with tenants on mutually agreeable lease terms
Digital
- Accelerated adoption of e-commerce. Amazon is up 35% compared to same period last year
- Migration of sales from stores to e-commerce
- In-store omnichannel integration is now normal
- Engage in conversation with your consumers- maintain customer centric dialogue
- Instore spaces and connection to virtual spaces instore for consumers to receive advice and support from peers and participate in shared experiences
- Updated digital signage solutions to tell story of product without or limiting physical touching
- Digitized returns process
Supply Chain
- Shift store complexity upstream eg replenishment frequency, tagging, labelling
- Real time inventory solutions: clarity & transparency of stock levels in stores and at warehouses
- Monitor and adjust stock levels inventory in real time to advise online purchasers
Staffing
- Considered PPE built into stores eg sneeze guards and screening
- Increased instore staff allocations for ship from store and BOPIS processes
To see our office, restaurant and retail work here