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LEGAL HOW THE PANDEMIC PIVOT COULD SAVE YOUR BUSINESS Retailers can turn crisis into opportunity by ‘pivoting’ to a new way of operating. CBy Gladwin Legal partner Rosalyn Gladwin. OVID-19 continues to be at the forefront of business discussions as many retailers remain closed or tentative about reopening their physical stores. Even when stores do reopen it’s likely that foot traffic for certain sectors will be significantly down on usual numbers. Forecasts give every indication that this will have lasting impacts on the retail landscape. So, what now? This crisis has left an opportunity to highlight the importance of full integration of stores and online shopping technology. But this is a given. What you might not have considered is ‘pivoting’ to a different business process, to save costs and share resources. What is pivoting? Retailers are known for showing versatility and innovation in critical times, and there’s nothing stopping them today from turning this crisis into an opportunity. This means making changes to business operations, such as in what’s manufactured and how it’s offered. One example of a great way retailers can pivot is entering a co-branding arrangement for deliveries. This is an arrangement where one brand works with another to share delivery responsibilities and offer a new, potentially bundled, product to customers. Ask yourself: what do your customers need most right now and how can you fill that need by leveraging your business strengths with another’s? Examples of businesses pivoting We’ve seen countless examples of pivoting from cosmetics manufacturers such as LVMH making hand sanitiser, and clothing companies such as Nike and Zara using their factories to make hospital scrubs, masks and gowns. Partnerships are another useful way to pivot. They can give you access to new customers and new markets, particularly if your existing market isn’t at its best. It’s a matter of determining who can help you sell your products and what you can offer in exchange so there’s a win-win arrangement. A great example of this was by Lyft, a US ride-sharing company, and Amazon. Lyft is now referring drivers to Amazon for deliveries, allowing Amazon to keep its doors open. Co-brand deliveries: pivot checklist • Who is responsible for taking the orders? - Will the arrangement be under a new brand or the existing brands? If it’s a new brand, consider a trademark (who will own it?) - If using the existing brands, a short licence agreement is needed to protect use of your brand and related intellectual property. - Who is responsible for delivery and logistics? - If it’s shared responsibility, what percentage will be shared? • Who will pay for any insurance required? - Note there may be liability for product storage and handling, especially in relation to perishables. • How will payment be made (and whom will the customer pay)? • Who will own the customer data? • How will the parties market the new offering? Are there any minimum marketing activities that need to be conducted by each party (such as a website banner or social media posts)? We recommend entering a short-term pivot agreement (or joint venture or collaboration agreement) to outline these responsibilities and to clarify any methods through which to terminate the agreement if it’s not working out. About Rosalyn Gladwin Rosalyn is the principal of Gladwin Legal, being an expert in all facets of retail law, including commercial and corporate law and retail leasing. About Gladwin Legal Gladwin Legal is the law firm for retailers. As experts in retail law, the firm understands the legal matters that challenge retailers daily. Its areas of expertise include retail and commercial leasing, supply and distribution agreements, intellectual property, ecommerce and IT agreements, sale of business and competitions and trade promotions. Get in touch at www.gladwinlegal.com.au. 52 RETAIL WORLD JUN, 2020