Labour needs to lose the faction whose natural habitat is the lib-non-dems to that party. They were really just coat tail hijackers anyway, worshiping at the altar of Tony. (social globalists never quite had a ring to it imo). That would consolidate True Labour and their only issue would be how to reconnect with the traditional working class.
That should be possible.
But its just too early for them right now, as the polarisation means people want to let the UKIP threat linger, so UKIP, Cons will get pro-Brexit votes and LND anti-brexit votes.
I think once we are out of the EU, to the extent that a deal has been agreed-not all the buggering around that we know will go on for some time afterwards - Labour will make a huge comeback then. People will have their country back and the repair to the social fabric can begin.
So for the next two years if I was labour I'd be prepared to not stand or to lose in a few by-elections, and instead use the time wisely to get my manifesto ready for the GE