UK retail is in a state of transition. There has been much deal-making in the sector, including Tesco’s £3.7bn takeover of wholesaler Booker. Many retail giants sought company voluntary arrangements (CVAs), and some national chains went out of business or closed stores.
Although times have been tough, things could improve as inflation is expected to reduce and wages to rise.
Reasons for Retailer Struggles
- TheInternet and the ubiquitous smartphone have made buying online easier than ever, and since there are lesser shoppers on streets, passing trade has decreased too.
- The weakened pound and the Brexit vote have increased the cost of goods abroad, wage rises and
shortageof skilled EU workers.
- Having gone through times of less income, customers are spending less. The interest in remote work, minimalism, and tiny house movement mean the younger generation is likely to rent rather than buy. They also spend more on entertainment and telecoms.
- Most retailers haven’t even adapted to the Internet yet, let alone update and streamline their websites.
- Businesses face fines as well as loss of reputation upon non-compliance with
GeneralData Protection Regulation (GDPR).
- Apart from retail expert Bill Grimsey and team revisiting his 2013 review, there has been no coherent thought on tackling the decline.
- Uncertainty around Brexit and its effects worry consumers, which in turn affects the retail sector.
Many of you have been trying new things and experiencing positive results. Some of you have tried new store formats; some have changed inventories; yet others have adopted new technologies. The following are some more ways that can help.
Reinventing to Adapt
You can cope with decline by investing online; rethinking core systems; creating innovative, personalised experiences; focusing on your areas of expertise and finding new markets.
Experiences, not transactions
Digital, not manual: Digitalise the core, instore experience for speed and ease of use.
A chore no more: Buying unexciting, yet essential items like toothpaste can be boring. Think more like online stores who offer subscription options, such as one-tap purchases, auto-renewals, and same-day delivery to their customers to help overcome this.
Eye-catching designs: Consumers are now relying more on images or photographs to make choices. Make use of the valuable insights from these searches and present products tastefully.
Integrating AI: Use artificial intelligence (AI) to analyse big data to personalise shopping and product experiences, and to streamline operations.
Trying before buying:Introduce customer-oriented options, such as postponed payment, trial before buying, or returning/exchanging unsatisfactory products within a trial period.
AR and VR for immersive experiences: Try augmented reality (AR) and virtual reality (VR) to enhance the retail experience because customers generally love them.
Your identity matters: Customers want to engage with brands that are authentic, purposeful, transparent and ethical. Adopt a good, strong value-based foundation and project that image.
Seamless omnichannel: Provide a seamless experience on all online and offline channels you are present on—physical stores, websites, social media, catalogues, directories, etc.
Distributed commerce: Ensure that consumers can purchase products directly from the places they are visiting online without navigating elsewhere. Your product feed can be placed
Meaningful interactions: Up your social media game by using apps and social networks to engage with customers real-time.
Selling wisely: Many businesses have started marketing and selling directly to consumers by starting e-commerce initiatives. Understand what they are offering and make buying from you equally or more attractive.
Streamlined operations: Maintaining large real estate portfolios and operations is not feasible anymore. Ideally you should downsize to fewer, different, more efficient branches and processes.
Interesting inventory: Include unique, vibrant, diverse, and rare products from independent creators and artisans.
Sell abroad: Try to expand to markets abroad by researching well, seeking expert advice, and finding the right route and business model.
All is not lost. If you focus on customers and create personalised experiences for them, you will be able to adapt well to any circumstance.