Will the great retail nation retain its crown?
This week’s Internet Retailing Expo 2017 promised to unveil ‘the future of the retail nation.’ Industry activity last year suggests that the UK has in fact surpassed this title, and should instead be named a great retail nation. According to IMRG Capgemini, consumers spent £133 billion with UK e-tailers in 2016, and sales were up 16% compared to the year previously. Despite political and economic uncertainty last year, the retail industry as a whole remained buoyant. In October for example, retail sales volumes were up 7.4% on a year earlier, marking the strongest growth since early 2002.
The UK has a lofty reputation with tourists too, who are spending an increasing amount on our high streets. Foreign visitors spent over £700 million in British shops in December 2016, an increase of 22% on 2015. This has contributed to the flourishing of many high streets across the UK, despite warnings over their impending demise.
At the other end of the scale, the luxury goods market has also helped elevate our retail sector. Newcomers like Victoria Beckham and Jo Malone sit alongside heritage brands like Burberry and Asprey in a diverse shopping bag of British success stories.
However, events triggered last year have filtered through into 2017 and are likely to gather momentum over the year. Increases in business rates, rising inflation, the slowing of disposable income growth and uncertainty at how Brexit will play out are all likely to impact consumer confidence and spending. Will we manage to retain our retail nation crown this year?
This was, somewhat unsurprisingly, a prominent point of discussion on the show floor at the two-day Internet Retailing event in Birmingham. On-stage discussions meanwhile encompassed the most pressing matters affecting the industry today, from ‘clicks and bricks’ and mobile-first strategies, to supply chain and delivery management, and the UK’s position in a global retail marketplace.
Digital disruption underpinned and influenced the conference agenda, just as it does the current retail environment. Shoppers seek a positive, fluid browsing and buying experience, and developments in technology have both helped and hindered this process.
With the right tech and implementation strategy, retailers are now able to provide a joined-up shopping experience across devices and channels. Yet integrating new technology with legacy systems and physical outlets marks a major – often problematic – transition. Digital-first brands will perhaps find this easier than established retailers, but making the shift is achievable for all. Attitudes towards the traditional bricks-and-mortar store, for example, are starting to shift, and brands old and new are embracing technology.
At the start of the year, grocery giant Tesco announced it would be extending the availability of its mobile payments app, PayQwiq, to every Tesco store in the UK in a bid to make it quicker and easier for shoppers at the checkout. Other UK retailers are digitising their physical stores, including investing in technology to personalise the in-store shopping experience. Location-based technology, tracking sensors and digital touch points can all be employed to mine data from shoppers and adjust offerings accordingly. It’s not just a small handful of retailers who are planning on taking this path. According to recent research, by 2021 three quarters of stores will not only know when specific customers are in the store, but will also be able to personalise the visit for them.
Many retailers are understandably anxious about the coming months. UK economic growth is predicted to slow in 2017 and household spending will be squeezed. However, this may not necessarily affect consumer confidence, nor bear out in shopping habits. Remember too that shoppers young and old look to technology both as an aid and a form of entertainment. Tapping into this will help retailers ride the digital disruption wave and help the UK hold its title as a great retail nation.
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