Research by trader insurer Euler Hermes finds that the UK retail market is one of the toughest in the world, along with Germany and South Korea. High competition, growing discounter market share and rising online commerce are all cited as factors making it hard to sell here in the UK.
In fact, the study found that 81% of UK customers bought online in 2016 – more than twice the European average. It also found that discounters had a 10% market share, which is also the most competitive in the world.
And this has been borne out by figures from the real world. While IMRG figures show some growth in online retail – 11% across July – it was the slowest growth in online retailing for the same month since 2013. Traffic levels were up, but discounting and the impact of Amazon Prime day have seen growth slow dramatically since its 18% peak last year.
But it isn’t all doom and gloom. While the UK retail market certainly faces challenges across the board, Euler Hermes finds that it is one of the most prepared to embrace digital transformation needed to compete in such and environment.
This transformation is set to be led by mobile first strategies and, increasingly, artificial intelligence.
As Sue Harris, director of ecommerce at ScrewFix, tells Dominique Corlett in our IRUK500 interview, mobile is [the] fastest-growing channel and it has been a huge driver of the growth in our click and collect business. More than 50% of visits to sites are now from mobile phones.
ScrewFix has pioneered using mobile to personalise and modernise its business, and its parent company, Kingfisher Group is poised to implement the lessons learned
Similarly, CarpetRight is turning to personalisation to drive in store sales.
These retailers are grasping the nettle and using the technology at their fingertips to re-invent their businesses for the digital age.
This is becoming the watchword for retailers as the market tightens. Technology holds the key – not just because of the efficiency gains it can deliver, but also because it is what shoppers demand.
This is why AI is becoming such a key thing in retail. Machine learning and the ability to deliver data processing on an unprecedented level is what is driving the move to proper personalisation at scale.
Taken together, mobile and AI offer the route to navigating a path through the tough UK retail market in these difficult times.
The Tamebay Ecommerce Cup
The Tamebay Ecommerce Cup 2017 will be held on September 7 and five-a-side teams are now being invited to sign up. The tournament, now in its fifth year, is moving to a new venue in Shepherd’s Bush and promises FA refs and a comfy new players’ lounge complete with screens to keep tabs on competitors’ matches.
“We had a total of 26 teams enter last year, and it was great to have both suppliers and retailers competing, with Deliveroo taking the top spot and runners up Uber narrowly missing out,” says Mark Pigou, founder of InternetRetailing Media. “This year promises to be just as competitive.” To enter a team of up to 10 people (five players and five subs), sign up here.
Sponsorship opportunities are limited to three companies: email Joey Evans (email@example.com) for more.
Find out more about upcoming InternetRetailing webinars and register for free on the InternetRetailing webinar page. You can also catch up with past webinars on the page: recent sessions have come from IBM Watson on using AI to improve the customer experience, and from SmartFocus and The Entertainer on using social to reach digital customers.
Chloe Rigby is away