No one expected the post mortem of 2019 to be pretty, but for the British Retail consortium to declare it to be “the worst on record” brings home just how torrid it has been out there.
However, there are some positives. Looking at the BRC’s numbers one thing is clear: online didn’t do that badly. Similarly, a look at Sainsbury’s disappointing figures for Christmas shows that the only growth it saw came from digital.
Meanwhile, Cotton Traders gets 2020 off to a flying start by launching a transactional app as part of a strategy to be ‘digital first’ and beauty brand Space NK – which has successfully bucked the downward trend in health and beauty in 2019 – has done so by an increased focus on online and the digitisation of its stores.
So is off-line retail going to die in 2020? No, but the power of online has to be recognised as both a threat to traditional retail and the very thing that could save it. That and the fact that, now that it is 2020, we officially live in ‘the future’.
Here in the future there have been some big changes. While there have been some wider issues at play in 2019, such as Brexit uncertainty – a separate issue to Brexit itself – rising food prices and changing habits, there have been some fundamental shifts in how we live.
For example, Sainsbury’s results suffered because fewer people bought games and toys this Christmas – in fact it was at a 20 year low. Why? For the same reason shoppers are changing – mobile.
The move towards tech based gifts that can be consumed on device made for significantly smaller piles of presents under the tree Christmas morning – replaced by Apple, Google and Amazon gift cards – as well as smaller piles of money crossing the checkouts of many retailers.
The future also sees younger people looking at gifting very differently: wanting recycled and ethical gifts, making their own gifts and, as said, buying more digital gifts. These changes are real and, while Brexit stirred up a lot of confusion, meeting changing demands is going to be key in making 2020 work.
One vital new approach is being taken by Game: it is asking shoppers to bring in unwanted Christmas socks into its store in exchange for store credit. While this is a headline grabbing stunt, there is a serious message behind it: people don’t want those real world goods, they want their digital fun. Now is the time to act.
The socks will go to homeless charities and shoppers can get £2 off per pair. It’s a small step, but the world has shifted on its axis just a little bit. Welcome to the future.