The relentless narrative for 2017 in the retail sector has been one of doom and gloom. This isn’t surprising when you think about the headlines that have been fuelling this feeling - well-known retailers such as Toys ‘R’ Us filing for bankruptcy, Brexit uncertainty looming, and reports that showed 14 shops closed each day in the UK in the first half of the year.
This depressingly bleak retail narrative has had a little reprieve of late. The Office for National Statistics reported in October that UK retail sales fell for the first time, year on year, since 2013.
But, there could be hope on the horizon according to IHL’s ‘Debunking the Retail Apocalypse’ report. Whilst this report is US-based there are three key points of action that are relevant to the UK retail sector. These points of action can drive positive change in retailers and can help the retail community to overcome this so-called retail apocalypse.
There is a lot of distraction in retail right now, with the news of shop closures and the omnipresent/omnipotent Amazon. However, retailers cannot let themselves lose focus on customer experience. These perceived threats should not be a distraction, but rather a reminder that customer experience should be at the centre of business strategy.
Customers will simply stop shopping at a retailer if they don’t get the experience just right. They need a compelling reason to enter your shop, be it online, on the phone, via post or by physically entering your shop space. Your employees, ambience, products and seamless blending of physical and digital all need to be inviting and experiential – basically, all the things that shopping on Amazon is not.
This experience needs to go beyond Amazon’s ‘people also bought this’. Prepared retailers should have the technology and analytics in place to understand what the customer needs and wants, creating a personalised experience that they can’t get anywhere else.
This personalised experience is what should be at the core of the shopping experience. The IHL report notes that customers ‘long to be entertained. Retailers that take that to heart, invest in their people and their IT systems to improve their shopping experiences, will not only continue to survive, but thrive’. By ensuring that each customer is receiving a unique, personalised and entertaining shopping experience, retailers can ensure that they will return for more.
The last decade of retail has felt like never-ending catch-up – retailers in a state of lagging behind customer trends and expectations, frustrated that existing business processes and legacy systems cannot respond fast enough to consumer desires.
According to the IHL report, this is starting to change: 34% of all software spending in retail in 2017 was on cloud solutions. While embracing the cloud will have a transformational impact on businesses, it is simply not enough for retailers to stay relevant and successful.
In the modern retail landscape, even technology choices need to be customer-centric. As previously mentioned, retailers need to invest in technologies that will put the consumer experience first, such as analytical technology that enables them to provide personalised experiences to shoppers.
It’s true that some retailers are decreasing the number of physical stores they have open. However, the retail community needs to accept – even applaud – that these retailers are doing whatever it takes to have a profitable enterprise.
After a retailer assesses how many shops it can viably have open, and makes the decision to decrease its store numbers, it can stop concerning itself with the retail apocalypse and start to think about growth.
For many companies, right-sizing the shop footprint is the first step to a healthy and sustainable business model, and is not a sign that it is going out of business.
The statistic that 14 shops closed each day in the UK in the first half of 2017 sounds worrying, but this fact alone is not the full picture. The IHL report found that for every chain with a net closing of shops, 2.7 companies showed a net increase in shops for 2017.
By focusing on the customer experience, keeping up with the retail landscape and not fearing right-sizing, retailers will overcome the supposed apocalypse and ‘not only continue to survive but thrive’.
By Nicole Crowe marketing leader at Aptos