Investment in digital technologies could add £11bn (+3.6%) to the value of the UK retail sector by 2030, and £21bn (+6.2%) by 2040, helping the industry to recover from the effects of the Covid-19 pandemic, a new study suggests.
The UK retail sector would be worth £361bn in 2040 as a result of such digital investment, rather than a projected £340bn, suggests the Revolutionise the Everyday report, by the Centre for Economics and Business Research (CEBR) and Virgin Media Business.
The growth in retail would be part of a 9% – or £232bn – improvement to GDP by 2040, the report suggests.
Remote collaboration between teams and organisations would make work both more flexible and more efficient, it says, while arguing that digital improves customer experiences by adding convenience, access and speed of service. Meanwhile, analytics and AI data help those planning and delivering services.
The report cites examples such as Dunelm’s new cloud-based digital platform that supported a 33% increase in like-for-like sales, according to its half-year 2020 figures, and, elsewhere, the use of chatbots to improve the customer experience.
Cristian Niculescu-Marcu CFA, director of economic analysis at CEBR, says: “The Covid challenges facing the UK and the entire world are extremely serious. The economic impacts alone fall far short of capturing the scale of the pandemic’s toll on people’s lives and wellbeing. Focusing on the economic implications however, history shows us that periods of economic hardship can help to catalyse technological progress and adoption, as businesses and other stakeholders seek to adapt to new realities. Within this research we have examined the potential economic impact of a wave of digital transformation, driven by the rollout of new ways of working and connecting. This could create an economic high road over the coming decades, helping the UK economy to grow while also having the flexibility to deal with future challenges.”
The report also envisages gains for the public sector to the tune of £75bn, health and social care (£33bn) and justice, central and local government (£32bn), while professional services, retail and construction together could see a combined uplift of £40bn, all by 2040.
Peter Kelly, managing director of Virgin Media Business, says: “After the toughest of years, the UK has a £232bn opportunity ahead of it which we must now grasp with both hands. By continuing to invest in new digital ways of working, we can seize this moment and help UK businesses to bounce back better.
“Moves to accelerate digital adoption are driving extraordinary outcomes across private and public sector organisations, helping them to revolutionise how they work, deliver for customers, and provide vital services for our communities. Through investing in our digital future we will support new growth, drive the UK economy forward and help the country to rebound stronger.”