InternetRetailing will be running interviews with the leaders of retail’s industry bodies over the course of 2018 focusing on how the industry is changing – and how they are responding. In our first in this series, we spoke to Helen Dickinson of the British Retail Consortium (BRC).
The line between physical and digital retail is disappearing as shoppers buy across channels, says Helen Dickinson, chief executive of BRC . That presents retailers with challenges she believes they will meet in 2018.
For many shoppers, says Dickinson, whether they buy from a store or a website is becoming less and less relevant.
“What is becoming more and more obvious is the line between physical and digital… is blurring even more and becoming less and less relevant,” she says. "There isn’t a solid line, a solid difference between one channel and the other channel because of the way that people shop.
“People are crossing those channels on multiple occasions as part of their shopping journey. To them, to us, to you and me, every shopper, there’s an irrelevance as to whether I’m making an online choice or a physical store choice – I want what I want when I want it. You can deliver it to me whether it’s me coming to collect it or being delivered to my home, my office, my local corner shop or whatever.”
The currently slowing rate of online sales growth, and the ongoing fall in store sales comes at a time that shoppers are themselves spending less. Retail sales slowed in 2017, compared to 2016 – a trend that is continuing in 2018. In February 2018
, online sales grew by 6.4%, while in-store sales fell by 2.4% in the three months to February. At the same time, businesses are facing challenges related to Brexit, that look likely add another layer of complication, such as changes to customs tariffs and procedures.
All these factors, says Dickinson, mean that retailers’ jobs are becoming more challenging than ever. “I think we’ll see more polarisation between the winners and the losers,” she said. “I think we will see more consolidation and in fact we’re starting to see some of that particularly in bits of the market already. And I think we will see a lot of businesses face in to their own business and get their heads down and try and do the best they can do in quite a difficult backdrop.
This year, she expects, retailers will be working to understand their customers better through data, while also dealing with new data protection rules due to come into force in May through the GDPR. These will require retailers to gain shoppers’ explicit consent to send them marketing messages.
It’s in response to this changing picture that the BRC is running its Retail 2020 campaign, envisaging a future in which there will be fewer but better jobs in the industry, as a result of factors including financial pressures and the impact of technology. The campaign sees two potential futures for retail, says Dickinson.
In the first, “the impact of those pressures ends up with a very commoditised automated almost lowest common denominator workforce,” said Dickinson. But, she argues, “There is another future that says how do we make sure that the jobs that remain in the industry are higher paid more productive, have more opportunity for more people to progress? More digital, more customer facing and with a more positive vision of what the future of he world of work in the industry looks like.”
More than 40 retailers have signed up to support that second view of the future through the Retail 2020 campaign. “What we’re going to do is share understanding and experiences in order to be able to build the momentum towards those better jobs as opposed to an alternative which none of us, or anyone who works in the industry actually likes,” said Dickinson. “The business case for it basically says if this is done well, then productivity and efficiency in the industry should improve, which is what we’re already seeing. Productivity in the UK economy is widely noted as being flat or even falling, whereas productivity in retail is rising. We want the gap between the average UK worker’s pay and the average retail pay to get narrower.”
In parallel, the campaign is measuring staff engagement and satisfaction in the retail industry. “We’re measuring a series of KPIs that say: do I feel proud to work in retail, are my ideas listened to? Do I feel valued as an employee? We can assess whether or not that metric is moving in the right direction. Idea that by tracking productivity, engagement and pay we will be able to look at whether we are on that positive trajectory towards better jobs or not.”
This approach may also serve to make the retail industry attractive to new and younger entrants. Getting the message across, though, will be about retailers going into their communities to talk to students at school and college about what a career in the industry might be like.
“I think there is a very common misconception out there that people who work in retail work in shops,” says Dickinson. “Everybody who works in the industry kind of knows there is so much more to a career in the industry whether that’s in marketing or merchandising, or buying or supply chain, or even digital type jobs.
“One of the things we did as part of retail 2020 was we looked at how many people were doing jobs that didn’t even exist five years ago. Out of 3.2m people in retail, 100,000 of them today are doing jobs that didn’t even exist five years ago. Telling stories like that will really help promote the industry. Lots of people who want digital jobs look at social media companies as a sexy place to go for a digital job but don’t think about areas taking for granted in forward thinking innovative things happening right under our noses in terms of some of the retailers and what they’re up to, whether that’s in digital, online, businesses or not.”
2018 looks set to be yet again a disruptive year for the industry. Dickinson says innovation will be a key part of the retail response to that disruption. “I think what the environment does is it puts lots of pressure on people to innovate more, and that’s where new ideas will come. They should come more quickly because the pressures are there to facilitate that to happen. While I couldn’t sit here and say what they will be, I think what we should be doing is more is continued innovation because you have to find a way to differentiate somewhere.”
And while this is set to be a challenging year, she believes the industry will rise to that challenge. “I think we’ve got a very dynamic, resilient, agile, very responsive industry in this country and so I think the excitement is seeing it evolve and change over the course of the next 12 months and beyond,” says Dickinson. “It’s a real testament to the job that retailers are doing in being able to keep delivering for their customers day in day out, when behind the scenes they’re all working their socks off.”