These are nervy times for European retailers. Where once it seemed that switching to a multichannel model that emphasised the role of stores as touchpoints for customers would likely bring success, this no longer seems such sage advice. The recent troubles of the department store sector, represented by House of Fraser in the UK going into administration despite investing heavily in its digital offerings, demonstrate how changing customer behaviour can have an impact on even the most forward-looking companies.
That’s not to say the answer is to be a pureplay or that every retailer needs to be instituting a bricks-and-mortar store-closure programme. Rather, the example of the department store sector acts as a reminder that retailers need to stay close to their customers, to understand what kinds of services their customers want and value. But that’s only a first step. Retailers also need to be looking ahead, and to be experimenting and innovating as they try to work out what kinds of services will appeal to customers in the future.
In 2019, this may be especially tough. There’s evidence that macro-economic factors are making consumers nervous. The Trump administration’s America-first policies have put the USA on a collision course with China over trade, many consumers are seeing little or no growth in their wages and, whether or not the United Kingdom does leave the EU in March, the Brexit psychodrama will rumble on for many years yet as the UK rethinks its place in the world.
A perfect storm of issues for retailers to deal with then? Perhaps, but if that is true then it is all the more reason for retailers to focus both on overall strategy and new initiatives. In this way, retailers can help ensure their underlying businesses are not just strong enough to survive whatever lies ahead, but to prosper.