Technologists have long predicted the death of the British high street, with its flailing sales figures and its fragmented offline-online systems. New research, however, reveals that the retail sector could be strengthening in 2017 after years of decline and small gains.
Data from bira shows that across independent retail, more shops were opened than were closed in the first quarter of 2017. This was an increase of +414 shops in the first three months of 2017, around 4 new stores per day, compared to a net increase of just +4 shops in H1 2016 and a decline of -194 shops in the first half of 2015. Other recent bira data shows a net increase of +159 stores in 2016 overall.
These figures are supported by Vend’s customer data, which shows a 15 per cent increase in sales and retail spending in the first quarter of 2017 compared to the same period last year, based on a sample of 1,000 UK Vend retailers. In London, where Vend has a large concentration of independent retail customers, sales rose by 18 per cent in Q1 compared to last year, however spending only increased by 3 per cent.
“Despite concern around elections and the economy, its great to see retail starting off the year strong. In this kind of competitive environment though, it’s so important for independent retailers to have access to the same tools and insights the big retailers have,” Marc Cooper, vice president EMEA at Vend says.
According to Cooper, the stores that are already making the most of data analytics through retail tech are seeing some amazing results, such as London retailer Number Six which has had 40 per cent growth thanks to implementing a cloud system.
The UK retail market last year made an estimated £358 billion for the UK economy and is responsible for 2.8 million jobs. Headlines however love to depict the death of the high street, and retailers should not be giving way to the idea.
According to new Fujitsu research, The Forgotten Shop Floor, the high street holds a significant place in people’s hearts, with half of consumers believing that they will still use the high street to browse and make purchases for years to come.
The Fujitsu research highlighted that retailers are missing a trick, with eight in ten consumers saying that they are willing to spend more money with a retailer that has a better technology offering.
“Today the next wave of digital disruption is happening in-store. E-commerce has altered our expectations of the high street and we now expect physical channels to reflect digital ones and be engaging, personalised and hassle-free,” says Rupal Karia, MD, retail and hospitality, Fujitsu UK & Ireland. “The digital pace of change is faster than ever. Consumers will embrace retailers who can give them the experience they want, before they know they want it. The message is clear: consumers are prepared to spend more with the retailers that deliver digital, and leave those that don’t.”
However, growth in the sector remains cautious in the wake of political uncertainty and inflation impacting consumer confidence, coupled with costs of owning and operating stores.
One of the biggest challenges for retailers is attracting customers in the changing retail environment, according to Alan Hawkins, British Independent Retailers Association (bira) CEO. Traditional retailers are under pressure and access to the technology that enables them to reduce costs, open new outlets or pop-ups, and easily offer e-commerce options can really stimulate growth. “While our data for the first quarter of this year is still a way off the 11 store openings a week we saw in 2010, it is certainly a big step in the right direction for the sector,” he adds.
RetailStore founder and CEO Ian Tomlinson believes that the retailers who get on the front foot with retail tech may stand a chance, as the pressure to become more technologically savvy heats up from the larger retailers.
“Retailers who have not already migrated away from separated, legacy systems, will need to redesign their operations and systems around consumers, working to provide them with new flows of real time information, products, transactions and experience,” he says, “it’s the only way to survive.”
Smaller and less established retailers looking to make their own mark in this increasingly impatient and evolving market can find their gap by shifting their old systems to an omni-channel solution combining EPoS, e-commerce, mail order, supply chain and head-office software, says Tomlinson.
Tomlinson, who invented the cloud-based retail platform 15 years ago, says the company still receives enquiries every day from desperate retailers confused and bewildered by the changes in technology and how they can effectively adopt and implement omni-channel retail management software strategies.
With spiralling expectations set by the likes of Amazon, many may face a tough future, he adds.
“Things are moving at an extremely fast pace, quicker than most retailer’s fulfilment and warehousing systems can keep up with and I can only imagine that to those running their own business or for bigger SME’s it’s a frightening time.”
Among the benefits of offering customers multi-channel options, internally this foresight can help with cash flow, as stock and warehousing could be accurately forecast across the entire organisation through predictive sales and suggestive purchase ordering through to optimisation of all warehousing and merchandising.
“Retailers who have redesigned and rolled out customer centric systems and processes for speed, convenience and omni-channel customer experience, will be the winners of 2017 and beyond,” says Tomlinson.
The biggest retail trends affecting the British high street today
The Fujitsu report looked at the weak links in high street stores today and revealed six key insights that should serve as a wake-up call for independent retailers across the country.
1. High street tech isn’t up to scratch: two in five consumers often experience poor tech in-store
2. 75 per cent of consumers can get more information by using their phones than asking staff; 73 per cent can get it faster
3. Two thirds of employees use their own devices to bridge the gap
4. 75 per cent of shoppers say Amazon or eBay would become their go-to store if they had a physical presence
5. Bricks and mortar are still important, as 79 per cent of consumers use the high street for browsing for products or the physical shopping experience
6. 75 per cent of consumers don’t have any real loyalty to high street retailers – they will shop with whoever offers the items they need, at the price they want and in the experience they want to shop in