2018 wasn’t a great year for the high street. We saw a succession of big names go out of business. The prediction made by the British Retail Consortium two years ago appears to be playing out in what’s been a very turbulent year for the retail sector. They predicted that there could be 900,000 fewer jobs in retail over the next decade. Retail is in the midst of a huge transformation. As consumer shopping habits change and technology is driving more people to shop online, businesses need to be a lot more fluid and better at reaction. Flexibility is the key.
Current Retail Issues
A recent article on the BBC.co.uk website said that, “As well as grappling with the shift to online, retailers have been hit with an array of rising costs – from wages, the apprenticeship levy and business rates to new regulatory changes such as the introduction of Europe’s new data law, GDPR.
The weaker pound has meant retailers have had to pay more to buy the same amount of products from abroad – costs which have proved difficult to pass on to consumers.
Demand from consumers has been subdued. This combination is putting pressure on all retailers, but it’s those businesses with underlying problems which have suffered most.
There’s also been a big shift in how consumers prioritise where they spend their money. We’re splashing out more on what we do and less on what we wear.
Retail is getting a much smaller share of disposable income than it did a few decades ago.
Online sales are also pulling spending away from physical shops so it’s getting harder for traditional retailers to make the economics add up.
To grow in the past, all retailers had to do was open new stores. A huge amount of retail space was laid down in the boom times, including edge-of-town and out-of-town retail parks.
But the traditional business model is now broken. There are now simply too many shops, and often in the wrong locations.”
So, How Do Retailers Adapt in 2019?
Retailers need to reduce the lead times so that they can be more proactive. They really must think about their customer’s needs. They need to understand what they want at different times of the year. Retailers should think about what kind of service their customers need to make them feel like they are being heard.
Retail needs a big overhaul. A lot more work must to be put into customer satisfaction and reviewing customer shopping habits and how things change throughout the season.
Businesses are still very one-dimensional – set on the four or five seasonal drops – it’s just not like that anymore. Retailers need to be fast. They need to be turning things around in weeks rather than months.
Forward planning needs to be much better too. If you have a plan, you’re more likely to succeed. Not only that, if you plan in advance, you then have time to make alterations if required.
Every business needs to understand that they’re not invincible. Look at the big players that went bust last year – Poundworld, Toys R Us and Maplin and most recently HMV going into administration.
You cannot sit back on your laurels and think you are doing a good job – you can’t get complacent. That’s not the way it works anymore. You’ve got to constantly be re-evaluating, consistently looking at your business and asking yourself how it can be slicker, smarter, efficient and more fluid. It’s all about flexibility.
Are You Social Media Savvy?
Retailers also need to be social media savvy. If you think about the businesses that went under last year and think about the retailers that struggled, did they really understand their customer profile and demographics? Did they really understand what their customers wanted? Did they understand and embrace the digital era?
Retail is constantly shifting, and to keep ahead in the ever-changing environment, retailers must stay flexible and be ready to adapt at the click of button.
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