Retailers 'struggling to keep up with disruptors'
With non-essential retail not expected to open until June and retailers prioritising immediate e-commerce initiatives to drive sales, the ability to keep up with retail disruptors is the greatest long-term challenge faced by retail businesses post-Coronavirus.
This is according to new research from trade show RetailEXPO, which surveyed 2,227 retail professionals, finding that almost a quarter (24 per cent) saw keeping pace with disruptors as the top long-term challenge facing their business. This was followed by meeting changing customer expectations (13 per cent) and creating unique in-store experiences (12 per cent).
With COVID-19 anticipated to wipe £12.6 billion from UK retail sales in 2020 according to GlobalData, combined with suppressed consumer confidence, retailers will have to compete even harder for each conversion.
Ex-Waitrose managing director Mark Price told RetailEXPO's virtual conference last month that despite the downward pressure on prices and an even tighter squeeze on retail margins, now is not the time to pull back on investment in technology and innovation.
“Downward pressure on margins mustn’t come at the expense of innovation as retail reboots,” he said. “What IP you own and control and how you innovate will all be key in having a differentiated strategy against what the discounters are doing or, frankly, what Amazon is doing.”
With the government announcing the reopening of more retail stores in June, the importance of the store in continuing to deliver value through ‘unique experiences’ when shops re-open was also highlighted in the research, which is perhaps unsurprising when almost two thirds (64 per cent) of UK shoppers polled in RetailEXPO's latest report said a negative in-store experience would stop them buying from a retailer or brand again.
Almost half of shoppers (48 per cent) said that experiential activations, such as classes or tutorials, would enhance in-store experience. Yet, despite over a quarter (28 per cent) of consumers wanting to see in-store experiences that supported greener retailing, moving towards a more sustainable retail model presented a challenge to just four per cent of the retailers surveyed.
Matt Bradley, event director at RetailEXPO, commented: “In a time when retail is having to reinvent itself on an almost daily basis, the cost of customer acquisition continues to rise and each conversion has never been so hard fought.
"This means retail businesses face a stark decision – either disrupt or prepare to be disrupted," he continued. "To do this, innovation - underpinned by clever and inventive use of technology - needs to sit at the very heart of retailers’ strategies to allow them to navigate retail’s ‘new normal’."