The recent demise of many well-known high street brands means that retailers are under increasing pressure to ensure a profitable peak season. Here Leigh Moody, UK Managing Director at SOTI, offers Total Business insight into the fragile tactics of retail management and avoiding potential collapse, with an analysis of the current retail environment and tips on how to maximise returns.
With Black Friday and Cyber Monday on the horizon, this will be the first true test for retailers, many of whom generate up to 30% of their annual sales during the holiday season.
Last year, Marks & Spencer, John Lewis and Tesco, three of the UK’s biggest retailers delivered disappointing Christmas figures. This resulted in M&S and Tesco ending the day by significantly falling in the FTSE 100 index with more than £1 billion collectively wiped off the value of their shares. And 2018 hasn’t been much brighter – recent headlines have been filled with store closures, as the likes of House of Fraser, Mothercare and Toys“R”Us fall victim to death of the high street.
A combination of increasing rents and business rates, along with the fall of the pound and its knock-on effect on UK shopper spending habits, has resulted in an extremely worrying and turbulent time for the UK retail sector. The question is – who will be the next victim in the decline of the high street?
Retailers risk falling behind the tech trend
The retail industry is notorious for being extremely fast paced, and several technological advances has put increasing pressure on brick-and-mortar retailers to keep up. In recent years, innovations such as the Internet of Things (IoT) and Artificial Intelligence (AI) have completely transformed the way brands are engaging with their customers.
New technologies such as in-store tablets, online chatbots and automated processes have raised the bar when it comes to the level of customer experience retailers are able to provide, but also, the level of experience customers now expect as a result. According to our research, 67% of shoppers are more likely to shop at a store that integrates technology, and over two-thirds believe retailers that utilise more technology enable a faster shopping experience.
Consumer purchasing behaviour is changing. Shoppers want high quality products at the best possible price, as soon as they can get it, and are taking their shopping online to achieve this. In fact, according to a survey by PwC, 31% of people will be completing their Cyber Week shopping using just their mobile phone while recent figures predict that UK shoppers are set to spend a record £1.54 billion online during Black Friday, up 13% based on last year’s pre-Christmas discounting day.
Gearing for success
While disruptive technologies such as augmented reality and drone delivery have been pegged as the future in the retail industry, experts agree that the technology that is changing retail is not the overhyped stuff of tomorrow, but the more mundane things that are happening today.
For the brick-and-mortar retailer, technology such as digital signage, kiosks and tablet scanners help shoppers find what they are looking for, while Mobile Point of Sale (mPOS) and self-checkout terminals make payment quick and easy. Retailers must consider a mobile-first strategy across their entire on and offline operations to streamline the value chain, from supply to distribution to shop floor in order to shrink their inventory and increase product velocity.
Retailers should be offering personalised services, and mobilising retail staff through technology to streamline intelligent customer interactions. If store retailers want to remain competitive, they need to be agile and adopt an integrated system that makes online to in-store transactions seamless.
Minimising downtime – maximising profits
However, with new technology comes new challenges. As retailers deploy more in-store technology, they are intensifying many of their existing mobility management challenges and introducing many new ones. If a fault should occur during peak season, companies need to find and fix touchpoint and app problems as quickly as possible to reduce downtime as failure to react quickly could impact negatively on customer satisfaction and sales.
To combat this, companies must implement a robust and secure integrated solution to ensure seamless integration across both online and offline channels and create an omnichannel shopping experience for their customers. Whether the consumer chooses to purchase in-store, online from a desktop or mobile device, or a combination of both, the customer experience must be seamless and consistent otherwise retailers could risk becoming the high street’s next casualty.