Throughout March, UK retail sales decreased by 1.1% compared to the same period in 2018. That’s according to the BRC – KPMG Retail Sales Monitor for the month, which also showed that over the three months to March, in-store sales of non-food items declined 1.5% on a total basis and 1.7% on a like-for-like basis.
Not surprisingly, uncertainty surrounding Brexit was yet again partly to blame for the sales slump, with KPMG’s UK retail director Sue Richardson saying: “March marked a truly disappointing end to the first quarter of 2019 for retailers. Not only did total sales fall compared to the same month last year, but no further clarity around Brexit came to light, and shoppers continue to waver.
“Retailers will be hoping for an end to this sustained uncertainty – it’s clearly not good for business – but times have already well and truly changed, and agility remains the best form of defence.”
Also speaking about the latest report, Helen Dickinson OBE, chief executive of BRC, comments: “Brexit continues to feed the uncertainty among consumers. For the sake of everyone, MPs must rally behind a plan of action that avoids no deal – and quickly – or it will be ordinary families who suffer as a result of higher prices and less choice on the shelves.”
While this all sounds very gloom and doom, it may not mean the end is nigh for UK retail. Angel Maldonado, founder of EmpathyBroker, believes that the changing circumstances will force retailers to think outside the box to ensure their continued survival, and thus bring about a change in the way the retail channel communicates with high street shoppers.
“Retailers will undoubtedly be feeling gloomy that the spending streak has come to an end. The industry had been riding a high, but the new figures are the first sign of consumers’ purse strings tightening in the face of uncertainty,” says Maldonado.
“Under these circumstances brands have an opportunity to invent new forms of value. The idea of creating experiences needs to change, shifting from a mind-set that states ‘here is my brand, experience it’, to one that says ‘here is a brand that relates to you’.”
“Competition for retailers is about locating where their consumers find value and experience, and growing that part of their business” Emma Taylor, Nimbus Ninety
Maldonado advises retailers to be meaningful and empathetic beyond reason and convenience.
“What’s more, according to Barclaycard even the warmer weather can contribute to an overall positive feeling and drive sales. Now, more than ever, consumers want retailers to be fun,” says Maldonado.
Typically, you may not think of warmer weather as a driver for tech and electrical sales, but Barclaycard’s April report – which Maldonado is referring to – shows that it is possible. The report reveals that non-essential spending saw a year-on- year growth of 3.4% in March 2019. Delve a little deeper and you see that electronic stores in particular saw year-on-year growth of 1.8%.
The report shows that despite almost half of Brits (46%) admitting to worrying about how their quality of life will decline due to Brexit, many remain committed to spending on non-essentials and one in ten even admitted they will never part with personal entertainment.
The importance of a website
So what can retailers do about the current high street slump? We’ve heard numerous times about how important it is for retailers to implement an omni-channel approach to their business, but what does that actually mean, and is there ever an excuse to not be online?
We asked Emma Taylor, founder and managing director of business networking company Nimbus Ninety. “Websites are so easy to set up these days, with programmes making it intuitive and simple. Even if a retailer is smaller, having a website that gives basic information such as stock and location of physical store gives them a connection to the consumers they hope to attract,” she explains. “Even without an online store, having a presence on social media as well as on a website can increase brand awareness.”
In the company’s Digital Trends Report, it found that 72% of retail respondents considered a website to be the most frequent method of customer access by 2022. “This demonstrates the importance of a website to a greater retail strategy,” says Taylor.
“Recently we’ve seen developments on social media platforms which also gives the capability to retailers to sell, as well as promote their products. The main disadvantages in not engaging online for retailers are the loss of data and customer awareness. How can you guide where your brand or business needs to go without data on customer interest? It makes strategy harder.”
So, what are some of the current trends around consumer shopping habits and how can retailers use them to stay competitive in the market?
Taylor says that Nimbus Ninety has seen that online sales have been growing for much of the retail sector over the last few years.
“E-commerce still accounts for a small proportion of overall retail spend. In 2017, just under £60 billion was spent online versus £306 billion in-store,” she says. “The experience of the physical store, and consumers’ attachment to shopping as a leisure activity, maintains the relevance of the in-store experience. There is also the argument that customers in- store can chance upon a product that they wouldn’t have come across if searching online. Online holds utility and efficiency, while in-store holds serendipitous discovery.
“Competition for retailers is about locating where their consumers find value and experience, and growing that part of their business. Personalisation is a huge part of this experience: 25% of respondents in our Digital Trends Report considered highly personalised products and services to be most important to their customers, second only to intuitive user experience.”
Taylor concludes: “Seamless and frictionless experience – both in terms of personalisation and UX – has been shown to be at the core of retail strategy: they are intrinsic to remaining competitive.”
What we can take away from all these reports is that there is no one rule when it comes to engaging with shoppers. Just as Brexit could mean both positive and negative things for the country, there’s a split between the benefits of physical and online retail stores.
While it may not be viable for all kinds of retailers to cover all possible routes to consumers, supplementing a physical store with an up-do-date website and some form of social media presence should be seen as the default practice if businesses want to encourage today’s shoppers to take notice of their offerings.
Entries for PCR 30 Under 30 are now open. Nominate yourself or a colleague now!