The new retail reality

Contents3 Executivesummary

5 TherapidevolutionoftheUKhighstreet

8 Thenewconsumergeneration

11 Thenewwaveofretailtechnology

15 AfterBrexit:retail’snewplayingfield

18 Casestudies

20 Conclusion

22 Abouttheauthor

23 AboutthisresearchInteractivereport

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Executive summaryTheUKhighstreet:ahotbedofopportunity.

ForretailersacrosstheUK,thequestionofwhethertoinvestinhigh-streetstoreshasneverbeenmorechallenging.

Therapidriseofdigitalretail

Ontheonehand,onlinesalescontinuetooutpacetheriseinoverallretailsales.Furthermore,withexpectationsshapedbycompaniessuchasASOS,customersareclamouringforretailerstoprovidemorepersonalised,hyper-convenientwaystoshop–whichareenabledprimarilythroughdigitalchannels.1

Usingstorestoconnectwithcustomers

Ontheotherhand,aphysicalstorewillalwaysbeavitalchannelthroughwhichretailerscanfosteramoreintimaterelationshipwithcustomers.Theimportanceofface-to-faceinteractionindeliveringasatisfyingcustomerexperiencehashelpeddriveanumberofonline-onlyretailers,includingAmazonandAlibaba,toventureintorealestateforthefirsttime.2

Lowconfidenceisstiflinginvestment

Formanyretailers,though,therapidgrowthindigitalshoppingcouldleadtophysicalstoresbeingviewedasuneconomicalorevenredundant.Atthesametime,therecentincreaseinstorevacanciessuggeststhattheBrexitvotehascompoundedretailers’hesitancetoinvestinopeningnewstoresandimprovingexistingones.3

YetBarclays’surveyofover2,000UKconsumersrevealsthatdemandforavibrant,diversehighstreetremainsstrong.Ourresultssuggestthatthosethatsettheirshopsapartfromtherest–usingdigitaltoenhancethein-storeexperience–standtowinagreatershareofconsumers’mindsandwallets.

1https://www.marketingweek.com/2014/10/22/can-asos-blaze-a-trail-in-personalising-online-retail/2http://www.forbes.com/sites/greatspeculations/2016/02/11/why-would-amazon-open-physical-stores/#93255043a1ab3http://www.spring-board.info/benchmarks/

Theimportanceofface-to-faceinteractionindeliveringasatisfyingcustomerexperiencehashelpeddriveanumberofonline-onlyretailerstoventureintorealestateforthefirsttime.2

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Inthisreport,weshareinsightsfromourresearchtohelpretailersofallsizesdevelopastrategyencompassingbothdigitalandbricks-and-mortarstores.Thekeypointscoveredare:

Consumersstillwanttoshopin-store,despitethegrowthinonlinesales

Insharpcontrasttotheviewsofsomecommentators,oursurveyshowsthattheBritishhighstreetisaliveandwell.Shopperssaytheyaremorelikelytovisitthephysicalstoresofnationalandlocalretailersoverthenext12monthsthanshopwiththemonline.Manystillvisittheirlocalhighstreettobuygroceries(46%)orsimplytowindowshoporbrowse(27%).

Furthermore,mostconsumersstillhaveaclearneedtoseecertainitemsinpersonbeforemakingapurchase:63%ofrespondentssaythereisalimittotheamounttheywouldspendonlineonanexpensiveitem.

Retailersmustdomoretoquenchshoppers’thirstfordiversity

Whileconsumerscontinuetovisitandenjoytheirlocalhighstreet,theyclearlybelievethatthereisroomforimprovement.Inparticular,oursurveyshowstheyarecryingoutforawiderrangeofvibrantanddiversestores.Agreaterproportionofrespondentssaytheirhighstreethasdeclinedoverthepastthreeyears(45%)thansayithadimproved(22%)–andthenumberonereasontheygaveforthatdeclinewasthatthevarietyofstoreshaddecreased.Thetopthreetypesofoutletsthatcustomerswouldliketoseemoreofareindependentspecialistretailers,independentcafesandrestaurants,andboutiquestores.

Cleveruseofdigitaltechnologycouldhelptodrivefootfall

Astheyseektoreinventthein-storeexperience,retailersmaywanttoexperimentwithdigitaltechnologies.Morethanhalfofrespondentssaythattouchscreenfeatures(65%)andsmartfittingrooms(57%)wouldmakethemmorelikelytovisitastore,whilemobileandcontactlesspaymentsareviewedasusefulratherthan‘justanothergimmick’.Theresultsalsorevealagrowinginterestinnewertechnologiessuchasaugmentedandvirtualreality.

Empoweringcustomerstousetheirmobiledevicesinstores–forexample,toreceiveinformationaboutspecialoffersfrombeacons–couldbeparticularlyvaluableforretailers:oursurveyshowsthattheuseofmobilechannelsissettogrowsteeplyoverthenext12months.

ConsumersremaincommittedandloyaltoBritishretailerspostBrexit

Forsomeretailers,theeconomicuncertaintycausedbyBrexitmayhavedampenedenthusiasmforinvestinginphysicalstores.Yetourresearchindicatesthatconsumerfaithintheretailsectorremainshigh:overhalfbelievethatBritishretailerswillhelpthecountrywithstandtheeconomicuncertaintyofBrexit.And65%believewehaveadutytosupportBritishretailersandBritishgoodsaftertheBrexitvote.

Inaddition,notwithstandingtherecentdipinconsumerconfidence,just22%ofconsumerssaytheyfeellesslikelytodaytospendmoneyonbig-ticketitemsthantheydidbeforeBrexit.

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The rapid evolution of the UK high street Despitetheriseofdigitalshopping,thereisfirmconsumerdemandforawell-functioningandwell-looked-afterhighstreet.

TheUKconsumerhasbeenkeytorecenteconomicgrowth.Followingaperiodofpost-crisisstagnation,retailspendinghasbeengrowingsteadilysince2013–supportinganexpansionineconomicactivityandemploymentgrowth.In2015,retailsalesvolumesroseby4.3%–an11-yearhigh–withoverallhouseholdspendingincreasingby2.8%.4

Sweetspotforconsumers

Largely,thisisbecausethepasttwoyearshavemarkeda‘sweetspot’forUKconsumers:sentimentandrealspendingpowerhavebeenboostedbycheaperenergy,risingemploy-ment,near-zeroinflation,retailerdiscounting,slightlyfirmerearningsgrowth,wealtheffectsfromrisinghouseprices,andaseventhsuccessiveyearofrecord-lowinterestrates.

Ashiftinshoppingbehaviour

Thegrowthinconsumerspendinghasnot,however,beenuniformacrossallretailsectors.Wecanseeevolvingconsumerhabitsandtechnologicalchangedrivingashifttowardsonline,convenienceanddiscountchannels.

Broaderspendingdataalsopointtoashiftinthepatternofconsumers’discretionaryspending,withagreaternumberofhouseholdsoptingtofocusonexperiences–entertainment,eatingoutandholidays–ratherthanclothing,electronicsandotherhouseholdgoods.

ChangingfaceoftheBritishhighstreet

Together,thesetrendshavedisruptedthe‘traditional’Britishhighstreet:

New arrivals Alongsideanumberofbig-namecasualties,traditionalmainstayssuchasbookshopsandnewsagentshavegivenwaytoconveniencestores,charityshopsandpoundshops.

Polarised growth of discounters and higher-end retailers Thesenewentrantshavemadeconditionsparticularlytoughforoperatorsinthemiddle-marketsegment,withfiercepricecompetitionfromonlinecommercefurthersqueezingprofitmargins.

4http://www.ons.gov.uk/businessindustryandtrade/retailindustry/bulletins/retailsales/july2016

UKretailsalesvolumes(Index:2013=100)

85

90

95

100

105

110

115

Jan-0

6Jul-0

6

Jan-0

7Jul-0

7

Jan-0

8Jul-0

8

Jan-0

9Jul-0

9

Jan-1

0Jul-1

0

Jan-1

1Jul-1

1

Jan-1

2Jul-1

2

Jan-1

3Jul-1

3

Jan-1

4Jul-1

4

Jan-1

5Jul-1

5

Jan-1

6Jul-1

6

Source:OfficeforNationalStatistics,RetailsalesinGreatBritain:August2016.

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Empty spaces Vacancyratesalsoremainhigh,reflectingatrendofdeclineinthenumberofretailstoresandinconsumerfootfall.AccordingtotheBritishRetailConsortium/SpringboardFootfallMonitor,high-streetstorevacanciesnationallyaccountedfor10.1%ofthetotalnumberofoutletsinJuly2016–a15-monthhigh.5TheworstaffectedareasarethenorthofEnglandandYorkshire,witha15.8%vacancyrate.6

Despitethisdisruption,oursurveyshowsthatdemandforadiverse,well-maintainedhighstreetremainsstrong:81%ofshoppersarelikelytouseanationalretailer’sphysicalstoreoverthenext12months,and77%areplanningtovisitalocal/independentretailer,makingthesethesecondandthirdmostpopularshoppingchannels.

5http://www.spring-board.info/benchmarks/6http://news.sky.com/story/shop-vacancies-rise-above-10-in-town-centres-10537295

Yettheresultsalsoshowthatthereisarealneedtoinjectinnovationandenergyinthehighstreet.Almosthalf(45%)ofshoppersfeelthattheirlocalhighstreethasworsenedoverthepastthreeyears,andthissentimentisparticularlystronginthenorthofEngland–potentiallyreflectingthehighvacancyrateintheregion.

“Asaretailbusiness,it’sreallyimportanttostandforsomething–you’vegottohaveapointofdifference.IlookatanumberofretailerstodayonthehighstreetandIthinksometimesthosepointsofdifferencearen’tstrongenoughinthecustomer’smind.”

Simon Belsham,CEO,Notonthehighstreet.com

Themaincriticismisadeclineinthevarietyofstores,whilemorethanathirdofshoppersalsonoteadeteriorationincleanlinessandgeneralappearance,andthatitis‘justlikeanyotherBritishhighstreet’.

Amongthosethathadseenanimprovement,alargervarietyofstoresandbettercleanlinesswerethistimeidentifiedasthebiggestpositivechanges.Thisimpliesafairlydiversepatternacrossdifferentneighbourhoodsandregionsandawideningdividebetweenmoreprosperousareasandless-advantagedretailpockets.

Thinkingback overthepastthreeyears,doyoufeelyourlocalhighstreethasimprovedorgotworse?

Got significantly worse

Got worse

Don’t know

Improved

Significantly improved

No change

4%3%

18%

30%

33%

12%

44%

43%

39%

22%

20%

18%

18%

16%

15%

14%

11%

11%

9%

It is cleaner/smarter

Larger variety of stores

More cafes and restaurants opening up

More discount stores available

There is more to do in the evening

Availability of locally sourced produce

You are made to feel welcome to browse

Higher-end/luxury brands opening in our area

It feels more ‘villagey’ or authentic to the area

It feels safer

Availability of produce from foreign countries

More health and beauty services

Fewer discount stores available

Whatspecificthings doyoufeelhaveimprovedoverthepastthreeyears?

Thedrawofcafeculture

Oursurveyalsosuggeststhatcafecultureisreshapingthehighstreet,withoneinfourconsumersvisitingacafeorcoffeeshopdaily.Anincreaseinthenumberofcafesandrestaurantsisidentifiedasapositivefactorby39%ofthosewhohadseenanimprovementintheirlocalhighstreets.

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Theretailandhospitalityoutletsconsumerswouldliketoseemoreontheirhighstreet

Charity shops

13%

Art galleries

11%

National retail chains

20% 23%

Cinemas, theatres orentertainment venues

CINEMA

17%

Chain cafes and restaurants

CAFE

Discount stores

29%

Independent specialist retailers

44%

Independent cafes and restaurants

36%

Restaurant

National supermarkets

24%

Boutique stores

28%

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32%

33%

47%

25%

13%

21%

12%

12%

31%

19%

53%

27%

14%

25%

9%

10%

36%

26%

49%

24%

6%

20%

9%

14%

22%

18%

55%

13%

6%

18%

14%

21%

30%

21%

39%

20%

10%

16%

19%

14%

Wider variety of products

Products that are better suited to my personal taste/needs

Better value

Better online shopping experience

It’s easier to return items after I’ve purchased them

More frequent sales/discounts

Pleasant environment inside the store

Loyalty schemes

Personal electronics

Clothing Health and beauty

Groceries House and garden

The new consumer generation Bettervalueandfastdeliveryarekeytodrivingcustomerloyalty,whilein-storetechholdsthepotentialtodrivefootfall.

Inrecentyears,thebalanceofpowerhasshiftedfromretailerstoconsumers.Thesluggishrecoveryfromtheglobalfinancialcrisishasengenderedamorecautiousandprice-sensitivebuyer,whoseshoppinghabitshavebeentransformedbyecommerceandtheincreasingproliferationofdigitalandsmartdevices.

Better-informedconsumers

Thegrowthofsocialmediaandprice-comparisonsiteshasallowedconsumerstomakeinformedpurchasingdecisions,erodingbrandandretailerloyalty,whilecreatingamorepolarisedenvironmentofdiscountretailers(formostbasicitems)andhigher-end,premiumretailers.

Shiftingallegiances

Asonlineshoppinghasrevolutionisedtheconvenienceofretail,sobuyershavealsodisplayedanincreasingtendencytoswitch–bothintermsoftheretailerandthetypeofshoppingchannelused.Withm-commerceenablingshopperstocomparepricesofalmostanyproduct,andwithpeerreviewsonsocialmediaempoweringthemfurther,theconsumerhasmorechoiceandinformationthaneverbefore.

Switchingmightbemoreprevalentthaninthepast,butoursurveysuggeststhatUKconsumersretainadegreeofallegiance,witharound71%ofshoppersusingbroadlythesameretailersastheydidthreeyearsago.

Manyfactorscouldaccountforthis,suchasthedominantpositionofincumbentretailers,concernsoveronlinesecuritywhenitcomestolesswell-knownretailers,andtheroleofretailerloyaltyschemes(whichdespitehavinglostsomeoftheirpotencystillappeartobeanimportantconsiderationforasizeableminorityofshoppersinoursurvey).

Ifyoumostlybuyfromdifferentretailersnow,whatmadeyouswitch?

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Thatsaid,forthoseconsumersthathadswitched,thesearchforbettervalueiscitedby49%asthemajorfactordrivingthischange(thefrequencyofsalesanddiscountingalsorankhighly).Amongthosethathadn’tswitched,priceisalsothemainfactorthatmightpersuadethemtohotfootitelsewhere.

Socialmedia:agrowingchannelforcustomercomplaints

Comparedwiththreeyearsago:

• Thenumberofconsumerswhooptforsocialmediaasachanneltoqueryorcomplaintoretailershasincreasedfivefold

• Consumersarefivetimeslesslikelytosendphysicalposttoqueryorcomplaintoretailers.

Hyper-convenienceanddeliverydemands

Alongsidetheconstantpressureonretailerstomeetbuyerexpectationsonprice,theabilityforcustomerstoshopanytime,anywherehasledtogrowingdemandonretailerstoraisetheirgameinotherareas.

Intheconvenienceeconomy,whereon-demandservicesarebecomingincreasinglyprevalent,moreshoppers(andparticularlythemillennialgeneration)areexpectingbusinessestobe‘alwayson’,regardlessoftheirsizeorlocation.

Onabroadlevel,thisexplainstheshiftfrombig-box,out-of-towngrocerformatstosmaller,centrallylocatedstoreswithatargetedproductrangesupplyingpreparedfoodsandimpulsepurchasestosatisfyshoppers’moreimmediateneeds.

Thishyper-convenienceshiftisalsoalteringexpectationsformoreservice-orientedretailprocesses.Throughsocialmedia,consumershavebecomeaccustomedtoreceivingapromptreply.

Meanwhilearecurringthemeofrecentyearshasbeenretailers’logisticalstruggletokeeppacewithrapidgrowthinonlinedemandandfulfilment.Almostthreequartersofshoppersinoursurveysaythattheywouldbemorelikelytobuyitemsfromaretailerthatcouldguaranteedeliveryinaveryshorttime.

Moreretailersareexperimentingwithinnovativewaystomakedeliverybetter,cheaperandmoreconvenient.Click-and-collectservicesareexpandingrapidlyintolocalnewsagentsandevenundergroundstations,andself-servicelockersand‘clothingpods’(cubicleswherecustomerscancollectclothestheyorderedonline,trythemon,andimmediatelyreturntheitemsiftheyaren’thappy)arealsoemerging.

Howsoon

“Ittookretailersalittlewhiletograspthatinaworldofdigitalretail,whereyouaretransactingwithoutastore,thesupplychainisthecustomerexperience.”

Lucy Larkin,retailexpert,Accenture

docustomersexpectretailerstorespondtoacomplaint?

Iexpectsmallorindependentretailerstorespondasquicklytoacomplaintasalargernationalretailer

IfImakeacomplaintonsocialmediaorviaemail,Iexpectretailerstorespondwithinanhour

30% 35% 23% 10% 2%

10% 28% 36% 19% 8%

Stronglyagree Slightlyagree Neitheragreenordisagree

Slightlydisagree Stronglydisagree

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Genderdivide:theshoppinghabitsofmenandwomen

Oursurveyrevealsthefollowingdifferencesbetweenmenandwomenintheironlineshoppinghabitsandloyaltytoretailers.

• W omenaremorelikelythanmentohaveswitchedretailersoverthepastthreeyearsforhealthandbeauty,groceries,andhomeandgarden

• Men aremorelikelythanwomentosaythat‘bettervalue’wouldencouragethemtoswitchretailers–acrossallproductcategories.Bycontrast,womenaremorelikelythanmentomovetoretailersthatofferawidervarietyofproductsandproductsthatarebettersuitedtotheirtastesandneeds

• Mor ewomenthanmensaytheyarelikelyorverylikelytousethefollowingchannelsoverthenext12months:theonlinestoreofanationalretailer(66%womenvs54%men);themobile/tabletappofanationalretailer(39%womenvs33%men);andanonlinemarketplaceforindependentretailers(36%womenvs30%men)

• W omenarefarmorelikelythanmentosaythatasmartfittingroomwouldmakethemwanttovisitastore(66%womenvs52%men).

Personalisingtheexperience

Wecanexpectthetrendtowardspersonalisationtocontinue,driveninpartbyrisingconsumerdemandformorecustomisedservicesandproductchoice,butalsoincreasinglybythecollectionanduseofpersonaldata.

Beaconswiththeabilitytoreceivedataandtransmitpersonalisedmarketingtoindividuals’mobiledevicesaresteadilyincreasingtheirpresenceonmajorhighstreets,whilesocialmediaactivityandsearchhistoriesofferscopeforthemarketingofgoodsorbrandsbasedonalgorithmsaroundpersonalinformation.

Tosomeextent,thissortofintelligenceshiftsadegreeofempowermentbacktotheretailer,buttheintensifyingcollectionanduseofdatawillalsoheightenconcernsoverpersonalprivacy.

Oursurveypointstoconsiderableinterestinpersonalisation,butalsoraisesanoteofcaution:whilearoundhalfofshoppersthinkmorepersonalisedretailservicesandrecommendationscouldmakethembuymoreataspecificretailer,lessthan10%believeitwouldhaveasignificantimpactontheirlevelsofspending.

To a great extent

44%

24%

8%

8%

6%

To some extent

47%

47%

38%

42%

36%

Ability to check online whether a local store has a product in stock

Ability to deliver items in a very short time frame

Online service providing personalised advice from experts, based on your stated tastes and preferences

Automatically generated recommendations, based on purchase and search history online

Relevant content

Pleaseindicatetheextentto whichtheavailabilityoftheseserviceswouldmakeyoumorelikelytobuyitemsfromthatspecificretailer

“Socialmediahascompletelychangedthewaycustomersbehave.It’sremarkable,really,howalotofourpiecesaresoldbecausesomeoneonInstagramwaswearingit.”

Connie Di Gennaro, ChiefCommercialOfficer,Wolf&Badger

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The new wave of retail technologyAhybridchannelthatblurstheboundariesbetweenonlineandbricksandmortarisgaininggroundinUKretail.

Massivesmartphonepenetration,next-generationbroadbandandtheriseofshoppingappshaverevolutionisedpoint-of-saleretaildecisions.Oursurveysuggeststhatanewwaveoftechnology-ledchangeisonitsway.

Thedriveonline

Inrecentyears,wehaveseenonlinesalesrecordingrobustdouble-digitgrowth–faroutpacingtheriseinoverallretailsales.Oursurveyshowsthatonlinestoreswerethemostcommonlyusedretailchannelsoverthepastyear.

TheUKisalreadyamongtheworld’sleadingecommercecountries,withonlinesalesaccountingfor14.2%ofallretailtransactionsinJuly2016.7Comparablecountryestimatesofonlinesalesvary,buttheUKaccountedfor31%ofallEUonlinesalesin2015,wellaheadofGermany(19%)andFrance(13%).8Furthermore,theOfficeforNationalStatisticsestimatesthat77%ofUKadultsboughtgoodsorservicesonlineoverthepast12months.

Overthepastfewyears,onlineretailhasbecomethedominantdriverofretailsalesgrowth.9TheUKhasoneofthehighestsharesofonlinespendingintheworld,10andisbysomemarginthelargestecommercemarketinEurope.

30

25

20

15

10

5

0

2007 2008 2009 2010 2011

Online All retail

2012 2013 2014 2015 July 16

16

14

12

10

8

6

4

2

0

2007 2008 2009 2010 2011 2012 2013 2014 2015 July 16

Annualgrowthinretailsales(£mvalue)

UKonlinesalesasshareoftotalretailsales(%)

Source:OfficeforNationalStatistics,RetailsalesinGreatBritain:July2016.

Source:OfficeforNationalStatistics,RetailsalesinGreatBritain:July2016.

Thedriveonlineisclearlybackedupbythefindingsofoursurvey,whichshowthattheonlinestoresofinternet-onlyretailerssuchasAmazonandASOSarebyfarthepreferredshoppingchannel,attracting79%ofrespondentsinthepastyear.Thiscompareswith53%whohaveusedthewebsitesoftraditionalnationalretailers,andjust16%whohavemadeapurchaseattheonlinestoreofamanufacturerorown-brandretailer.

7https://www.ons.gov.uk/releases/retailsalesingreatbritainjul20168ht tp://www.emarketer.com/public_media/docs/eMarketer_eTailWest2016_Worldwide_ECommerce_Report.pdf

9http://www.retailresearch.org/onlineretailing.php10ht tp://www.remarkety.com/global-ecommerce-sales-trends-and-

statistics-2015

“Differentpaymentmethodsthatmakeiteasiertobeoneclickawayfromgettingsomethingareveryexcitingandwilldefinitelychangethewaypeopleshop.”

Connie Di Gennaro ChiefCommercialOfficer,Wolf&Badger

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16

14

12

10

8

6

4

2

0

2007 2008 2009 2010 2011 2012 2013 2014 2015 July 16

30

25

20

15

10

5

0

2007 2008 2009 2010 2011

Online All retail

2012 2013 2014 2015 July 16

Unstoppablemobile

Overthecomingyears,ecommercewillremainbyfarthedominantchannelofretailsales,driveninparticularbyrapidlyexpandinggrowthinmobiletransactions(m-commerce).AccordingtoeMarketer,UKm-commercesalesrosemorethantwiceasfastastotalecommercesalesin2015andwillcontinuetoeasilyoutpaceoverallgrowthinonlineretail.

Oursurveyalsoindicatesthatdemandisgrowing:whereasamodest17%ofshoppersusedamobile/tabletappofaninternet-onlyretaileroverthepastyear,48%statethattheyarelikelyorverylikelytousesuchachanneloverthenext12months.Ourresearchshowsthatconsumersaremorelikelytovisittheonlinestoreofaninternet-onlyretaileroverthenext12monthsthanthephysicalstoreofanationalretailer.

“Today,paymenttechnologycanexistalmostentirelyinthecloud.Thisenablesretailerstoopenstoresatamuchlowercost,andtobemuchmoreflexibleaboutlocation.”

Lucy Larkin,retailexpert,Accenture

TabletdevicescurrentlyaccountformorethanhalfofallUKm-commercesales,buttherisingpopularityoflarger-screensmartphonesandmorestableandsecuremobilepaymentsystemsaresteadilyshiftingthebalancetowardssmartphones.

OursurveyindicatesthatshoppersviewmobilepaymentoptionssuchasApplePay,AndroidPayandthenewBarclaysPingitappasusefulnewtechnology.Justascontactlesscardshavegraduallyenteredeverydayusage,sotoowillapp-basedpaymentsviasmartphones.

Online store of an internet-only retailer

Physical store of a national retailer

Physical store of a local/independent retailer

Online store of a national retailer

Mobile/tablet app of an internet-only retailer

Mobile/tablet app of a national retailer

Online store of a local/independent retailer

Physical store of a manufacturer/own-brand retailer

Online marketplace for independent retailers

Online store of a manufacturer/own-brand retailer

Mobile/tablet app of a local/independent retailer

Mobile/tablet app of a manufacturer/own-brand retailer

Subscription to an online service that provides regular, scheduled deliveries of household items

83

81

77

60

48

37

42

36

33

30

26

22

17

Likely%

8

11

13

19

13

19

27

27

27

27

23

21

17

Neither likelynor unlikely

%

8

6

8

19

36

42

28

34

36

40

48

53

63

Unlikely%

Howlikelydoyouthinkyou aretouseeachofthefollowingduringthenext12months?

Lingeringconcerns

M-commercewillbeadrivingforceofretailspendingintheyearsahead,althoughoursurveyalsohighlightedanumberoflimitingfactorsforonlinesalesactivity.

Chiefamongtheseisthatconsumersarestillkeentoseeandinspectcertainitemsinpersonbeforefinalisingapurchase.Thisappliesparticularlytomoreexpensiveitemsandproductsthataremorepersonalised(suchasjewelleryorfittedfurniture).Otherconcernsnotedbyourrespondentsincludethetransactionnotbeingsecure,andthepotentialthatthewebsitemaybefraudulent.

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Anewhybridchannel

Withconsumersabletoshopwherevertheyareandwhenevertheywant,thegrowthofm-commerceisincreasinglyblurringtheboundariesbetweenbricks-and-mortarstoresandonlineretail–creatingahybridchannelthatwillcontinuetoexpandandevolve.

“Thepast10yearshavebeenaboutpullingcustomerstoyourplatforms,whetherthat’smobileorweborstore.The next10or15yearsmightbeaboutexisting onotherplatformswhereyourcustomers exist.”

David Thomson,HeadofDigitalProduct,Marks&Spencer

Thishasintensifiedthepracticeof‘showrooming’,wherebyconsumersviewandtestproductsin-storebeforepurchasingonline,whichpresentsafurtherchallengetothehighstreetandisdrivingastrategicshiftamongagrowingnumberofretailerstowardsdevelopingtheirin-storeexperience.

Nowtechnologyshouldbeattheheartofthein-storeexperience.Atagenerallevel,thismayinvolvethedeploymentofWiFi(andpossiblymobile/tabletdevices)forconsumerstouseinstore,mobilepaymentfacilitiesandstore‘check-ins’thatallowretailerstotrackcustomersandofferpersonalisedrewards.

Before buying an expensive item, I would prefer to see it in person to ensure that it lives up to my expectations

Concern about the security of the transaction

Concern that the website is fraudulent

Concern that my personal data might not be stored securely after the transaction has taken place

Concern that the products will be damaged during delivery

Concern that the products might get stolen or lost during delivery

Concern that the vendor might share my data with third parties

63%

43%

33%

21%

19%

16%

14%

Ifthereisalimittotheamountofmoney thatyouwouldspendonlineonasinglepurchase,evenifyoucouldaffordit,whatarethemainreasonswhy?

Theriseofin-storetech

Retailers’ongoinginvestmentsininnovationinclude‘beaconengagement’(whichusesBluetoothtocommunicatedirectlywithpassingandin-storeconsumers’smartphones),smartfittingrooms(cubiclesequippedwithdigitaltechnologiessuchasinteractivemirrors),virtual-reality(VR)headsets,andaugmented-realityoverlaysofastore’sproductrange.

Oursurveyindicatesmixedenthusiasmforthesenewfeatures,manyofwhicharestillintheearlystagesofroll-out.

Perhapsunsurprisingly,thetechnologywithwhichcustomersaremostfamiliar–touchscreen–istheonethatismostlikelytomakethemwanttovisitastore.ThebroadappealofthesmartfittingroomandVRisalsoevident.Bycomparison,augmentedrealityandbeaconengagementreceivemorelukewarmresponses.

Formany,thepersonaltouchisstillviewedasimportant,withlessthanaquarterseeinganyappealincustomerservicerobots.

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13%

13%

12%

9%

8%

3%

To a great extent

44%

44%

53%

43%

37%

20%

To some extent

37%

38%

30%

42%

50%

70%

Not at all

Smart fitting room

Virtual-reality headsets

Use of touchscreen technology in-store

Augmented reality

News about store-specific special offers appearing onyour phone when you walk into, or walk past, that store

Robot customer service representative

Theriseof‘AIcommerce’?

Asbricks-and-mortarstoresadapttothedemandsoftheconnectedconsumer,soonlineretailersareseekingtogainacompetitiveedgevianewtechnologies.

TheInternetofThingsisyettocapturethewiderpublic’sattention,buthome-scanningandWiFi-enabledinstant-orderdevices–suchasAmazon’srecentlylaunchedDashgadgets–reflectthelatestinnovativeattemptbyinternet-onlyretailerstodiversifyandchallengethetraditionalsupermarket/departmentstorespace.

Couldthisheraldthenextwaveof‘artificialintelligence(AI)commerce’asorderingchannelsbecomeseeminglyintegratedintoappliancesandgadgetsthatrespondtothespokenword?

*Aggregateofthenumberofchannelsused,thefrequencyofchanneluseandthelikelihoodofcontinuedchanneluse.

Pleaseindicatetheextenttowhichtheavailabilityofthesetechnologieswouldmakeyouwanttovisitthestore

Extentto whichdifferentregionshaveembracedomni-channelshopping.

Doubtsoverdrones

Thegrowthofecommerceisalsodrivingaracetothedoorstep.Geotaggingofferspotentialforonlinemarketplacestoidentifysellersthatareclosetoabuyer,theoreticallycuttingdeliverytimes,whileGoogleisexploringthefeasibilityofdronedeliveries.12Doubtspersistoverdrones’viability,butinJuly2016AmazonagreedadealwiththeUKgovernmenttotrialitsowndronetechnology.13

Oursurveyfindingsalsosuggestthatthepublicwilltakesomeconvincing,withtwothirdsofshoppersraisingconcernsoverthesecurity,safetyandprivacyofdrones.Andwhileoneinfiveprofessaninterestinusingdroneservicesiftheyweremadeavailable,fewarewillingtopaymorefortheprivilege.

Scotland 54.28NorthEast 51.62NorthWest 54.85NorthernIreland 52.36Midlands 52.75

Wales 57.92EastofEngland 52.62London 62.14SouthWest 51.85SouthEast 55.03

Scotland

NorthEast

London

SouthEast

NorthWest

Midlands

EastofEngland

SouthWest

NorthernIreland

Wales

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12ht tp://www.telegraph.co.uk/business/2016/08/03/google-follows-amazon-into-the-sky-with-drone-delivery-tests/13ht tps://www.theguardian.com/technology/2016/jul/25/amazon-to-test-drone-delivery-uk-government

After Brexit: retail’s new playing fieldRetailspendinghasheldupwellsinceBrexit,despiteaslideinconsumerconfidence.

ThehistoricdecisionbytheUKtoleavetheEUhasgeneratedhugeuncertaintyoverthemedium-termoutlookfortheeconomy–notleastwithintheretailsector.KeyindustrydriverssuchastheUK’stradingarrangementswithothercountriesandaccesstotheEuropeanlabourmarketinthefutureremainunknown.Itisthisuncertaintythatismostlikelytobeardownoneconomicactivityandconsumerdemandoverthenextfewyears,althoughbroadermacroeconomicdevelopmentsarelikelytoalsoplayapart.

SincetheBrexitvote,mostindicatorsofUKconsumerandbusinesssentimenthaveweakened,althoughthedatahavebeenparticularlyvolatile,withsharpdeclinesinJulybeingfollowedbyafairlyrobustreboundinAugust.TheGfKbarometerofconsumerconfidence14recordeditslargestsingle-monthdeclinefor26yearsinJuly,butithassincerecoveredsomeground.Similarly,surveysofbusinessexpectationsfromtheConfederationofBritishIndustry15(CBI),theOrganisationforEconomicCo-operationandDevelopment(OECD),16alongwiththewell-establishedPurchasingManagers’Index(PMI)17series,alldeclinedtomulti-yearlowsimmediatelyfollowingtheBrexitvote,butmorerecentlyhavebouncedback.

Thisresilienceislikelytoreflecttheboostfromaweakersterling,stimulusmeasuresfromtheBankofEnglandandthefairlyrapidformationofthenewgovernment,whichhashelpedtoalleviatesomeofthemoreacutepolicyuncertainty.

AfterBrexit,which

14http://www.gfk.com/en-gb/insights/report/uk-confidence/15ht tp://www.cbi.org.uk/business-issues/the-economy/business-surveys/

distributive-trades-survey/16https://data.oecd.org/leadind/business-confidence-index-bci.ht17http://www.markit.com/product/pmi

ofthefollowingdoyouthinkwillbecomehardertobuy?

Clothes

33%

Meat and fish

28%Cheese

40%

Wine

55%Exotic fruits

62%

Personal electronics

34%

Luxury goods

42%

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PrivateGDP growth

May 2016 August 2016

2%

1%

2%

1%

2%

3%

5%

6%

3%

2% 2%

1%1%0%

Inflation Employmentgrowth

Unemploymentrate

Averageearnings growth

Household disposableincome growth

Post-votespendingholdsup

TheimmediateimpactoftheBrexitvoteacrosstheretailsectorhasbeenfarmorebenign.Salesvolumeswererobustinsummer,withretailsurveysshowingoptimismaboutcontinuednear-termgrowth.

Thisisentirelyrational.Sincethevote,nothingtangiblehaschangedforconsumersorretailers.Fornow,theUKremainsapartoftheEUandcurrenthouseholdfinancesareunaffected.Inaddition,economicconditionsremainbroadlysupportiveofspending,withsalesactivitysupportedbyemploymentandrealwagegains,expandingconsumercreditandheavyretaildiscounting.

Butcanthisoptimismbesustainedoverthemediumterm?Therearechallengesahead:

• Underlyingactivityintheeconomyhasgraduallyweakenedoverthepastyear.Withmorefiscalausterityplannedandexternaldemandsubdued,theUKwaslikelyontrackforaperiodofweakergrowthirrespectiveofthereferendumoutcome

• Afteralongperiodoflowinflation,pricepressuresaresettorisein2017,astheeffectsoftheoil-priceslumpfadeandaweakersterlingpushesupimportcosts.AsmostgoodssoldintheUKareimported,thiswillsqueezethealready-tightmarginsofmanyretailers–anddampenhouseholdpurchasingpower

• UKbusinesssurveysindicateamarkedpull-backincompanies’investmentandhiringplanssincetheBrexitvote.18Soonerorlater,thiswillweighonoveralldemand,notleastasalready-weakaverageearningsgrowthslowsfurther.

18ht tps://www.theguardian.com/business/2016/sep/21/businesses-scaling-back-investment-plans-brexit-vote-bank-of-england

Consumersremainoptimistic

Ontheupside,oursurveyindicatesthatconsumersbelieveBritishretailerswillsupporttheeconomyinwithstandingtheuncertaintyofBrexit.AslightmajorityexpectthequalityandavailabilityofmostgoodstoremainthesameorimprovefollowingtheUK’sexitfromtheEU.UKhouseholdswillalsoretaintheirstrongappetiteforonlineandhigh-streetspending.

Just22%ofconsumerssaytheyarelesslikelytospendmoneyonbig-ticketitemstodaythantheywerebeforeBrexit.

Theweakerpoundwillprovebeneficialtothetourismsector,boostinglevelsofvisitorspending.Additionally,BrexitcouldcreatearealopportunityforretailerstothinkabouthowtheycancapitaliseontheglobaldemandforBritish-madegoods.

OursurveyshowsthatBritishretailerscouldbeabeaconofhopeinuncertaintimes

55%ofrespondentsbelievethatBritishretailerswillhelpthecountrytowithstandtheeconomicuncertaintyofBrexit.

64%saytheyfeelproudofBritishretailersandtheservicetheyoffertosociety.

63%believethatwhennegotiatinghowtheUKleavestheEU,protectionforBritishretailersshouldbeapriority.

65%agreethatafterBrexitwehaveadutytosupportBritishretailersandBritishgoods.

ChangeinconsensusforecastsforUKeconomyin2017:theBrexiteffect

Source:HMTreasury,ForecastsfortheUKeconomy.

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Betteroff?

Perception

Twiceasmanyrespondentsbelievethatthequalityofgrocerieswillimproveasthinkitwillreduce(28%vs14%).

Morethantwiceasmanyrespondentsbelievethatfoodlabellingwillimproveasbelieveitwillgetworse(26%vs12%).

24%ofrespondentsbelievethattheavailabilityofgoodswillimprove,comparedwithjust12%whothinkitwillreduce.

Overaquarterofrespondents(28%)believethatthepricesofgoodsfromwithintheEUwillrise,whileonly15%believetheywillfall.

22%ofrespondentsbelievethatstorevacancieswillincrease,comparedwith17%whobelievetheywilldecrease.

Respondentsexpectthatexoticfruits,Europeanwines,luxurygoodsandcheesewillbecomehardertopurchase.

Reality

IftheUKleavestheEUandstrikesnewtradeagreements,itcouldleadtoabroaderrangeofgroceriesfromalargernumberofcountrysources.However,theUKwouldhavetoassumeresponsibilityforfoodstandardsthatcoulddifferfromtheharmonisedEUsystem.

ABrexitcouldalsomaketheUKmorevulnerabletopressurefromcountriessuchastheUStolowerfoodstandards(theEUhasfirmlyresistedsuchpressureoverrecentdecades).

A‘hardBrexit’fromtheEU(withtheUKtradingunderWTOrules)mayoffergreaterflexibilitytotheUKparliamenttomodifyorimprovecurrentUKlawsaroundfoodlabelling,manyofwhichhavebeencreatedasaresultofEUregulations.

However,foodimportsfromEUmarketswouldstillbesubjecttotheexistingEUregulatoryframework,implyingapotentialassortmentoflabellingandnutritionalinformationonsupermarketshelves.Furthermore,UKfoodexporterscouldfacehighercostsfromhavingtocomplywithdifferentfoodlabellingregimes.

ABrexitcouldpotentiallyleadtoaninfluxofproductsfromawiderrangeofcountries.YetwhilethismaybroadentheavailabilityofgoodsforUKconsumers,asurgeofcheaperforeignimportscouldhaveseriousimplicationsformanydomesticcompaniesandsectors(suchasUKfarming),whichthegovernmentwouldbeunlikelytoignore.

ItisverylikelythatpricesofgoodsfromtheEUwillrise,inresponsetotheweakertrendlevelofsterling.Thereisalsoastrongchanceofaperiodofhigherglobalcommoditycosts,aswellasthepossibilityoftheimpositionofimporttariffs.

Thenationaltowncentrevacancyrateroseto10.1%inJuly2016,upfrom9.6%inApril2016andthehighestratesinceApril2015.19Thereisareasonableprospectthatthevacancyratewillrisefurther,asweakersterlingraisesimportcostsforretailersandashigherinflationsqueezeshouseholddisposableincomesanddampensdemand.

Certaincategoriesofhigher-endgoodsandfoodanddrinkitemsfromtheEuropeancontinentmay,intime,becomelessreadilyavailable.Thiscouldbeduetohigherprices,potentialdisruptiontoretailers’supplychains,andregulatorydivergenceasnewtradingagreementsarenegotiated.Thesedevelopmentscouldspuragradualshifttowardsgreaterdemand(fromconsumersandretailers)formoreunusualgoodsandfoodanddrinkfromnon-EUmarkets.

19BritishRetailConsortium/SpringboardVacanciesMonitor,July2016.

ImpactofBrexit:consumerperceptionvsreality

Worseoff?

“Weshippedtooveronehundredandfiftycountriesaroundtheworldlastyear.Internationaltradeisstillaverysmallpartofourbusiness,butweknowthatthedemandisthere–sohowdoweencourageandsupportthat?”

Simon Belsham,CEO,Notonthehighstreet.com

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Case study: Mothercare Driving£19.6minunderlyingprofitsbydeliveringanoutstandingomnichannelexperience.

Becomingadigital-firstbusiness

Aspartofitsstrategytobecomea‘digital-first’retailer,Mothercarerecentlyredevelopeditswebsitewithamoremodernlook,improvedresponsivenessandmobileadaptability.Thewebsitenowprovidesshopperswithaseamlessomnichannelexperience.Byenablingcustomerstoshoponanydevice,whileathome,onthemove,orin-store,therefreshedsiteishelpingtofurtherboostMothercare’sUKonlinesales–whichincreasedby15%inthelastfinancialyear.

Bringinginnovationtothehighstreet

Theretailerisalsousingtechnologytoenhancetheexperienceofshoppinginitsphysicalstores.“Inourrefittedstores,everycustomeradvisorhasaniPad,andoneintwocustomeradvisersinourotherstores,”saysChiefFinancialOfficerRichardSmothers.“Theyusethemtohelpcustomersfindtheproductstheyneed,checkstockandcompleteorders.”The‘Web-EnabledStores’initiativehasbeenaphenomenalsuccess,with40%ofMothercare’sonlinesalesbeinggeneratedviathischannel.

Anothernewintroductionise-receipts,whichhasgivenMothercarevaluabledatathatcanbeusedtofosteramorepersonalrelationshipwithitscustomers.“Wenowhave2.4millioncustomersinourdatabase,”saysSmothers.“Thisprovidesarichsourceofinformationtohelpusservethemmoreeffectively.”

Creatinganemotionalconnectionwithcustomers

Mothercare’snewapp,whichhasbeendownloadedover975,000times,isoneexampleofhowthefirmisusingdigitaltoservecustomersmoreeffectively.Theappprovideshelpfulvideos,awhitenoisedevice,acontractionstimerandanaugmentedrealityfeaturethatenablescustomerstoscanproductsinacataloguetogetmoreinformation.

Enhancingthein-storeexperience

Whilethefirm’sonlinesalescontinuetoincrease,Mothercarerecognisesthatcustomersstillwanttovisittheirstores.“Storesprovideanimportantenvironmenttointeractwith,serveandadvisecustomers,”explainsSmothers.“Wehaverecentlyintroducedcoffeeshopsandplayareasinourlargershops,whichareincreasingcustomerdwelltimes.Feedbackhasbeenverypositive.”

It’sclearthatMothercareisreapingthebenefitsofitsinvestmentinomnichannel.InMarch2016,thefirmannouncedanunderlyingpre-taxprofitof£19.6m.

AccordingtoSmothers:“Omnichannelremainsastrategicobjectiveofthebusinessandourapproachwillcontinuetoevolveovertimeasweidentifyhowwecanbestserveourcustomers.”

AboutMothercare

MothercareisoneoftheUK’sbest-knownretailers.Establishedin1961,thechainnowhasover1,300storesworldwide,specialisinginproductsforexpectantmothersandingeneralmerchandiseforchildrenuptoeightyearsold.

RichardSmothersChiefFinancialOfficerMothercare

“Wenowhave2.4millioncustomersinourdatabase.Thisprovidesarichsourceofinformationtohelpusservethemmoreeffectively.”

Richard Smothers,ChiefFinancialOfficer,Mothercare

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Case study: Notonthehighstreet.comConnectingcustomerswith5,000independentretailers.

Notonthehighstreet.com(NOTHS)istheUK’sleadingcuratedonlinemarketplace,connectingthebestsmallcreativebusinesseswithconsumersworldwide.Thesiteoffersmorethan200,000products,manyofwhicharemadetoorderbyoneofits5,000partnerbusinessesacrosstheUK.

Quickresponse

AttheheartofNOTHS’ssuccessisitsabilitytousedigitaltechnologyandbigdatatorespondquicklytonewtrendsinthemarket.“Whetherit’sTheGreatBritishBakeOfforPrincessCharlotte’sbirth,we’reabletoproviderelevantproductswithinhoursofaneventhappening,”explainsCEOSimonBelsham.“Becauseofthewayweworkandthebusinessmodelwehave,wecanleadwithamuchmorerelevant,morecustomised,moreempatheticoffer.”

Connectedtechnologies

AccordingtoBelsham,connectedtechnologiesarecriticalforthebusinesstoworkshouldertoshoulderwithitspartnersandprovideapipelineofnewproductstocustomersworldwide.“Almost50%ofoursaleseveryyearcomefromproductsthatarelessthan12monthsold,”heexplains.“Helpingoursuppliersinnovatemeansthatcustomerscanalwaysfindsomethingnew,somethingdifferent,andsomethingon-trendwithus–butthatonlycomeswhenwecanprovidethetools,thesoftware,thedataforourpartnerstobeabletodothat.”

Developingtalent

ManyofNOTHS’spartnersaresmallartisanproducersbasedacrosstheUK,sellingitemsfromluxurycuisinetoart,plusawiderangeofbespokeandpersonaliseditems.Themarketplacehasastrongfocusonfindingnewtalentandscalingthebusinessesitworkswith–17ofwhichhaveachievedsalesofover£1m.“Thegrowthofonlinemeansyoucanshopforalmostanything,anytime”explainsBelsham,“Whatmakesusdifferentisthatwesellthousandsofproductsthatcustomerswon’tfindwidelyavailableelsewhere.Furthermore,byshoppingwithuscustomersaresupportingindependentbusinessesandsmallcommunitiesacrosstheUK,somethingweknowmatterstothemalot.”

Integratingonlinewithoffline

Byrespondingtorisingconsumerdemandforunique,quirkyandethicallyconsciousitems,NOTHSachievedanannualturnoverof£158mfor2016.RecognisingthatcustomersfeelastrongaffinitywiththeNOTHSbrand,thebusinessrecentlycelebratedits10-yearanniversarybylaunchingathree-daypop-upshopinOldSpitalfieldsMarket.

“Idon’tthinkthefuturewillbeaboutonlineoroffline.It’sgoingtobeacombinationofthetwo,”saysBelsham.“Throughourpop-upshopwefoundthatcustomerslovedmeetingourpartnersandtakingpartinsomeofourevents.Wedon’thaveimmediateplansforopeningachainofshops,butwewillcontinuetolookathowwecanaugmentwhatwedoinphysicalexperiences.”

SimonBelshamCEONotonthehighstreet.com

“Whatmakesusdifferentisthatwesellthousandsofproductsthatcustomerswon’tfindwidelyavailableelsewhere.”

Simon Belsham,CEO,Notonthehighstreet.com

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ConclusionAcompassforthefuture:winningtheheartsandmindsofconsumers

OurresearchhighlightsaclearopportunityforUKretailerstodrivecompetitiveadvantageintoday’sfast-changingmarketandcapitaliseonconsumerdemandforamorediverse,vibranthighstreet–eveninthefaceofexternalchallengessuchasBrexit.

Thisholdsequallytrueforonline-onlyretailers,manyofwhichcouldbenefitfrombringingtheirbrandtolifeforcustomersthroughacompellingstoreformat.

Webelievetherearefourkeyareasonwhichretailersshouldfocus.

Makedifferentiationyourmantra

OurresearchshowsthatconsumersfeelproudofBritishretailersandbelievetheywillhelptheUKtoweathertheeconomicuncertaintycausedbyBrexit.YetshoppersareclearlydissatisfiedwiththewaytheUKhighstreetisevolving,andparticularlywiththelackofdifferentiationbetweenstores.

Forretailers,thispresentsanexcitingchancetodelightcustomersbyprovidingacompellingin-storeexperiencethatsetsthemapartfromtherest.Waystoachievethiscouldincludeusingtechnologytoenableshopperstofindoutmoreaboutproductsin-store,seewhatproductslooklikeintheirhome/ontheirperson,ordergoodsforhomedelivery,andevencustomisemerchandisebeforetheybuy.

Someretailersarecollaboratingwithotherbrandstodriveinnovation.Tesco’srecentpartnershipwithHolland&Barrett,forexample,willintroduceahealthandwellbeing‘storeinstore’formatinanumberofTescostoresacrosstheUK.20

Takea‘failfast’approachtoexperimentingwithnewtechnologiesinstore

Continuallyexploringthepossibilitiesofferedbydigitalisvitaltofuture-proofingthecustomerexperience.Yetourresearchshowsthatwhilesomefeatures–suchassmartfittingroomsandtouchscreentechnology–holdappeal,others–suchasrobotcustomerservicerepresentatives–maynotpersuadecustomerstovisitstoresmoreoften.Beforeinvesting,retailersshouldexperimentwithandpilotnewtechnologiestounderstandwhethertheytrulyenrichthecustomerexperienceorwhetherthey’reafad.Andtakinga‘failfast’approachherewillhelptoavoidtheunnecessaryexpenseofunsuccessfulroll-outs.

ShoeretailerClarks,forexample,regularlypilotsnewtechnologies.Someideas,suchasdigitalsignageandvirtualinteractivesurfaces,weren’tsuccessfulenoughtomeritwidespreadimplementation;yetothers–suchasusinganiPadtomeasurechildren’sfeet–haveprovedhighlypopularandarenowavailableacrossClarks’stores.21

20ht tps://www.tescoplc.com/news/news-releases/2016/tesco-joins-forces-with-holland-barrett-in-pilot-health-wellbeing-partnership/21ht tp://www.computerweekly.com/news/2240230441/Retailers-need-to-adopt-fail-fast-attitude-to-technology

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Prepareforthenexteraofomnichannel

Asadoptionofsmartphonescontinuestogrow,retailersmustensurethattheirstoresallowcustomerstousetheirmobiledevicestoenhancetheirshoppingexperience–forexample,tofindproducts,makepayments,lookforspecialoffersandbenefitfromexpertadviceandguidance.

However,somehigh-streetstoresarenowblurringtheboundariesbetweendigitalandphysicalchannelsentirelybyarmingcustomerservicerepresentativeswithiPadsandenablingcustomersathometogetaSkypetourofmerchandise.

Meanwhileanumberofonlineretailersareintroducingahigh-streetpresencethatenablescustomerstointeractwiththeirbrandandexplorepopularproductsinperson.AmazonBooks(Amazon’sbookstoreinSeattleUniversityVillage),forexample,givescustomerstheopportunitytodiscoverthe5,000mostpopulartitlesbasedononlinereviews.22

Put convenienceandpersonalisationattheheartoftheoffer

Asthe‘Uber-isation’ofretailcontinues,consumerswillnaturallygravitatetowardsbrandsthatcanprovidethemwiththeexactproductorservicetheywant,assoonastheywantit–whetherthisisin-storeoronline.CompaniessuchasNotonthehighstreet.comoperatea‘platform’businessmodelthatgivesthemtheagilityrequiredtorespondtoshoppers’demandsforpersonalisationandconvenience.

Othersarelookingfurtheraheadandexploringhowcustomerscanorderviaamessagingappsothatpurchasingbecomesaseamlesspartoftheireverydayexperience.

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22ht tp://www.forbes.com/sites/greatspeculations/2016/02/11/why-would-amazon-open-physical-stores/#618d30ce3a1a

About the authorIanGilmartinHeadofIndustry,RetailandWholesaleCorporateBanking

IanGilmartinisHeadofIndustryforRetailandWholesaleatBarclaysCorporateBankingacrosstheUKandIreland,whereBarclayshasoperatedasectorspecialismforalmost30years.HeandhisteamofRelationshipDirectorsareresponsibleforthousandsofclients,rangingfromboutiquefashionhousesandhigh-streetbooksellerstodepartmentstoresandlistedcompanies.

Ianhasover20yearsofcorporatebankingexperienceandhasspentthelastfiveyearsprovidingspecialistbankingservicestoretailersandwholesalersaspartoftheleadershipwithintheRetailandWholesaleteam.Priortothat,hewasaSeniorRelationshipDirectorintheTechnology,MediaandTelecomsteam,andhasexperienceofothersectorverticalsfromhisearlycareer.

Sincetakingonhiscurrentrole,Ianhasbecomearegularcommentatorinthenational,regionalandtrademediaonretailtrendsandindustryissues,aswellasretailsalesfigures.

T:02071166868ian.gilmartin@barclays.com

TofindoutmoreabouthowBarclayscansupportyourbusiness,pleasecall08000154242*orvisitbarclayscorporate.com

*Callsto0800numbersarefreefromUKlandlinesandpersonalmobiles,otherwisecallchargesmayapply.Tomaintainaqualityservicewemaymonitororrecordphonecalls.

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About this researchThefindingsinthisreportarebasedonasurveyofmorethan2,000consumersacrosstheUK,conductedbyLongitudeResearchonbehalfofBarclaysinAugust2016.

Noteregardingdata:wherepercentagesdonotaddupto100%thisisduetoomittingthoserespondentswhooptedforthe‘don’tknow’answerinthepoll.

Barclayswouldliketothankthefollowingindividualsfortheirtimeandinsightsincontributingtothisreport(listedalphabetically,bysurname):

• Simon Belsham,CEO,Notonthehighstreet.com

• Connie Di Gennaro,ChiefCommercialOfficer,Wolf&Badger

• Sophie Hackford,Director,WiredConsulting&Education

• Lucy Larkin,retailexpert,Accenture

• Richard Smothers,ChiefFinancialOfficer,Mothercare

• David Thomson,HeadofDigitalProduct,Marks&Spencer.

barclayscorporate.com

Nopartofthispublicationmaybereproducedorstoredinaretrievalsystem,inanyformorbyanymeans,electrical,mechanical,photocopyingorotherwise,withoutthepriorconsentofthepublishers.TheviewsandforecastspresentedinthisreportrepresentindependentfindingsandconclusionsdrawnfromastudybyAnalytiqa.Analytiqacanacceptnoresponsibilityforanyinvestmentdecisionmadeonthebasisofthisinformationorforanyomissionsorinaccuraciesthatmaybecontainedinthisreport.Thisreporthasbeenproducedingoodfaithandindependentlyofanyoperatororsuppliertotheindustry.Wetrustthatitwillbeofsignificantvaluetoallreaders.

Theviewsexpressedinthisreportaretheviewsofthirdparties,anddonotnecessarilyreflecttheviewsofBarclaysBankPLCnorshouldtheybetakenasstatementsofpolicyorintentofBarclaysBankPLC.BarclaysBankPLCtakesnoresponsibilityfortheveracityofinformationcontainedinthird-partynarrativeandnowarrantiesorundertakingsofanykind,whetherexpressedorimplied,regardingtheaccuracyorcompletenessoftheinformationgiven.BarclaysBankPLCtakesnoliabilityfortheimpactofanydecisionsmadebasedoninformationcontainedandviewsexpressedinanythird-partyguidesorarticles.

BarclaysisatradingnameofBarclaysBankPLCanditssubsidiaries.BarclaysBankPLCisauthorisedbythePrudentialRegulationAuthorityandregulatedbytheFinancialConductAuthorityandthePrudentialRegulationAuthority(FinancialServicesRegisterNo.122702).RegisteredinEngland.Registerednumberis1026167withregisteredofficeat1ChurchillPlace,LondonE145HP.

October2016.BD04228.

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