Attributed to Jackson Versitano, Retail Regional Director – UK & EMEA at Lightspeed.
In April, the CBI (Confederation of British Industry) reported a sharp decline in UK retail sales, partly due to Easter coming early, but there are other elements at play to the storyline that the retail sector in the UK is still experiencing difficulties.
As sales face a downward trend, retailers must adapt and innovate in order to get ahead of the competition, stay front of mind and thrive in this ever-evolving landscape. Political and economical conditions across the globe, the cost of living crisis, and increasing pressures to compete with loyalty schemes and online giants with deep pockets, are just some of the obstacles that retailers face today, especially for small and medium businesses.
Both business owners and customers are feeling the financial burden when it comes to budgeting. Businesses are struggling with rising rates and the added burden of increased wholesale prices. Meanwhile, many customers are feeling the squeeze of higher food and energy costs, which may be contributing to a surge in shoplifting rates, which have reached their highest level in 20 years in England and Wales. Tied into this economically driven lifestyle factor is shoppers’ perception of value. According to Mintel’s 2024 Global Consumer Trends report 67% of UK consumers who have bought furniture in the last 12 months have spent a little more to get the level of quality that will last a longer time than cheaper goods.
Another space to keep an eye on is how green credentials of a brand are communicated and executed – is the walk matching the talk? Customers expect businesses to be more environmentally friendly, and it guides their buying choices significantly – so much so that, according to a report by TheRoundup 84% of customers say that poor environmental practices will alienate them from a brand or company.
According to Mintel’s 2024 Global Consumer Trends report, 47% of UK consumers who are concerned about the increased prominence of AI are specifically concerned about having to interact with AI more than humans for things like customer service. With this in mind it is key that while you may have AI at your fingertips to help run the back office, when it comes to customer interactions, it is still important to keep the option of speaking to a real person. Embrace technology, including AI, by all means, but remember that with all the new technology available, there remains a gap between early adopters and slightly more tech-resistant consumers.
Navigating the challenges in today’s retail environment can be tough, but with the right approach, you can find your way through. Here are five tips to help you succeed:
1. Boost Online Presence: With bricks-and-mortar sales declining, a robust online presence is essential. Provide a seamless buying experience, ensure your back of house is watertight, and get creative with digital marketing efforts. Aim to build your email list through online coupons that open the pathway to communicating with your customers.
2. Showcase Environmental Responsibility: Consumers are increasingly mindful of sustainability. For example, ordering inventory you don’t need doesn’t just create extra waste, it can impact your profits as well. By knowing exactly how much you have on hand, you can be environmentally and economically conscious at the same time.
Doing regular cycle counts, where you only count a portion of your inventory, will help you keep on top of your inventory with accurate data without needing to do a full count of your store every single time.
3. Forge Partnerships: Collaborate with brands aligned to your mission to expand your customer base through events or online promotions. See your customers as partners and make sure you get to know them by conducting market research and tailor your products and services accordingly to foster loyalty.
4. Leverage the Refund Effect: Utilise cross-selling opportunities during the return process to retain revenues by simplifying returns with user-friendly interfaces and drive footfall in-store for increased exchanges.
5. Respond to Reviews: Address negative reviews promptly and professionally to build rapport with customers. Consumers value transparency and responsiveness when it comes to feedback.
By leveraging these strategic approaches, retailers can not only weather the storm but emerge stronger than before. Embracing change, staying agile, and consistently reassessing market dynamics will be key to sustained success in the ever-evolving retail landscape.
