The retail landscape is constantly evolving and re-inventing itself. Fast forward a couple years and, whilst things might not necessarily look very different, how people behave will have changed dramatically. Economic turmoil to one side, it is multi-channel shopping and the rise of digital that are driving change in the sector.
Over the years, we’ve seen a huge shift in the way people consume. Today’s consumers are adopting increasingly complex shopping behaviours to get what they want. They are more demanding, less patient and certainly less loyal! The roles of online and offline have somewhat reversed with people now doing their research in-store, then searching online for the best deal and perhaps making a purchase while on the move via their mobile device. This simply puts the retailers to test and it’s no surprise that they are desperately trying to determine how their consumers will shop.
With the boundaries between virtual and physical space becoming increasingly blurred, retailers must reinvent themselves in order to stay relevant to the connected consumer. It is now crucial for retailers to have a strong, user-friendly ecommerce platform closely integrated with the offline sales and retailing strategy. They also need to create in-store experiences that engage shoppers with the brand beyond the just the transaction and incentivise visits to stores, as well as a mobile capability that not only engages with shoppers, but also sells to them. These are the ingredients for success.
When it comes to embracing new technologies, UK consumers have proved themselves to be world leaders in terms of retail channels. The UK already has the highest proportion of online sales in the world – 13.2% in 2012 (Source: Centre for Retail Research). Mobile has become a key touch point in buying cycle – 43% in UK said they used mobile for price comparison and product reviews (up from 19% in 2011; source: Econsultancy). And as smartphones and tablets proliferate, we expect to be able to browse and buy wherever we are. Verdict Research estimate that 80% of the population will use mobile for at least some part of the purchase process by 2016.
So as the year goes on, we will be seeing more retailers ramping up the in-store experience while improving the online shopping experience. Tesco and Asda have already announced plans for multimedia displays and the potential for technology to enhance in-store is strong. Burberry is famously bringing elements of its online experience into its Regent Street flagship store. John Lewis are adapting to this change with in-store access to their web service.
And, as our Future of Britain study shows, another opportunity for brands lies in the potential to play a more active and relevant role in local communities. Our study asked consumers to state how strongly they agreed with 12 statements concerning retailing in Britain and we found strong evidence to suggest that major brands should seek to tailor their business operations and brands to cater closely for local communities.
2012 saw some high profile casualties and we think that 2013 will be no different. Retailers will come and go and new ones will appear. In this climate, retail brands can’t simply continue with old ways of doing business. Instead, what they need is a new operating model that addresses the needs of today’s consumer, but one that is flexible enough to continue to evolve with rapidly changing consumer expectations. Only those that adapt quickly to the changing market will succeed.
