With non-essential retail not expected to open until June and retailers prioritising immediate ecommerce initiatives to drive sales, the ability to keep up with retail disruptors is the greatest long-term challenge faced by retail businesses post-covid-19, according to new research from RetailEXPO.
As retailer businesses deal with the ongoing fallout from the coronavirus pandemic, original research of 2,227 retail professionals conducted by RetailEXPO revealed that almost a quarter (24%) saw keeping pace with disruptors as the top long-term challenge facing their business. This was followed by meeting changing customer expectations (13%) and creating unique in-store experiences (12%). Also featured in the list of top key long-term challenges were keeping up with tech innovations (8%) and using data from customer insight to drive retail performance (7%).
With covid-19 anticipated to wipe £12.6billion from UK retail sales in 2020 according to GlobalData, combined with supressed consumer confidence amidst a backdrop of a global recession, retailers will have to compete even harder for each conversion – and businesses are acknowledging the need to innovate and disrupt in order to survive. This, combined with an understanding of changing customer expectations, has moved the importance of innovation up the c-suite agenda, RetailEXPO suggests – whether it’s strategies that enable retailers to ‘do what Amazon can’t’ or developing unique IP through digital acceleration.
Ex-Waitrose MD, Lord Mark Price, commented at RetailEXPO’s Virtual Conference that despite the downward pressure on prices and an even tighter squeeze on retail margins, now is not the time to pull back on investment in technology and innovation: “Downward pressure on margins mustn’t come at the expense of innovation as retail reboots,” he said. “What IP you own and control and how you innovate will all be key in having a differentiated strategy against what the discounters are doing or, frankly, what Amazon is doing.”
With the government announcing the reopening of retail store in June, the importance of the store in continuing to deliver value through ‘unique experiences’ when shops re-open was also highlighted in the research, which is perhaps unsurprising when almost two thirds (64%) of UK shoppers polled in RetailEXPO’s latest report said a negative in-store experience would stop them buying from a retailer or brand again.
Almost half of shoppers (48%) said that experiential activations, such as classes or tutorials, and community initiatives would enhance in-store experience. Yet, despite over a quarter (28%) of consumers wanting to see in-store experiences that supported greener retailing, moving towards a more sustainable retail model presented a challenge to just 4% of the 2,227 retailers surveyed.
Matt Bradley, Event Director at RetailEXPO, commented: “In a time when retail is having to reinvent itself on an almost daily basis, the cost of customer acquisition continues to rise and each conversion has never been so hard-fought. This means retail businesses face a stark decision – either disrupt or prepare to be disrupted. To do this, innovation – underpinned by the clever and inventive use of technology – needs to sit at the very heart of retailers’ strategies to allow them to navigate retail’s ‘new normal’. Operating nimbly and innovating at pace will be key to unlocking new and exciting retail formats after lockdown that deliver enhanced customer experience and drive performance.”