The UK High Street will be forever changed as Covid-19 accelerates many considerations – both challenges and opportunities – for retail businesses, as it ushers in a new era for retail, including the creation of exciting opportunities reinvigorating local and independent retail businesses, said former Trade Minister and ex-MD of Waitrose, Lord Mark Price.
Delivering the RetailEXPO Virtual Conference keynote session, Price outlined the challenges ahead for retailers saying a quarter of UK shoppers are unlikely to return to the high street due to financial constraints and fear of contracting coronavirus.
With businesses likely to face higher costs in the future – potentially through taxation schemes – to cover the Government’s much-needed record Covid-19 relief effort spending, which will lead to further UK borrowing, and retailers potentially unable to increase margins beyond the typical 3-5% due to growing market share of discount retailers at a time when UK consumers’ finances are squeezed, Price urged firms to spare no expense on innovation, technology and owning unique Intellectual Property (IP).
“I would spare no expense at the moment on innovation and IP, owning this will become more and more important. The internet has commoditised goods. If you sell the same goods as the retailer next door, it is simply a battle to the lowest costs,” said Price.
With the shift to online shopping accelerated under lockdown, legacy retailers and multiples will need to rethink investment in physical retail with Price calling on Government and Landlords to rethink business rates and rents. He also called on legacy retailers to rethink the experience and services their bricks-and-mortar spaces can offer to motivate a reason for customers, many of whom will be nervous coming out of lockdown, to go in-store. Travel restrictions and a possible protectionist strategy for international trade from governments may have a lasting and positive impact on local and independent businesses. He also suggested that community retail will have become hard-baked in shoppers’ psyche, as they begin to value local businesses more having been lockdown.
“I am very optimistic about the future of the High Street as I think it will be reengineered and re-engineered around local businesses. Retailers, even if they aren’t independents, should consider how to make their business feel even more local, supported by a national and international online capability,” he said.
Price also questioned whether the crisis would see the UK Government becoming a more protectionist state, warning a pressured and untested post-covid global supply chain would see the cost of goods increasing for consumers.
Businesses wanting to survive and thrive need to nurture their existing customers with Price describing the post-covid consumer as ‘nervous’ but also ‘joyous’ and in need of transparency and reassurance from retailers.
Ending his presentation, Price said he is excited about the future of retail with Covid-19 presenting an opportunity for a new beginning.
“Retailers need to find a new way through, embrace the change and create a new era of retail, much like the era of old retail, which will be imagined and born in the UK and spread around the world.”
Watch the whole of Mark’s presentation on-demand here.