2018 was another demanding year for retail. Depending on which press you read, you could either fear we are in “Retail Armageddon” or, you could take the view that the retail landscape is evolving to reflect the changes in consumer buying behaviour.
Set this against the backdrop of the political hokey-cokey, which is Brexit and you can see many challenging factors, which are contributing to the loss of major high street brands and independents alike. In the first half of 2018 alone, we saw a net decline of 1554 independent retailers in the half-year, compared to a net increase of 762 shops in the same period last year.
In an almost palpable sense of desperation, consumers were bombarded with the relentless messages of “pre-Black Friday Discounts!”, “Black Friday discounts!” and “Post Big Friday Discounts!”, which ultimately led to a weak Black Friday and customer apathy. This expectation of a bargain has led to retailers slashing prices by 48% over Christmas according to Deloitte.
So, what can we expect from 2019? Unfortunately, the first quarter will remain challenging, as consumer confidence is likely to be affected by the on-going political turmoil and when consumers feel uncertain, they close their wallets and purses. However, many of us retailers have sailed in stormy waters before and as the old proverb goes “Necessity is the mother of invention”.
The rise of e-commerce will continue and specifically the rise of the marketplace, with the likes of Amazon and eBay dominating that area. Already over 50% of online purchases start with an Amazon search, with one in seven purchases resulting from a voice search with Alexa. A threat or an opportunity if you are an online retailer, as you will want to be the top recommendation Alexa provides. Years ago, the holy grail of online retailing was being number one on Google but there were plenty of runner-up prizes if you appeared on page one. Now, these keywords will be heavily fought for, especially as once purchased, the customer can tell Alexa to “repurchase”.
Tuning our attention to our town centres, retailers and business owners will start to feel the benefit of the budget promise to pump £1.5 billion into our high streets. The new package is particularly aimed at helping small town retailers and high street businesses, with the Chancellor announcing business rates relief for firms with a rateable value of less than £50k will be cut by a third. This is viewed by some however as a red herring given that some retailers rates doubled in 2017, so cutting by a third will not take them back to their 2016 rates.
When we speak to people in the county, they seem to be viewing 2019 as a year to “take stock”. The businesses that will grow, as always, will be the ones owned and run by people who understand their business and put the customer at the heart of it. Creating and rewarding loyalty, through excellent customer service and offline, providing an experience, is key to survival and growth.
Finding new ways to communicate with your customers on social media and looking at new sales channels, whether that is on your own site or on a marketplace, might be something you have put off or feel daunted by but now might be the time to explore this further. Depending on what you sell and who your customer base is, between 75%-80% of people up to their 30s, will make a purchase based on a social media recommendation.
Whilst the greater national news may make us feel isolated, the need to come together as a community, has never been so important. Being vocal in your local Chamber of Commerce or joining local retailer groups on social media, will amplify any concerns you may have on a local level, whether that is parking charges, the impact of road improvements or shop closures. So, whether in 2019, we end up in or out, it will be up to us to shake it all about through innovation and collaboration.