With Black Friday and Cyber Monday on the horizon, this will be the first true test for retailers, many of whom generate up to 30% of their annual sales during the holiday season.
Last year, Marks & Spencer, John Lewis and Tesco [1], three of the UK's biggest retailers delivered disappointing Christmas figures. This resulted in M&S and Tesco ending the day by significantly falling in the FTSE 100 index with more than £1 billion collectively wiped off the value of their shares. And 2018 hasn't been much brighter - recent headlines have been filled with store closure after store closure, as the likes of House of Fraser, Mothercare and Toys"R"Us fall victim to death of the high street.
In fact, just this month, Debenhams was declared as the latest high street retailer to crumble, resulting in the closure of up to 50 stores and putting 4000 jobs at risk. [2]This certainly isn't the first and won't be the last retailer to report a sharp fall in profits this year.
A combination of increasing rents and business rates, along with the fall of the pound and its knock-on effect on UK shopper spending habits, has resulted in an extremely worrying and turbulent time for the UK retail sector. The demise of several of Britain's largest high street retailers, this year alone, has proven that even the most established and long-standing institutions are at risk. The question on everyone's minds is - who will be the next victim in the decline of the high street?
Retailers risk falling behind the tech trend
The retail industry is notorious for being extremely fast paced, and several technological advances over the last decade has put increasing pressure on brick-and-mortar retailers to keep up. In recent years, and in 2018 especially, innovations such as the Internet of Things (IoT) and Artificial Intelligence (AI) have completely transformed the way brands are engaging with their customers. Technologies including in-store tablets, online chatbots and automated processes allow retailers to enhance and personalise the shopping experience by providing added value and convenience to customers.
New technologies such as these have raised the bar when it comes to the level of customer experience retailers are able to provide, but also, the level of experience customers now expect as a result. According to our own research, 67% of shoppers are more likely to shop at a store that integrates technology, and over two-thirds believe retailers that utilise more technology enable a faster shopping experience.
If this wasn't enough to contend with, consumer purchasing behaviour is changing. Shoppers want high quality products at the best possible price, as soon as they can get it, and are taking their shopping online to achieve this. Online shopping means consumers can beat the peak season queues and purchase items instantly and conveniently. In fact, according to a survey by PwC [3], 31% of people will be completing their Cyber Week shopping using just their mobile phone, and that 65% of individuals over 65 (a market often neglected by brands online) will be doing their Black Friday shopping digitally. Recent figures predict that UK shoppers are set to spend a record £1.54 billion online during Black Friday, up 13% based on last year's pre-Christmas discounting day.
Gearing for success
While disruptive technologies such as augmented reality and drone delivery have been pegged as the future in the retail industry, experts agree that the technology that is changing retail is not the overhyped stuff of tomorrow, but the more mundane things that are happening today. To succeed this peak season, rather than competing against the online world of e-commerce, retailers should be adopting the right strategies to complement and accommodate changing shopping habits.
For the brick-and-mortar retailer, technology such as digital signage, kiosks and tablet scanners help shoppers find what they are looking for, while Mobile Point of Sale (mPOS) and self-checkout terminals make payment quick and easy. Retailers must consider applying a mobile-first strategy
across their entire on and offline operations to streamline the value chain, from supply to distribution to shop floor. Barcodes and RFID are key enabling technologies for warehouse management systems. Knowing exactly where items are located and in what amount is essential when preparing for peak season trading and allows companies to shrink their inventory and increase product velocity through the supply chain.
Retailers should be offering personalised services, and mobilising retail staff through technology to streamline intelligent customer interactions. If store retailers want to remain competitive in today's volatile climate, they need to be agile and adopt an integrated system that makes online to in-store transactions seamless.
Minimising downtime - maximising profits
However, with new technology comes new challenges. As retailers deploy more in-store technology, they are intensifying many of their existing mobility management challenges and introducing many new ones. If a fault should occur during peak season, companies need to find and fix touchpoint and app problems as quickly as possible to reduce downtime. Failure to react quickly can impact negatively on customer satisfaction and sales. This would be a catastrophic disaster for retailers normally, let alone over retail's busiest period.
To combat this companies must implement a robust and secure integrated solution to ensure seamless integration across both online and offline channels and create an omnichannel shopping experience for their customers. Whether the consumer chooses to purchase in-store, online from a desktop or mobile device, or a combination of both, the customer experience must be seamless and consistent. Retailers who do not support these advancing methods of shopping that include technology effectively could risk being the high street's next casualty.
By Leigh Moody, UK Managing Director at SOTI [4]