2018 brought about many challenges and pressures - but also lots of growthand opportunitiesfor positive change. This article covers some of the key learning points that retail-operations can take from 2018 to prosper in 2019.
A brief look at 2018
In the first half of 2018 there were 4,400 net closures across the UK high street, an increase of 103 from 2017. Meanwhile, the online trend has(and will) continue to flourish, accounting for 20% of retail sales. In the first half of 2018, online grew at ten times the rate of store sales.
And of course, Brexit drew closer. Brexit was unsurprisingly a heated topic in 2018, with questions around hiring, the pound, and imports/exports concerning the industry. We’re starting 2019 without much clarity in this area - and in the meantime, retail businesses will need to keep their eyes on their brand and consumers.
One thing can be said with certainty - it’s not an easy time for retail. But, a changing marketplace has opened up opportunities for transformation. Now is the time where the industry can continue to work on finding it’s footing and defining what exactly this reinvented retail world looks like.
So what have we learnt?
1. Physical retail spaces can tell the best stories
Online shopping isn’t the end of in-store - rather, the two channels can work to complement one another. While online shopping allows for convenience and variety, physical stores give customers expertise, experienceand a destination to visit rather than just make a transaction - it’s a great opportunity for brand immersion.
In 2018 we continued to see a strong personalisation trend. This trend will still be relevant this year, but we’re also going to see it combine with a desire for experience. Consumers want to build products and customise them in a way that tells a story and represents their lifestyle and values.
And while they do this, they want to have fun in-store, too.Tod’s new boutique, for example, is designed to feel like a luxury apartment allowing customers to explore a lifestyle rather than just buy a pair of shoes or a bag.
Where retailers get this right, these strongly branded, immersive, and interactive spaces have the opportunity to lead to huge wins in sales, engagement and loyalty.
This year, encourage your customers to immerse themselves in your brand story to create their own story - and tailor your retail space and your products to allow them to do so.
2. The edge of in-store is in its people
Consumers are more inclined to associate themselves with brands that reflect their personal views, beliefs and values. This is becoming especially true in a time where buyers have so many options in terms of price and quality. To some extent, products can be replicated. Price can, too. But what cannot be duplicated is the unique and nuanced relationship that a buyer develops with a brand.
Over the past few years, the industry has begun to understand the importance of brand authenticity and sustainability - and this will continue to grow in 2019. In-store retail has a very unique advantage here: their staff. Shopfloor teams are the strongest brand communicators that retailers have, so it’s important to harness them with the talent development to amplify brand values and provide customers with the one thing that online simply cannot compete with - expertise and service.
3. Data science is taking the guesswork out of retail
Another trend reported in 2018(and 2017, and 2016, …) was data - lots of data. Most retailers already have more of this than they use - so quantity really isn’t the challenge here. Rather, the industry needs to focus on channeling thisdata into ways to measure business performance. The rise of data-collection and analytics tools is helping retailers explore new ways to market, sell, service and operate. Now is the time to really integrate new tech into the core of retail businesses.
This article written by our Senior Data Scientist, Daniel Chamberlain, outlines five steps to follow for retailers to start or improve their data-driven approach. In short, the steps to follow are:
1 . Prioritise your data
2 . Clean your data
3 . Build automated reports and analytics
4 . Leave space for creative analytics
5 . Repeat
The trend of forecasting and optimising consumer purchases will not slow down in 2019. But data driven tech shouldn’t just be kept to a consumer-facing level. The very foundations of how businesses are run - the operations and processes that happen in the background everyday - these are the areas that can benefit from data-driven tech the most.