Sluggish consumer demand at the start of the year and political uncertainty as the EU negotiations come to a head probably aren’t the conditions the UK retail industry would choose. Yet, while events beyond its destiny can’t be shaped, is there still hope that retailers can grow in 2018?
In many respects, retailers have little choice but to embrace change. Standing still isn’t an option in a fast-moving market. A retail store will need to work extra hard to win over a customer who now has the choice to shop in-store or online, especially given the growth of mobile. The common retail store has had to transform into something much more, becoming a destination that offers a user experience that extends beyonds the sale. This trend is set to continue in 2018 as retailers explore new ways to attract footfall, especially to flagship stores in retail parks.
Social media plays a big part in the story of retail too, helping brands to build a reputation and capture new customers. It serves as a tool to drum up excitement and a way to drive customer engagement. With Facebook’s changes to its news feed for 2018 – brands will also need to consider more carefully how they can cut through and still reach the eyeballs of the right customers too.
No-one should ignore the potential for Brexit to have an impact. Yet, right now, it’s difficult to say what exactly this will be. There’s no doubt that this poses a challenge, the issue is what the nature of that challenge will be. Retailers will be particularly concerned about any increased cost when it comes to sourcing supplies and materials from EU countries as well as the rules that might govern overseas sales.
Retailers are, however, used to challenges in recent years. That’s why we are seeing existing retailers taking advantage of technology, to get ahead of their competitors.
One way in which retail is looking to innovate with technology is through artificial intelligence. Retailers have already started using AI technology via the web, voice, messaging and email. They are already using bots to communicate through online chats, for example, and are looking for ways to use voice-activated services such as Amazon’s Alexa. A Report by Gartner suggests that by 2020, more than 85% of customer interaction will be handled by artificial intelligence.
While this is very much experimental technology, there are more obvious and immediate ways in which technology is shaping retail too. There’s a growing market to speed up processes, including inventory tracking, point of sale systems and automated accounts. All of this helps retailers to be quicker and more efficient in an era in which customers demand fast service.
Whether or not this results in growth is another matter. Innovation is needed for retailers to survive, let alone move forward and survival is the first priority before growth even comes into the equation. But that’s not to say growth is impossible. Retailers who embrace the power of new technologies first and best will be well placed to steal a march on their rivals and win the affections of ever-demanding customers. Technology – as in so many areas – is key to the story.