3 March 2017
How do you shop? Online or in store? Does it vary depending upon what you’re buying?
I was fascinated to read an article about a US retail giant target this morning http://wolfstreet.com/2017/02/28/collapse-brick-and-mortar-retail-what-do-with-retail-malls/. The article announces ‘unexpected softness’ in physical retail store sales. The company’s sales have been fairly stagnant for six years or so now, with Q4 2016 falling 4.3% year on year but online sales growing.
Falling bricks-and-mortar sales comes as no surprise though, the focus of the retail industry has been heading that way for some time, especially here in the UK.
The latest PwC Total Retail survey https://www.pwc.com/gx/en/industries/retail-consumer/total-retail.html gives insight into why, mobile is growing. If you think about it, we have these constantly connected devices in our hands all day and beside us at night (unless you have a no phones upstairs rule, like in my house).
Whenever you need something in a hurry, you no longer have to pop out to the shop after work, you can buy it on your smartphone there and then. The survey revealed that 38% of global consumers buy via mobile at least every month. Additionally, 60% of consumers prefer to buy books, music, movies and games online, and 28% buy all or most of their clothing and footwear online.
However, DIY and electronics still centre on physical stores, as do grocery shopping with 70% of consumers preferring to buy in store.
So what’s the future for the high street? Overall retail sales dropped in January this year, not helped by sterling stumbling and prices rising. However reading that “repeated sales disappointments point to a severe growth slowdown in the UK” concerns me. More because this is a huge statement to make and it could become a big distraction from where retailers’ focus should be.
To me, you shouldn’t focus on uncertainty around brexit or the economy for example, you should be looking closer to home; at how you can improve your business, what technology you can bring in to streamline processes and improve efficiency, and how you can strengthen your business. This way, no matter what happens, you’re in a strong position.
We weathered the last financial crisis by continuing to grow and invest, rather than tightening the purse strings and I learned a valuable lesson throughout that – not to be distracted by the news and what could happen.
Perhaps the focus for traditional retail stores should be on how they can integrate mobile shopping behaviour into their stores?
What do you think the future of retail in the UK is?