Almost half (46%) of in-store retailers would back raising taxes for online shopping, despite many of those having an eCommerce presence themselves, according to market research by the leading global software provider for the retail and hospitality sectors, Fourth.
The data reveals that pharmaceutical retailers were most in favour of an online shopping tax (71%). Aside from the UK Treasury exploring options for an online sales tax, retail leaders believe extended shopping hours and government-funded vouchers are viable options to drive confidence back into the highstreet. While almost one-third (31%) of retail decision makers believe brands that diversify and differentiate the in-store and online guest experience will be most likely to come out on top this year.
The research comes as part of Fourth’s latest whitepaper: Post-pandemic retail: retail leaders’ plans and predictions for the industry, which explores what the future holds for physical retail stores and how retail businesses can best support their workforce. The whitepaper is built on insights from a survey of more than 250 UK retail leaders.
Key challenges: Attracting customers back to the high street
With the pandemic creating a major shift towards online shopping among consumers, almost one-third (29%) of retail decision makers believe attracting shoppers back to physical stores will be the top challenge for the retail industry as restrictions continue to ease. Unpredictable consumer demand (27%), as well as remaining competitive against eCommerce brands and keeping the shop floor Covid-safe for staff and customers (both 26%) closely follow as key concerns for over one-quarter of retail leaders.
For 38% of smaller businesses (500-999 employees), sourcing talent post-Brexit and confirming those staff have the correct visas and/or work permits is the number one business challenge, when compared to larger brands. Retail companies of more than 5,000 people on the other hand, are focused on enticing customers back to stores, with two-fifths (41%) prioritising competing with online retail.
Changing the face of retail: Creating a premium in-store experience
To compete with online-only brands, almost four in ten (39%) retail leaders plan to reduce offers and pivot to a more premium in-store experience, while another 35% plan to prioritise defining and blending the in-store and online shopper experience to extend brand interaction. The findings demonstrate retailers’ clear focus on keeping bricks-and-mortar retail appealing to consumers rather than dismissing it. While there is a clear move to premium among in-store retailers, many will also look to increase in-store loyalty through technology and in-store deals, with a third (33%) planning to implement an app or customer loyalty technology to push offers and updates, and 32% planning to run more frequent sales and in-store only offers. Alongside this, almost half (47%) of larger retailers (with more than 5,000 employees) will expand the product range they have available to stay competitive over the next year.
In addition to enhancing in-store experience, retraining current staff to improve staff engagement is a wider business priority for one-third (33%) of retailers. Whilst for 37% of smaller businesses (500-999 employees), finding efficiencies in labour costs is a top business priority, when compared to larger organisations.
Sebastien Sepierre, Managing Director – EMEA, Fourth, said: “Despite many leading brands now having an eCommerce presence, retail leaders are keen to see the government act swiftly to boost the physical retail industry ahead of restrictions lifting. While retail leaders are evolving the in-store experience to differentiate themselves and remain competitive, the future of retail is likely to look very different as a direct result of the pandemic with retailers fighting for talent and revenue. As part of the Build Back Better campaign the UK government needs to consider balancing the competitive advantage of online retail to give the British high street the chance to also thrive in a post-pandemic world.
“Retailers will also need to be prepared as they navigate this fast-changing physical retail environment in the months ahead. With some expected to completely reinvent the in-store experience to offer something customers simply can’t get online, we can expect to see an increase in pop-up retail spaces and more collaborative shop-in-shop concepts offering unique and immersive elements. Loyalty programmes will also see a renewal, as brands work to integrate the in-store and eCommerce experiences via apps and other customer engagement technologies.”