More than half prepare for increased overseas competition
Research released today from VoucherCodes reveals one-third of British retailers (32 per cent) fully anticipate Britain’s exit from the European Union will have a negative impact on business. The report, analysing attitudes towards the changing face of the retail industry, also finds that just 4 per cent of retailers have confidence in British retail following the result of the EU referendum.
The research was carried out by VoucherCodes in conjunction with WBR and surveyed 100 senior executives at major UK retailers from the fashion, luxury, sports, homeware, consumer electronics and DIY industries.
The Retail Horizon
With this lack of confidence in mind, it is not a surprise that two-thirds of retailers (64 per cent) confessed their biggest concern about the future of the industry was its unpredictability. Retailers cannot predict the direction the industry will lead post-Brexit, creating concerns over investment and wider strategy to be able to succeed in an unknown environment. In fact, this feeling of ambiguity spurred by Brexit pervades the way retailers feel about the future across the board.
In addition to the uncertainty around the macro-economic situation, 57 per cent of retailers also felt they lacked sufficient knowledge of the technology required in order to stay ahead of the game. A further 54 per cent said they were concerned about falling behind in a market where constant change is the only consistency.
What’s more, the report reveals an overwhelming majority of UK retailers (90 per cent) said it is impossible to predict what skills will be needed in the industry in five years’ time, whilst seven in 10 predict that customers will be shopping in an entirely different and unforeseen way.
Also amongst retailers’ growing concerns is increased competition from overseas retailers – a direct implication of the Brexit vote. Over half of retailers (51 per cent) predict competition from overseas retailers will increase within the next 12 months, particularly from online-only players nimble enough to strip market share whilst the pound is low, and see this as a major challenge their businesses will need to face head on.
What are retailers doing to prepare?
Political uncertainty in this capricious industry has encouraged retailers to focus on investment and adaptability in order to future-proof their businesses. In terms of investments, it appears mobile is still king. In fact, mobile commerce remains one of the few areas retailers are confident will remain stable, with 100 per cent of all retailers surveyed believing the UK’s mobile retail presence will be even stronger by 2022.
In order to prepare, more than a quarter (26 per cent) of UK retailers will be investing heavily in their mobile presence over the next 12 months, whilst almost one-third (31 per cent) plan to redesign their online presence, including mobile eCommerce sites and social channels.
More generally, an overwhelming majority of UK retailers (99 per cent) have considered new technology investment as part of their business strategies during the next year, showing confidence in digital investments across the board.
However there is also an increased focus on utilising technology to close the loop between in-store and online. One-fifth of retailers (19 per cent) are planning to focus more attention and investment on bringing tech into the physical store, for example supplying bricks and mortar staff with iPads on the shop floor for customers to utilise.
Paul Lewis, Senior Director of Marketing at VoucherCodes said: “The watchword for the next 12 months or so is ‘uncertainty’. Retailers will obviously continue to keep one wary eye on the ongoing Brexit negotiations in Brussels, and another on the fluctuating pound. However, the UK retail market has strong foundations as one of the largest eCommerce markets in Europe so, whilst the future is indeed uncertain, it is important for businesses not to get caught up in this.
“No one can predict the direction the industry is heading post-Brexit, so retailers must future-proof their businesses by focusing on areas of investment and adaptability where customer demand is high.
“Smart retailers will be mindful of the changing industry whilst simultaneously focusing on the opportunities they can see on the horizon in order to keep up with customer demand – investing in new technology to revamp online platforms, as well as technology to invigorate physical stores, turning them into powerful brand differentiators in their own right.”