Retailers rushed to digitalise in lockdown, will cut city stores - Barclays report
While the headline news is largely about retail job cuts, there’s one area where jobs are growing and that’s e-tail. A new report on Thursday said 15% of UK companies have recently created roles specifically to cater to an increase in digital sales and to boost their online capacity.
Barclays Corporate Banking (BCB) also revealed that 26% of industry leaders believe the pandemic has accelerated a ‘technological revolution’ in retail and confidence is high in this area.
Companies are also looking to do things differently than they did pre-pandemic and retailers want to localise supply chains and increase support for communities, especially sports retailers at 33%.
BCB spoke to 300 senior retail executives for its new white paper: Survive and thrive: how the UK’s retailers are adapting to the ‘new normal’.
It said the UK is already the world’s third largest market for e-commerce and its growth looks set to accelerate as a substantial number of businesses invested even further in technology under lockdown. A third have had website upgrades with 40% of department stores and 39% of fashion retailers having done so. Meanwhile, 32% have started to accept new payment methods and 26% embraced data analytics for the first time. The same percentage have been selling more through social channels and fashion retailers lead the way here on 37%.
Additionally, to help reduce queues in-store, 24% have started offering click & collect options.
Overall, around 60% of retailers are confident of growth in the next three months (although that rises to 72% for health & beauty stores) with 94% confident about growing next year.
The study also showed that 20% of businesses believe the future of retail is in local high streets rather than city centres.
While that’s good news for those high streets, especially given the focus that has been on how much they’ve declined in recent years, it presents a dilemma for the city centres that have seen so much retail development in the same period.
The UK’s key cities have been retail magnets and the high rents charged reflect their former pulling power. But the lack of tourists and the move to working from home have left many with little visitor traffic. Footfall to London’s usually-buzzing West End, for instance, is still down more than 60% year-on-year.
So it’s no surprise that the study said as many as 15% of retail businesses plan to reduce the number of physical stores they have in urban areas close to office buildings within the next year. Health & beauty retailers (28%) are the most likely to do so in the next 12 months.
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