The pandemic has had a detrimental impact on the UK’s retail sector. While e-commerce has boomed during lockdown, bricks-and-mortar spaces have suffered. As we look towards economic recovery, we need to make sure that our shops are here to stay. Increasing consumer spending power, bringing consumers back to our high streets, embracing new technologies and sustained government economic support are just some of the ways that we can build our retail sector back better.
The past year and a half has exacerbated the existing challenges that the industry has been enduring, such as the huge rise in online shopping and the bedding down of Brexit-related changes. According to the Office for National Statistics, the total volume of retail sales in Great Britain fell by 1.9 per cent last year, compared with the previous year – the largest fall since records began. Although online sales rose to a record high of 33.9 per cent as a share of all retail spending, traditional retail spaces have been hard hit.
In order to revitalise the retail sector, we need to boost consumer spending power and integrate other sectors such as food, drink and leisure into shopping districts. Andrew Carter, Chief Executive the Centre for Cities think-tank, highlights that good jobs and strong local economies are key for the future of the high street, and will kickstart our retail sector.
Building partnerships between different stakeholders is a core element of the future of retail, according to the New West End Company in London. Cooperation between retailers, brands, landlords, the public and policy makers would help to drive the sector’s growth and draw consumers back to our shopping districts. For example, some retailers have been successful at integrating click and collect services with physical shopping. Embracing cutting-edge technology and creating IT platforms in this way will also help British retailers to compete against online marketplace giants which have exploded during the Covid pandemic.
Disruptive technologies can also be utilised to drive the sector’s recovery and growth. Streamlined payment options, AI, and personalisation are just some ways that the retail sector can remain agile and respond to consumers’ needs. Fast checkouts, virtual reality, in-store analytics and new payment options are a few innovative technological solutions that can be rolled out by retailers to stay abreast of consumers’ shopping habits.
According to a report published by the consulting firm McKinsey, a holistic technology-enabled ‘reboot’ could increase UK retailers’ margins by 280-600 basis points. From my own career in the retail sector, I appreciate the fundamental impact that technology can have on accelerating growth, productivity and efficiency for businesses.
In July this year, the government launched the Build Back Better High Streets Strategy as part of the Prime Minister’s Levelling Up agenda. This should be expanded in order to support our retail sector more broadly and robustly. Although relief was provided by the government since the beginning of the pandemic, the Chancellor should avoid the cliff-edge of ending this support.
Looking ahead, building back better depends on supporting a vibrant, innovative and sustainable retail sector that can swiftly respond to consumer demands. Reimagining the way that we look at shopping districts in our cities and recognising the power that digital tools have to transform our retail spaces to encourage consumers to part with their hard-earned cash will be key. If the government really believes in building back better, it must look to our retail sector to lead the charge.