Published on September 3rd, 2020 | by The GC Team0
‘Technological revolution’ but future of physical retail may be local high streets
- More than one in four industry leaders believe the pandemic has accelerated a ‘technological revolution’ in retail
- Confidence is high, with home improvement / DIY firms most upbeat about growth
- 94% of retail industry bosses optimistic about growth opportunities in the next year
- Retailers looking to localise supply chains and increase support for communities
- As the number of urban outlets fall, the future of the physical retail industry may be on local high streets rather than in city centres
The growth in online shopping during the coronavirus pandemic has seen 15% of UK retailers create roles specifically to cater to an increase in digital sales and boost online capacity.
According to a study of over 300 senior retail executives, conducted by Barclays Corporate Banking, more than a quarter of those surveyed think the pandemic has accelerated a ‘technological revolution’ in retail.
The UK is the world’s third largest market for e-commerce, and a substantial number of businesses have invested further in technology under lockdown, according to the research. A third of retailers have had website upgrades, 32% have started to accept new payment methods and 26% have embraced data analytics for the first time.
Additionally, to help reduce in-store queues, nearly a quarter of retailers have started offering Click & Collect options, with home improvement/DIY retailers (40%) most likely to have introduced this during lockdown.
The home improvement category is also the most confident of short-term growth, with 80% positive about revenue growth in the next three months, compared to an industry average of 60%.
Longer term, confidence grows even stronger, with 94% of retail industry bosses optimistic about growth opportunities in the next year.
Karen Johnson, Head of Retail and Wholesale for Barclays Corporate Banking, said: “The last few months have undoubtedly been challenging for the sector, and we are hearing frequent news of jobs being put at risk.
“Against that backdrop, however, e-commerce and digital sales have demonstrated significant improvement and have helped to maintain year-on-year growth for many businesses. Despite the unprecedented uncertainty and disruption, the results of our survey are encouraging, and it is great to see retail leaders confident about their prospects. Many are using the ‘new normal’ to innovate and adapt their business models.”
Another emerging development is the shift towards a more localised retail model. 39% of Barclays’ research respondents experienced supply chain disruption during lockdown, and 27% are moving to suppliers based closer by as a result. Home improvement / DIY firms (53%) are most likely to do this.
In addition, 28% of retail businesses plan to do more to support local communities, while a fifth believe the future of retail is in local high streets rather than city centres. With homeworking set to continue for many people, in parallel with concern about public transport and busy shopping areas, the research shows a move towards more localised business operations.
“We could also see the number of urban outlets fall further in the longer term, with one in five of respondents (20%) telling us they see the future of the physical retail industry on local high streets rather than in city centres,” the study said.