The outlook for the retail industry in 2019

The retail industry has been in a constant state of flux for the past 10 years, we look at 3 key issues facing retailers in 2019.

The number of retailers entering administration rose for the second year in a row, from 118 in 2017 to 125. The increasing evolving structure of shopping is hitting traditional retailers hard and it certainly seems they are facing an adapt or die scenario, with consumers mindset shifted to a mobile and online first, you either have an online presence or you don’t trade, simple as that.


 

  • The B word

  • Consumers want meaningful engagement from retailers

  • The removal of checkouts?

 

The B word.

With Brexit just under 3 months away and the outcome of the proposed vote in parliament uncertain, there is a growing dread in many retailer’s eyes on how they will cope with a no-deal Brexit. The three concerns for UK retailers on a no-deal Brexit focus on the increasing cost of supply chains with WTO rules.

Secondly is the rise of tariffs which mean further costs on all goods and services that come from the EU which in turn would hurt the consumer and potentially lead to lower demand. And finally, the increasing cost of labour, with the retail sector relying on 300,000+ EU migrant workers, this will cause further strain on the structure of certain retailers who will have to hire more and increase wages.

Overall, it’s hard to know exactly how Brexit will affect the retail industry and it shows with more than a third of UK retailers unprepared for a no-deal Brexit.

Consumers want meaningful engagement from retailers.

Consumers want products and experiences that relate to them, which they can share to the world. Retail stores can’t just be a store anymore they have to have some sort of meaning to them to grasp the attention of the customer, the design of a store is just as important as the product.

This means creating experiences in-store that will bring customers to see it and share it on social media, this is called experiential retail, which is the idea is that a retailer offers consumers a chance to buy an experience rather than just an object or service.

It is now becoming increasingly harder for a retailer to get consumers to come in a store the traditional way, now retailers must offer consumers more than just a product or a service.

The removal of checkouts?

Spearheaded by Amazons Cashierless store ‘Amazon go’, cashless stores are on the rise and are slated to hit the UK in 2019 with Amazon filing trademarks with the UK intellectual property office that leads to believe them bringing Amazon go to the UK.

2019 could be the year that checkouts and lines start to disappear as the business model becomes more popular, with analysts predicting Amazon’s cashierless store becoming a $4.5B business by 2021.

However, there is uncertainty if the increasing use of cashierless stores would lead to job loses but as shown with self-checkouts, employers will always adapt its workforce around technology and find new roles for its workers.

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