Sophie Michael, Head of Retail at BDO, looks at the key trends retailers need to address in 2020.
Despite the meaningful role retail plays in the UK economy, accounting for around 5% of GDP and employing almost three million people, support from both the government and the investment community remains sparse.
More than ten years on from the credit crunch, business rates remain in desperate need of reform. Many businesses are finding it increasingly challenging, if not impossible, to access the credit or re-financing they need. Consumers are also becoming ever more demanding, insisting on value, convenience and environmentally responsible approaches, all while restricting what they are spending and channelling growing proportions of their income into services and experiences, rather than traditional retail.
However, far from this being a time to sit still and wait for conditions to improve, we have identified the coming years as a crucial time for retailers to be proactive and begin, or accelerate, adapting to the raft of further challenges and opportunities the next decade is set to bring. There are many trends that retailers need to address in 2020.
What can retailers do?
The following list is by no means complete, but includes some of the more impactful factors that are relevant to retailers as the sector heads into the next decade:
- Investing in and exploiting new technology to meet the rising demands of connected shoppers in a cost effective manner
- Competing with disruptive new subscription based payment models
- Meeting increasing consumer interest in having products and services tailored to their lifestyles
- Re-shaping store portfolios to fit modern customer shopping habits
- Overhauling supply chains to deal with the growth of home delivery and click & collect
- Adapting to the growing spending power of older shoppers
- Navigating falling home owner-occupier rates
- Becoming truly ethical and environmentally aware businesses.
Those retailers which accept and embrace these challenges, whilst managing the cost and disruption involved will be the ones that are ultimately best placed to survive and thrive.
Gain more insights into the retail sector and find out what happened in 2019 by reading our latest Retail Forecast Report.
Sophie Michael is Partner and Head of Retail and Wholesale at BDO.