Retail 2023 - A Point of View

One aspect I really enjoy in my role as a Solution Consultant, is researching what is going on from a technical perspective with regards to innovation and how this will drive businesses forwards.?This year I have been having a deeper look into trends around different areas of Retail and how technical innovations are changing UK Retail and the end experience we as customers will have as a result.

This is the first part of a blog series that I am planning on writing and in this instalment I am focussing on the use of ‘Bricks & Mortar’ stores versus online retail and why I personally hope physical stores remain an integral part of our overall shopping experience.

Talk of the high street store disappearing has been rife for many years and with the seemingly unstoppable growth of online shopping behemoths like Amazon and AliExpress (boosted by the boom in online sales during the COVID-19 pandemic), you could be forgiven for thinking the end is nigh for these stores.?However, despite the high streets reeling from the blows it was dealt during the pandemic, there are definite green shoots that can bring hope back to this area of retail.

2023 will see some brands investing big money in expanding their store footprint on the high street, whilst unfortunately others withdraw further.?Those companies that can create a differentiated in-store experience will continue to prosper and gather new customers whilst delighting existing ones.?However, it is not just about the experience, location is also proving to be a key success factor here.?Oxford Street in London for example used to be a must visit shopping location for those visiting the city, but as can be seen from this article that may no longer the case with multiple stores closed or being used as American Candy stores or cheap luggage outlets.

https://www.retailgazette.co.uk/blog/2023/02/shopfronts-oxford-street-shame/

Trying to buck that trend and get Oxford Street back on the map is IKEA.?The furniture brand will be opening a state-of-the-art store on Oxford Street where Top Shop used to be in the Autumn of 2023. ?To make this a success, IKEA are having to re-imagine their in store experience to be more fitting with the City centre location that comes with a lack of parking. I can't imagine many people walking down Oxford Street with a flat pack wardrobe under their arm, so the focus will be more on pay and take away on the day home furnishings that are in the room settings rather than the bulkier items in their traditional store blueprint. Last year, IKEA UK country manager Peter Jelkeby said

“The high street, and particularly a street of such international economic importance as Oxford Street, needs this type of investment and regeneration to continue attracting customers and visitors, as well as providing confidence [in] the UK’s high streets and inspiration to other retailers."

Just around the corner on Regent Street there are well known International brands with Flagship stores a plenty doing a roaring trade and attracting consumers, so the need is definitely there.?Personally, I really hope IKEA are successful with others following suit in trying new concepts to bring back the big stores to Oxford Street.

Why is that??Well, like many, I enjoy the ability to browse an endless list of websites that can quickly and very easily take my money and deliver goods to me in a seemingly unreal timeframe.?However, I do also enjoy the very personal aspect and experience of shopping in a real physical location.?Doing everything online is yes very convenient, but it is also, I am sorry to say it, very DULL.?I enjoy going the feeling of being in a store and finding a bargain that I didn’t know I needed all by myself, rather than being presented with a recommendation in an online store that has been derived by a curated AI process aimed at maximising sales of certain products.

Now, imagine a world where there are no physical shops for buying clothes, groceries etc, everything is done online, your shopping is conditioned and influenced by AI that is running in the background and ‘suggesting’ what you may like based upon an unseen algorithm.?Your order is then dispatched from a giant Distribution Centre that is run by robots and ends up at your door via an automated 5G Drone delivery.?

Sound far-fetched??Well, the fact is that we are not far away from this reality becoming true.?What is the problem with this I hear you cry??Well for businesses it is great as it drives a much lower cost to serve and therefore drives profitability up making the shareholders happy.?

But, is this really a great result for you the consumer??Are companies treating cheaper running costs as more important than delivering a great customer experience? Organisations that can optimise delivering great experience across multiple channels (online, in-store, social, meta-verse etc.) in a cost effective way will stay the course and be profitable, whilst those that rush to cut costs will become less attractive as the consumer experience wanes.

Humans, for the most part are social beings, and what the pandemic taught us was that we love interaction with other people and when you are denied that it can have a huge impact on mental health and well-being.?It has been proven before that shopping releases Endorphins and Dopamine into our bodies and gives us something to look forwards to.

https://health.clevelandclinic.org/retail-therapy-shopping-compulsion/

This innate need for a ‘retail destination’ can be seen with some big high street store openings that drive sensory inputs to another level such as Gymshark, who opened their first flagship store on London’s Regent Street in October 2022 which in their own words

So, whilst it is easy to get caught up in the doom and gloom of numerous store closures and retailers going into Administration, I have hope that companies can still see the very tangible value of having physical stores offering real in person shopping experiences as opposed to being a faceless online store. Creating an innovative in person experience is not easy or cheap, but it clearly offers companies that are willing to invest in this channel a route to market and differentiated service that other organisations can't. The key is how they use that opportunity to set them apart from the competition and this is something I will touch on in the next part of this series.?Thank you for reading.

About the Author: - John Pell is a UK based Solution Consultant at ServiceNow and has worked in the IT industry for over 20 years covering various roles and industries.

PLEASE NOTE : The views expressed in this article are those of the author and are not representative of the author's employer.

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