Can technology save UK brick-and-mortar retail from the perfect storm?

By Karen Bomber

2018 will probably go down in history as UK retail’s ‘annus horribilis’, with record numbers of shop closures and job losses unseen since the 2008 recession. The causes of this negative trend are quite apparent: a seemingly unstoppable migration towards online shopping, rising staff costs, and spiralling rents – combined with the uncertainties of Brexit – are often cited as the main culprits.

So, are brick-and-mortar retailers inevitably heading into a perfect storm or can they still turn the tide? And to what extent can technology step in to help?

Between January and July this year, UK retail suffered thousands of store closures and an astonishing 46,000 job losses, nearly five times as many as in the first half of 2017. This trend may seem destined to continue, unless brick-and-mortar retailers find new ways to become more competitive and evolve to meet changing customer expectations. The good thing is that most of them seem to be well aware of the key challenges that they need to address.

Attracting and retaining today’s shoppers

A recent study conducted by Honeywell and YouGov suggests that the majority of retailers (56 percent) believe they simply aren’t doing enough to meet today’s customer expectations.

In particular, many of them show low confidence in how they perform against competitors in areas including handling returns, POS experience, and home delivery. They also see ‘finding and retaining the best employees’ and ‘integrating the online and in-store experience’ as some of the biggest challenges they face.

These findings are echoed in a recent PwC study, according to which ‘innovation’, ‘investing in talent and the training and development of their in-store associates’, combined with ‘fast and reliable delivery and a good returns policy’ are three key ‘battlegrounds’ that retailers must focus on to better attract and retain today’s mercurial shoppers. This is where technology comes in.

Retail's greatest challenges today chart

Letting insight be in the driver’s seat

There is evidence to suggest that the majority of retailers who have adopted an insights-driven decision-making approach have been successful in increasing their revenues. This is because access to real-time data and predictive analytics can boost efficiency in managing the right levels of inventory and staffing. Data-driven retailers can also benefit from greater flexibility, improved accuracy and faster transaction times to meet their customer base’s omnichannel expectations.

Advanced analytics, smartphone and mobile apps are the top three technologies that, according to the Honeywell/YouGov study, will help brick-and-mortar retailers stay competitive and grow. They provide both the data to develop consumer insights and the direction to optimise consumer experiences. As such, they are critical to attract, engage and retain customers.

Unsurprisingly, 1 in 2 retailers sees ‘serving the customer in a timely and efficient manner’ as one of their investment priorities for the next two years. This includes speeding up the point-of-sale process, providing convenient delivery options for customers – such as ‘buy online, pick up in store’ – and seamless delivery between online and retail stores.

Technologies currently in use chart

Going mobile

So how is it possible to achieve such ambitious goals in today’s fast-paced shopping space? The answer – for 67 percent of retailers – seems to lie in mobile technology. Mobile devices are key to improving the bottom line and enhancing the customer experience and many retailers have already started to deploy them on the shop floor and in the warehouse – both at the point of sale and at delivery.

Mobile technology can, for example, help streamline click-and-collect and stock inventory processes. As soon as an item ordered through click-and-collect arrives in store, shop assistants can quickly scan it on arrival with their handheld computers. These immediately notify the customer that the item is ready for them to collect. When the customer arrives, a shop assistant can easily scan the item to automatically update the stock inventory.

Employee using phone

Boosting employee engagement

As mentioned earlier, however, technology alone is not enough to address today’s challenges. Brick-and-mortar retailers also need their employees’ buy-in.

The retail sector has one of the lowest retention rates of all UK industries and its workforce appears to be one of the least engaged. And – with record job losses this year – the sector may become even less attractive to both existing employees and job seekers. A transformation of the shop assistant role is clearly needed if brick-and-mortar retailers are hoping to attract and retain new talent, especially millennials, who are expected to make up 50 percent of the global workforce by 2020.

The deployment of mobile technology can play a key role in boosting employee engagement. It can help retailers empower their disengaged shop assistants –– with mobile technology that offers the same ease-of-use and interactivity they are accustomed to in their leisure time.

Customers using phone to compare prices

According to a PwC study, millennials 'have grown up with broadband, smartphones, laptops, and social media being the norm and expect instant access to information […] they routinely make use of their own technology at work and three-quarters believe that access to technology makes them more effective at work'.

Mobile devices and data access also match the features and functionality of the smartphones used by customers. The devices themselves are just one aspect of the shop floor transformation that mobile technology can bring about.

Checkout lanes that once lined the front of the shop can give way to tablet-wielding shop assistants and small self-service kiosks placed strategically throughout the sales floor. The change subsequently gives way to more high-value merchandise, a more appealing store atmosphere, and, along with comprehensive associate training, can enhance employee engagement.

Customers holding phone and umbrella

This isn’t the end of the high street

It is clear that online – and increasingly, mobile – shopping is here to stay. Over the past ten years, online sales in the UK have increased steadily from less than 3 percent of the total retail sector’s sales to over 17 percent, and this trend is set to continue.

However, this is not the end of the high street. The fact that, according to recent US study, traditional stores still account for 80 percent of apparel purchases suggests that brick-and-mortar retail still has an important role to play. Mobile technology is key to helping this sector evolve and adapt to changing customer needs, turning today’s challenges into new opportunities to grow.

Karen Bomber, Director of Vertical Marketing, Honeywell

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