Over the last few weeks most major retailers have reported their trading figures for the Christmas period. The British Retail Consortium reported it was the worst Christmas in a decade, comparing total sales year on year in December. Whether this is because of changing shopping habits, the squeeze on margins, the rise of ‘Black Friday’ for example or simply online competition, it is clear the UK retail market is currently in the middle of significant structural change. Major retailers such as Marks & Spencer, Mothercare and Debenhams all have well publicised problems. Factors such as the 2017 business rates revaluation, high rents and operating costs have exacerbated the problem further. The non-food retailer is being hit particularly hard where spending is far more discretionary.
In the recent RICS Modus magazine an excellent article titled Retail 2.0 written by Charles Orion-Jones stated the only way high streets can survive and indeed fight back is by utilising advanced technology. A good example of new technology in practice is provided by MishiPay. MishiPay’s technology allows in-store shoppers to choose an item, scan the barcode with their phone, pay with their phone and simply leave the store. This saves time by removing the need to queue. Furthermore additional technology ensures that if a customer tries to walk out without paying, the store alarms will immediately sound. The company claim, ‘the system is a fully theft-proof, scan, pay and leave solution that eliminates queuing in retail stores and bridges the gap between e-commerce and bricks-and-mortar stores, creating a truly omni-channel experience’. If this technology is used and adopted more widely I think this could have a huge impact for shoppers.
Landlords are also adopting technology, particularly within the shopping centre environment. Using AI technology to help customers save time and money, a start-up company called BotsAndUs has created an interactive robot called ‘Bo’. The robot recommends products and helps customers find what they are looking for. Built-in software identifies and locates products and takes customers directly to them. The robot can also suggest alternatives to make the shopping trip faster and more interesting and has the added benefit of being able to capture real-time data to help inform instant changes to point of sale and marketing. This would certainly be an interesting addition to the high street. Perhaps this would need to be adapted for your average high street or shopping centre whereby an information point could advise on what you are looking for.
However, when it comes to non-food items like jewelry, electronics or expensive clothing that take more consideration before purchase, consumers who buy online are still more likely to buy with the support of a trained ‘human’ product expert than without. This is again where the retailers can change. The fashion chain Zara have recently trailed an app which allows customers to point a phone at a store display that triggers an on-screen appearance of a model wearing the item. The apps offers the opportunity to purchase the item and recommends items to complete the look. Nevertheless, the need of a sales assistant, despite more data being available to the consumer than ever before, is dramatically increased by the need of someone giving help and advice.
It is clear to all retailers the sector is changing and this is not going to stop or reverse. Other factors, from Brexit to low wage growth and changing consumer shopping habits, are having a substantial impact on the industry. However, evidence does suggest significant opportunities remain for those retailers who are prepared to adopt technology and are keen to remain flexible. If retailers are able to retain customers and their loyalty, the upside is that they will continue to want retail space and be able to pay rents and service charges to landlords.