This post is by Liz Parry, Strategic Account Director at Teleperformance UK.
The UK retail market declined in June, but last month it was up 0.1%. That’s not much, but at least it’s positive growth and compared to a year ago there was 4.2% growth.
But the situation is complex. Oil prices are sinking with prices at below $39 a barrel as I write this – that’s lower than anything seen for at least six years. With reduced energy costs, retail logistics become cheaper and the UK has seen average in-store prices drop by 3% in the past year.
Inflation remains low and the Bank of England looks unlikely to do anything about a rate rise until next year, so the wage increases that people have been getting are finally feeling real.
After the tough years following the economic crash it finally looks like people in the UK are feeling better off and more confident in the future. The retail data shows that people are spending on home improvements and big-ticket items, such as furniture.
But what I noticed in that data that was really interesting for the UK is that 12.6% of all retail sales are now online. That’s growth of 13% in the past year in Internet shopping.
£1 in every £8 spent on retail is now coming from the Internet making it important for retailers to really start planning how their multichannel strategy works – if they have one – and what are the changing expectations of their customers? Customers that shop online have different needs and expectations to in-store customers, but often the two will blend. In-store shoppers also use the Internet and vice versa.
House of Fraser is a great example of a company that is exploring what this means. Their plans include the idea that they can use their stores as ‘beacons’ – even if the store is closed, the window displays will encourage online shopping and even if customers are in-store then the online option will be facilitated.
Customer service, logistics, and the complete customer experience online and in-store are all affected. With growth this fast in online shopping it’s time for more retailers to really consider what this means for the way they serve their shoppers.
What do you think about the new retail data? Leave a comment here or get in touch via my LinkedIn.
Photo by Ross Strachan licensed under Creative Commons.