Overcoming the Challenges of Changing Consumer Behaviour in the Retail Industry
With approximately 87 per cent of UK consumers purchasing at least one product online in 2017, online shopping is at the heart of contemporary shopping practices. With consumer behaviour and demands radically changing, retailers are having to keep pace with rapidly evolving consumer patterns to remain competitive. Failing to adapt to an omni-channel environment that caters for both online and physical stores, can see retailers being left behind.
As well as having to acclimatise to the increasing digital buying demands from consumers, retailers in the UK are not experiencing an easy ride on the high street.
In April this year, business rates in many regions in Britain increased for the second consecutive year, resulting in retailers paying an additional £2bn over the next three years compared to the last three years.
As well as rising business rates, increases in the National Minimum Wage and the new National Living Wage are pushing up payroll costs for retailers. According to the British Retail Consortium, the National Living Wage costs the retail industry between £1.5bn and £3bn every year.
The mounting popularity of online shopping and rising overheads for high street stores is resulting in many ‘bricks and mortar’ retailers paying rent they can no longer afford.
Consequently, we’ve seen a string of well-known high street brands go bust in recent years, including Toys R Us, Maplin and Jacques Vert. Others are closing stores across the country, such as New Look and House of Fraser, unable to afford spiralling costs at a time when online shopping increasingly dominates consumer behaviour.
This current climate gives online retailers the edge, with the likes of Amazon announcing it is planning to open cashier-less convenience stores that would threaten established food retailers like Tesco, Sainsburys and M&S.
How can high street retailers fight back in an unfavourable climate?
Retailers can and must adapt to the challenges the changing consumer and retail climate is creating by being dynamic in their business models and embracing the demand from consumers to buy products online.
In order to create an effective hybrid model that makes them more dynamic in the current environment, so they remain competitive and don’t become another brand that’s fallen into administration, retailers need the right talent which possess both traditional and transformative skillsets.
Leaders that that are digital savvy but at the same time conversant with traditional retail operations that nurture an effective growth strategy and empower others in their organisation, are key to the rapidly evolving retail landscape and overcoming the many challenges it presents.
Lee Cooper, Executive Search Partner for Consumer and Retail at Bailey Montagu, specialises in appointing leaders within the consumer and retail industries that have the right skillsets and knowledge to deliver critical business strategies and leadership within this challenging environment.
Contact Lee Cooper at Bailey Montagu to find exceptional retail leadership talent that will empower your business to growth during what can only be described as challenging time for British high street retailers.