Omnichannel digital commerce and ‘localism’ will drive demand for new skills in the retail sector says Bank of Ireland’s head of Retail Sector Owen Clifford.
Irish retailers are now examining how best to encourage their customers back to their stores whilst considering the appropriate blend of online/offline sales channels in a post-pandemic trading environment.
In his latest analysis as part of the Sector Developments and Insights for June from the Bank of Ireland Sectors team, head of Retail Sector Owen Clifford said that looking to emerging trends from the UK where retail sales have been robust since the easing of Covid restrictions, there is pent-up desire to re-visit physical stores.
“The pace of change in the sector is unrelenting and progressive Irish retailers are continuously re-aligning their business models to meet evolving consumer demands and preferences”
However, he warned that the retailer’s digital presence is the new front window, resulting in the sector needing to embrace new trends and invest in personnel development to capitalise on digital and localism trends.
Online is the new ‘front door’
Clifford reported that grocery retailers continue to deliver a strong performance with the latest Kantar data outlining a sales increase of 18pc when compared with the equivalent period in 2019. The data also highlights that Irish consumers are becoming more comfortable visiting supermarkets linked to the vaccination roll-out with an additional 2m trips to the supermarket recorded compared with the same period in 2020. The desire to support Irish brands continues with the sales of home-grown products growing faster than imported counterparts.
The biggest battle retailers will face post-pandemic will centre on remaining relevant to an utterly transformed customer base.
“As communities worldwide emerge from their pandemic induced cocoons, a number of trends are starting to emerge that will shape the retail landscape in the months and years ahead. The pace of change in the sector is unrelenting and progressive Irish retailers are continuously re-aligning their business models to meet evolving consumer demands and preferences,” Clifford warned.
“The majority of retailers now recognise that their online platform is the ‘front-door’ of their store. Greater cohesion between the physical store network and the online platform is now an imperative. The physical store will need to evolve to be both a showcase for the brand and an efficient micro-fulfilment hub – facilitating improved click and collect offerings, faster home delivery and cost-effective product returns.
“The regional/local store has a key role to play in this regard and retailers nationwide are investing in technology and systems that facilitate improved collaboration between all aspects of their business – purchasing, stock management, online platform, physical store and customer experience/analytics.”
New skills for a new landscape
Owen Clifford, head of Retail Sector at Bank of Ireland
“Retailers that proactively demonstrate community focused values and a commitment to local issues will attract and retain a loyal customer base ensuring that life-line shoppers become life-time ambassadors for their stores”
Clifford said that the skillset required within the retail environment is changing rapidly.
“Retailers need to actively invest in up-skilling their personnel in areas such as data analytics, online fulfilment, supply-chain management etc to reflect this evolving market. The creation of a structured employee development pathway will ensure that the best people are attracted and retained. Investment in people and technology is an imperative to ensure that a top-class customer service is delivered consistently.”
The return of specialism
In a world that offers unprecedented choice, Clifford said consumers are now returning to specialist stores seeking expert advice and quality across a range of categories.
“The consumer wants to treat themselves but is also conscious of production ethics, provenance and supply-chain transparency. Retailers that can deliver bespoke, customised products and services will create brand ambassadors and importantly loyal customers prepared to pay more on a regular basis. In a competitive marketplace, standing-out not fitting-in will drive longevity.
“The increase in remote working practices has led to increased footfall in regional towns and suburbs. We are all more aware that shopping locally is an intrinsic element of sustaining a vibrant, local community. Retail stores are critical to revitalising urban locations, helping stimulate local economies and social integration.
“A balanced, progressive retail strategy needs to be at the heart of any regional revitalisation programme. This strategy needs to support local retailers whilst also ensuring that footfall driving nationwide brands are encouraged to maintain a regional footprint.
“Retailers that proactively demonstrate community focused values and a commitment to local issues will attract and retain a loyal customer base ensuring that life-line shoppers become life-time ambassadors for their stores.”
The rise of localism
Looking to the UK where the retail sector performed strongly after the easing of Covid restrictions, Clifford said that the early pent-up demand and retail focused spending has tapered as consumers now divide their disposal income between retail and hospitality outlets.
“Retailers will need to reconsider the focus and re-configure their city-centre stores – they will become showcases for their brand – carrying less stock but a more interactive, advice-led and entertainment-focused proposition for the shopper”
“Health and safety remain a critical element of the retail journey and shoppers continue to utilise on-line channels to pre-evaluate their shopping preferences and decisions. An informative, user-friendly online portal displaying real-time information in respect of stock availability and price is becoming ever more important to encourage shoppers to visit a physical store.”
Clifford urged that a balanced, progressive retail strategy needs to be at the heart of any regional revitalisation programme. “This strategy needs to support local retailers whilst also ensuring that footfall driving nationwide brands are encouraged to maintain a regional footprint. As retailers examine the optimal balance between their physical store and online channels to retain in a post-pandemic environment, they need to factor in this shift in consumer behaviour.”
As “localism” thrives, the future of the city-centre store is now being questioned, he said.
“Psychologists tell us that we are at our core ‘social beings’. We will once again pack out venues to support our favourite sports teams or listen to our favourite bands when we could easily do the same from the comfort of our sofa. Why? Because we value and enjoy the human interaction and overall experience that these events provide.
“A trip to the city centre will also continue to offer an escape from our busy lives and an experience that on-line shopping cannot replicate – seeing, smelling, trying and testing products, touching them, speaking with knowledgeable sales staff, engaging with other people in-store.
“Retailers will need to reconsider the focus and re-configure their city-centre stores – they will become showcases for their brand – carrying less stock but a more interactive, advice-led and entertainment-focused proposition for the shopper.
By John Kennedy (firstname.lastname@example.org)
Published: 6 June 2021