The UK retail industry is changing. Traditional 'brick-and-mortar' stores are struggling, with 15 store closures a day during the first half of 2016. This trend has continued in 2017, as retail sales continue to drop due to rising prices. Even Christmas sales have been in decline for the past four years.
'This is the toughest retail market we have ever seen by some distance,' says retail analyst Richard Hyman. '"Build it and they will come" might be true in Field of Dreams, but in business you can't carry on doing that.'
With such high closure rates and an industry struggling for growth, retailers face problems that impact their profitability, such as:
- Rising business rates. Around 510,000 businesses face a 300 percent increase in business rates. The British Retail Consortium (BRC) has said that retailers will pay an extra two billion pounds in business rates over the next three years.
- Increased staff costs. As of April 2017, the National Living Wage rises to £7.50 for staff aged 25 or over. Retailers have also been under pressure to instate pay rises across their ranks, not just the minimum wage workers. John Lewis paid out £33m in raises to its whole workforce due to this pressure. Their actual liability under the new rules was only three million.
- Depreciation of the Pound Sterling (£). Before the Brexit referendum the pound was trading at $1.47. It has since seen a 12 percent reduction to $1.29. This results in higher import costs, increasing the price consumers pay for goods.
Although these are not good omens for retailers, they present an opportunity for software developers to increase revenue and business growth by helping retailers stay competitive. How do they do this? By showing how technology keeps gives retailers the competitive edge.
How to stay competitive in the retail industry
Due to the state of the retail industry, it has never been more important to stay competitive. Simply having a superior product is no longer enough as, according to Deloitte, retailers now need to focus on:
- Customer analytics. Customers enjoy a personalised experience with a brand. Using adaptive interaction rules, retailers can leverage valuable consumer behaviour insights to optimise customer experiences.
- On-demand capability. Shoppers expect quick delivery, at a competitive price, often with free shipping and returns, and technology is the best way to achieve this.
- Social media. Many social networks function as another 'front door' for shoppers and customers can even buy direct through a retailer's social pages. With the vast numbers on social media, even minor growth spurts could represent significant income for retailers.
- Emerging technologies. Retailers can reduce costs and streamline operations through developing technologies such as artificial intelligence and the internet of things.
- Customer engagement. There are too many retailers fighting for a customer's attention so they need to start pulling customers in by engaging them. Technology plays a vital role in enabling retailers to achieve this.
ISVs help retailers buy into digital
Technology isn't just a vital competitive advantage for retailers; their customers are also embracing digital. The biggest retail market players are those in the digital realm and they are the most profitable because customers prefer online shopping to physical stores. In fact, customers make 51 percent of all purchases online.
Through partnership with ISVs, software providers can offer retailers solutions to rising costs. They can also help them thrive in a digital market by improving the customer experience. Software providers can expand their offering with ISV support, making them a much more vital crutch to retail customers.
Here are a few examples of what an ISV partner can offer your business and your retail customers.
Retailers want software that works faster and cheaper than their competition. LiveTiles is an app that allows you to build a digital workplace quickly and easily. It lets you drag and drop 'tiles' around your screen so you have access to everything you need. Whether it's your calendar, Yammer or Outlook email, it's all on one integrated site. Installed as an app, their main products are LiveTiles SharePoint and LiveTiles Cloud.
LiveTiles target small business wanting enterprise-level capability without enterprise cost. Another potential target is businesses that own multiple brands. These customers can create workspace templates that each individual brand can emulate.
LiveTiles provide a unique way for retailers to remove cost, time and complexity barriers for customers through effective use of Azure and Office 365. Using this product, retailers can deliver their product or service to customers faster and easier than ever before.
Watch Lee Ralph, EMEA Vice President of LiveTiles, explain how to save money using their products.
Administration and paperwork are unfortunate realities of business. We can't avoid it, but it is possible to make it easier while reducing costs. TAAP takes existing paperwork from businesses worldwide and digitises it. All paperwork can be quickly converted into a mobile app that runs on Azure, but it also works natively offline.
The benefit to retailer's is that it's cheaper to go digital than it is to stay print-based. Also, having everything in a digital format makes it easier to analyse data. TAAP's speedy, low cost model provides return on investment within weeks of deployment.
Watch Clive Fearn, Global Sales Director at TAAP, show how they drive people towards digitisation faster than ever before.
Customer engagement is vital for retailers wanting to maintain their competitive edge. TokyWoky allows online retailers to build community chat which helps hesitant shoppers in real time. With traditional live chat, customers speak to an employee of the company - someone paid to maintain the company line.
With TokyWoky, customers can speak frankly and honestly to other customers about the best solution to their problem. In fact, this community chat helps ten times more hesitant shoppers than a classic live chat.
TokyWoky brings value to retailers by increasing brand loyalty cultivated through customer engagement. It is also easier to maintain a culture of continuous improvement by listening to what their ambassadors have to say about the customer experience. As an added benefit, online SEO receives a boost as the community creates user-generated content.
Watch Timothée Deschamps, Co-Founder of TokyWoky, explain how their product puts community at the heart of the sales process.
Setting up shop with an ISV leads to business growth
Retailers need increasingly unique and effective IT solutions to stay ahead in a competitive market. By partnering with ISVs, you can bring your collective expertise to the forefront and provide more for the retail market. Through ISV partnership, you can grow your business by showing retailers how to reduce their costs while increasing their customer engagement. Help them buy in to digital, and they'll buy in to you.