Digital transformation in the retail sector brings opportunities and challenges.
Looking at how digital can transform the retail sector for both large and small organisations.
The digital transformation in the retail sector is both exciting and challenging. Exciting for us, the customers, who can now instantly access limitless products, check thousands of customer reviews, order any given products and arrange delivery to any location. But challenging for retailers trying to keep up with our behaviours and expectations.
The retail innovation landscape is particularly hard to navigate. Its ecosystem is a varied one: from large corporations to start ups and small businesses, from private investment organisations to academic research and government bodies, from suppliers to the end consumer.
Furthermore, innovation in retailing is not just what we see when shopping. It is about business processes, internal communication and defragmenting organisational silos, employee engagement, creative methods and much more.
Hence better knowledge transfer within the retail sector and between sectors of the industry is essential in driving successful innovation in retail and ensuring the UK remains a leader in this space. The Future Retail Working Group brings the different parties together in an open forum discussion to share the latest retail innovation initiatives and address some of the challenges.
As part of his work with the Future Retail Working Group, James Roper, Founder and Chairman of IMRG, published today The Retail Re-Imagined 2016 report on the Great British High Street Website which offers a view on how co-operation between impacted stakeholders is vital to optimise the next phase of retail innovation on the high street.
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The report highlights key statistics from the IMRG Index showing the fast pace of the digital transformation in retail. For example, E-retail had an 11% annual growth in 2015, representing 25% of all retail sales. The beginning of 2016 was the first time when the majority (51%) of UK online retail sales was made through mobile devices (smartphones and tablets), up 10% on the same period a year earlier.
The impact of this growth poses challenges for the high streets: the British Retail Consortium predicts that 1/3 of retail jobs will disappear in the next decade and that 47K of 270K stores will close. The consumer survey, conducted as part of the report shows that 78% of respondents shop both online and in-store. But while consumers are continuing to use high streets, a third of those surveyed were browsing only, eating out or socialising on their last high street visit.
Definitions and measurement currently used are inconsistent and do not reflect customers behaviour – “The physical and digital worlds are now so interwoven as to be inseparable, therefore to make sense of the new social and economic landscape we are entering, new omnichannel metrics are required”. To address this issue, IMRG has initiated an Omnichannel Retail Data Pathfinder programme to find new ways of defining ecommerce measurement standards. One of the intentions is that this will ensure the influence of high street browsing is taken into account while measuring online sales.
Within its final recommendation, James Roper argues that key stakeholders must agree, before planning any new initiative, on what a future successful high street looks like and indeed re-imagine its future.
If you would like to become part of the Future Retail Working Group, please contact Agata Samojlowicz at Innovate UK or Astrid Ayel at the KTN.
Astrid Ayel is the KTN’s Knowledge Transfer Manager for Digital Economy.