An End to ‘Thought It, Bought It’ – Evolving Retail for the 2020s

A paper arguing that the values currently underpinning business operations will prevent UK retailers from maintaining their global leader reputation

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The UK has long been regarded globally as a leader in retail. British products have a reputation for quality and style and the ecommerce market is one that many foreign retailers look to as an indication of how their market may evolve over the coming years.

And yet the UK retail market may seem like an odd object of envy at present. The downturn on the high street has been building toward a crisis for many years and over the past two years the pressure has intensified to the point where even the largest and most established retail brands seem to be struggling for growth and, crucially, a new identity.

As for ecommerce, which has for so long enjoyed consistently-strong growth even while traditional retail faltered, the trading climate has become fraught. Discounting is endemic, heavy and sustained; high return rates are hitting profits; shopper confidence appears low. These problems did not happen overnight, they have gathered force over time. What’s more, it’s difficult to see any genuine solutions – either short- or long-term – on the horizon.

A simple matter of confidence?

The times are also, arguably, unprecedented. There is the Brexit impasse that has stifled innovation and investment, a volatile currency, continuing austerity, environmental pressures (which are profound currently in retail), a perceived imbalance in business rates between online and offline, changes to customer behaviour bought about by rapidly-advancing technology…

Some of these pressures will, of course, pass and these current issues won’t remain the same forever. If, unlikely as this may seem, Brexit was suddenly solved in a way that proved universally very advantageous to British business, austerity ended and shopper confidence restored, growth may return and, with it, a sense of ‘back to business as usual’.

Even getting halfway toward that would probably bring about improvements in retailers’ fortunes, but the trading environment is always prone to ups and downs. A sudden improvement in the economic and political situation would still probably only provide temporary respite for retailers, as it would not have addressed the core issue here head on – the fact that we have 20th century infrastructure and values serving 21st century technology. Continuing to take that approach prevents those elements from working together efficiently in tandem; hence the problems we see in retail today, particularly on the high street.

Obviously, that technology can be integrated over time and will probably lead to improvements in operational efficiency and customer experience. But; it will always be flawed because the way this technology is integrated is based so stringently around those 20th century values – which we might identify as being competition, consumer choice, privacy and opportunity – whereas the 21st century is defined by data, personalisation and AI. Those are not natural or logical matches; we could even suggest they are diametrically opposed. Any infrastructure that fails to acknowledge this shift and builds itself around those outdated principles will inevitably miss out on the key benefits digital technology can offer retailers and shoppers.

In short, we have tried to get digital to adapt to the way things have worked in the past. Common sense says we should be aiming for the reverse.

By failing to become a genuinely modern retail market, through resisting digital technology and the way it works, the UK will be at serious risk of losing its position as a leading retail nation over the coming decade.