Industry titans gathered at the Association of Convenience Stores’ (ACS) conference last week to discuss how retailers can future-proof their businesses.
Technology is central to the future of retail, but it cannot come at the cost of the personal touch, retail analyst and author Natalie Berg told attendees.
She stated that despite the surge in online shopping during covid, there had been a clear deceleration in online sales growth post pandemic. She said that one of the big learnings over the past 12 months was that consumers missed “the real world” and “going to the shops”.
This belief was shared by Lisa Hooker, retail, consumer and leisure leader at PricewaterhouseCoopers, who told attendees: “Shops are still important to our nation and people value the experience of being able to go into a physical store.”
Berg added that “time has become our most precious commodity” and that technology was key to meeting this need.
“During the pandemic especially, we saw a real race to offer the most frictionless customer experience, everything from the explosion in contactless payment to scan and go, to check out free stores.”
She claimed that over a quarter of Amazon purchases take place in three minutes or less, adding “it’s the sheer effortlessness of shopping on Amazon’s platform that makes people loyal”.
However, she predicted that Amazon would find itself “disrupted” in the coming years because it was failing to connect with consumers on a personal level. “It’s transactional loyalty, not emotional loyalty,” she said.
While she urged retailers to embrace digital, she also highlighted the importance of creating an experience. “Customer experience is becoming the new battleground in retail. I don’t just mean identifying and ripping out points of friction in the store experience, but really going beyond, continuously surprising and delighting your shoppers, rolling out the red carpet for them and continuing to disrupt the status quo.”
One Stop’s managing director Sarah Lawler also urged retailers to concentrate on the shopper experience, noting that there was no one size fits all approach. “Some customers do want to be served by tech - some want to be in and out; others want to be served by colleagues and that’s fine too.” She encouraged retailers to invest in technology that saved time for both customers and colleagues.
Retail managing director at Booker Colm Johnson flagged up electronic shelf edge labelling as a worthwhile investment. “Yes, they’re a big oncost, but for those retailers that put it in, they’re probably saving up to 10 hours a week,” he noted. He also stated that self service tills could help boost productivity, while beer caves drove a point of difference in-store in addition to making significant energy savings.
CJ Lang chief executive officer Colin McLean, stated that differentiation was crucial and warned retailers not to become overwhelmed when analysing the competition. “Focus on what you can do - you can get easily sidetracked. As we’ve seen with Amazon, you can be top of your league and lose it quite quickly.”
Parfetts joint managing director Guy Swindell claimed that the individuality of each retailer was what fuelled their store’s success. “The retailer is at the heart and soul of it,” he said.
Nisa Retail managing director Peter Batt told retailers to consider the long-term impact of their decisions, to make sure they didn’t make “bad tactical interventions”.
He said: “Understand who the shopper of the future is, what they’ll be purchasing. Don’t make decisions for today - make them for the next five years.”
Morrisons wholesale director Paul Dobson advised retailers to adopt a culture of constant evolution. “If you think about future proofing as a concept - it’s really a muscle, an ongoing habit of constant improvement,” he said. “You can do it bit by bit. If you see it as one big project with one big price tag it can be quite daunting. It’s about really having that mindset of constant improvement to stay ahead.”
Berg said: “If you can’t stand out from the competition then you don’t stand a chance because what we are seeing is retail Darwinism. It really is a case of evolve or die. You need to deliver an experience worth ditching your screen for … Stores must be seamless, not soulless.”