“Today’s physical stores either have no goods or no shoppers”
Online sales as a proportion of all retailing reached a record high of 22.3 percent in March 2020, as consumers switched to online purchasing following the pandemic, new figures from the ONS showed today.
The perhaps unsurprising rise — captured in ONS data that also revealed a number of other notable trends — also captures how much more scope there is to grow UK online retail as a proportion of sales overall.
It’s clearly early days for data-driven digital disruption in the retail sector, outside a limited number of high profile companies.
Sainsbury's CIO: "We're all-in on data… We knew we needed to democratise it, now we're really beginning to deliver value from data-driven decisions; it's night and day from where we used to be" #virtualCIOsymposium #bigdata #retail #DigitalTransformation
— Ed Targett (@CBREditor) April 23, 2020
(Sales of clothing items plunged 28.4 percent meanwhile, the ONS said, with customers ” appeared to be focusing on essential purchases to stockpile”. Supermarket stores saw a strong increase in volume sales at 10.3 percent, while alcohol store sales soared at 31.4 percent in volume terms.)
Bricks-and-mortar stores with a minimal or no online presence, needless to say, have suffered dramatically, although guidance abounds for how they can pivot, with it easier than ever to establish online retail platforms.
UK Online Retail: How to Grow Your Presence?
Startups that set up online (for example Snag Tights, a “size-inclusive” hosiery brand established in 2018 “with a website we created in the pub” and which is now driving $2 million in monthly turnover, say businesses need to strongly emphasise a building a brand that customers can feel a part of.
Snag, for example, only uses its customers as models and emphasises treating social channels as a community, rather than sales channel.
Alan Gibson, of self-service data analytics firm Alteryx, Inc., added in an emailed comment: “Retailers must shift their thinking and adopt a highly data-driven approach that allows them to move quickly with customer demand – even if it continues to fall in certain areas. Fast and actionable data insights are key to making informed decisions across the retail enterprise.
More Data Needed
“But, unfortunately, many organisations are still operating in a new, digital world with old practices – digging for these insights across a myriad of spreadsheets and accidentally hiding data sources… “Retailers must adopt analytics tools and practices that complement their teams.
“Accessible, code-free AI, which doesn’t require teams to understand algorithms, can remove the fear of adoption.”
It’s a view echoed by cloud data firm Talend‘s Jean-Michel Franco, who notes that such data can be used to underpin “dynamic demand planning, allowing the retailer to anticipate a surge in certain products as well as dynamic pricing to protect margins with a highly fluctuating demand.”
KPMG’s Rene Varder added in a blog this week: “Last year, everyone wanted to talk about ‘phygital’ retailing. No more. Today’s physical stores either have no goods or no shoppers. Retail and consumer brands – particularly those selling discretionary goods – will need to rethink their customer experience and find ways to deliver on customer preferences and needs through digital-only channels. Retailers reliant on traditional customer footfall to deliver their experience will be challenged to compete in this new world.”
Ed Whitehead, Managing Director EMEA, Signifyd, notes: “The current situation has also accelerated the adoption of certain technologies that reduce the need for human interaction, whether that is automated warehousing and stock picking, click and collect, including a surge in the use of drop boxes where stores are closed or the postal services have been disrupted.”
He warned that “orders need to be reviewed for signs of fraud and consumer abuse, such as false claims that an order never arrived at a customer’s home or indeed just friendly fraud – where the customer simply claims it wasn’t them making the order. Both of which we have seen a surge in.”