The perfect storm I’m referring to is the continued challenges for retailers on the high street and businesses in the extended supply chain. Toys R Us and Maplin both went into administration. New Look is re-structuring and are about to slash 980 jobs and close 60 stores. Restaurants are also struggling, Prezzo the Italian chain has announced the closure of 94 restaurants. Jamie Oliver’s Italian chain is also struggling plus he’s closed his 2 flagship steak restaurants in London. Carpetright announced a profit warning last week and are in negotiation with their bank. Mothercare and Laura Ashley also recently announced profit warnings.

Who will be next?

This news can only further undermine consumer’s and business owner’s confidence. We all know there’s a huge challenge for traditional retailers from the internet, with many of the online sellers seeing double-digit growth. But to compound issues are we now seeing lack of consumer confidence creating strong headwinds for many businesses in the UK? Any further dents in confidence could result in delays in investment and consumer’s desire to spend on anything beyond the basics.

Then to add to these external forces, we’re seeing costs and expenses increase across our businesses. Whether its business rates, insurance, inflation (3%), wage growth partly due to the tight job market, which then undermines our profitability. Plus our employees along with us business owners have auto-enrolment pension increases to deal with, raw material, fuel costs, food and imported products price increases which are putting more pressure on our purses, wallets and reducing any margins and therefore surpluses in our bank accounts.

The current prediction is we are also likely to have an interest rate rise in the UK in May as the Bank of England try to stem inflation!

All of these market factors are also currently causing volatile currency and financial markets.

Potentially creating a “perfect storm”

So is it time to batten down the hatches or time to get out there and do something different to mitigate any risks?

Well one quote which has always stuck with me is;

"The greatest danger in times of turbulence is not the turbulence itself, it is to act with yesterday’s logic" – Peter Drucker (1974)

At Business Doctors we don't pretend to have all the answers, but we can help you to understand the market drivers and key factors driving your customer’s behaviours and help you come up with a plan. So why not contact us for a free no obligation chat .

Please read on; below are some tips and ideas which you could implement to help mitigate any risks to the challenges from the internet, your competitors or a potential downturn in trading.

Bricks vs clicks
The biggest trend and ever-increasing challenge for many retailers is non-retail store sales, i.e. the switch to online buying. Average weekly spend by UK customers online is now £1.175 million and has increased by 9.1% year on year. The ratio of all retail sales spent online is now 16.5%. January’s 2018 online sales were up a startling 19.2% on 2017. This should be sounding the alarm bells for bricks and mortar retailers. For further information link to ONS website

How does my business adapt to these changes?

First and foremost, you need to have an online strategy. Online is where the growth potential and action is. But don't shut the doors to your shop just yet, as it’s all about having a multi-pronged approach, the new buzzword in retail is Omni-Channel Marketing. You can start by integrating your online and offline marketing activities; using social media to attract and increase footfall to your store, combined with offering your product and wares through an e-commerce website that will open your products up to new markets in different areas of the country/continent/world.

Once you've attracted the customer into your shop, you need to enhance and add value to the customer experience to stay ahead of the competition. You need to capitalise on the fact that that customer has chosen to spend time in your premises, encourage them to buy from you and discourage them from spending their cash with your online competitors. Technology is the consumer's friend ; there are now apps available in which you can take a picture of an item and you'll then be advised where you can buy it cheaper locally or online. By adding value to your customer's experience in your store, you will discourage this sort of 'shopping around' behaviour that could be damaging to your business.

So, how do you add value? Well, consider, the décor, does it need a facelift? your branding, store layout and the 'customer journey' in store. Pay attention to where shoppers travel in your shop. What catches their attention? Are there any areas that fewer people visit? Why might that be? Can you place any low price/high profit items at queueing points for the customer to make impulse purchases while they wait? All pretty basic stuff but it's about spending time trying and testing different layouts and displays and monitoring the success of each layout change. Think about the bigger chains; they have spent A LOT of time figuring out how best to capture a customer's attention in store. We all nip in for one item and come out with an arm full!

Shopping in a bricks and mortar store has one unique feature you don’t have online: human beings like to interact with each other. Digital engineers are doing their best to replicate this human interaction on line by utilising live chat bots and humanised search engines and so-called 'personalisation' strategies are only going to gain momentum over the coming years. So, ensure your staff in-store deliver high quality service levels to help the customers buy; surviving in a retail business is not about heavy discounting and the hard sell. It’s about offering a great shopping experience. Do you currently "meet and greet" and help the customer to buy?

New technology vs traditional values Okay, so you've got the gist that I'm issuing a health warning to bricks and mortar retailers to embrace digital technologies? Good. Embracing digital, however, doesn't mean that you have to forego your long-held traditional values of good value and friendly customer service. It simply means that to achieve success (and, indeed, survival), retailers need to use technology to make it easier for your customers to buy your products. You might consider self-service checkouts, online click and collect in store service, in-store click and buy/order touch screens, product video displays or interactive kiosks.

VR, AI, AR... eh?
So, you've embraced some simple digital technologies into your business and they're proving to work. You're a digital convert and you want to step your technology up a gear. What's on the horizon...?

Virtual Reality (VR): those weird headsets. Did you know that you can now specify your own Audi and test drive it without sitting in the car via VR? Audi hopes this will increase footfall to their showrooms just for this novel experience. The benefit to the dealers? They will carry less stock, so will need smaller retail outlets and attract a younger audience that now expects to use digital tech at every touchpoint. Keep an eye for VR car dealerships springing up on your local high street!

Augmented Reality (AR): real world environments are augmented (overlaid) by computer generated sound, video and graphics. The most (in) famous example of AR is the recent Pokemon app, which saw teens wandering around town and countryside searching for characters that would appear on their phone screens against a real background filmed with the phone's camera. (I'm informed by my daughter that we had a Pokemon hiding in our kitchen, which made our kitchen very popular with teenagers for a while.) Applying AR tech to retailing, Wayfair, the American furniture retailer, is piloting this technology using Google Tango software to show customers how their furniture might look in your home or office before buying.

Artificial Intelligence (AI): intelligent machines. AI is being used in-store to enhance the shopping experience by introducing concepts such as the artificial store assistants used by Macy’s and Sears in the US. AI will be the real game changer and eventually, this technology will become so advanced that many stores in the future will not have checkouts and you’ll just walk in, pick up your chosen products and leave; no queuing and no cash transactions! Amazon are leading the digital march with their latest AI product, Alexa, and have already registered Amazon Go in many markets "A new kind of store featuring the world's most advanced shopping technology. No lines, no checkout – just grab and go!" and piloting the concept in Seattle. Amazon has also moved into the food retailing business with the recent purchase of Wholefoods, moving into the bricks and mortar retailing market and with plans to open 2,000 Amazon Go stores across the US in the next few years. Won't be long before they are here in the UK!

In conclusion, as a retailer, you should regularly review your operation from the customers' perspective and ask yourself, "What could we do to enhance the customers buying experience?” Don't view digital technology as a stand-alone hurdle, but utilise it to your customers' advantage to provide them with what they want. Remember that many of your current customers and future customers will have been born between the 1980s and 2000s (known as Millennials) and have been brought up surrounded with computers and technology (digital 'natives'), so you'll need embrace it or risk being left behind! A report released last week highlights this point, gaming sales are up 15% YoY a whopping £5bn in total sales in the last year.

“By changing nothing, nothing changes.” - Tony Robbins

Want to learn more?
Business Economic Update with Bank of England: Thursday 15th March, 8.00am to 9.30am, Crown & Mitre Hotel , This is a partnered event with Moynan Smith and BoE.

If you are looking to grow your business, Business Doctors Cumbria offer a free business health check where we can help you to set a clear vision to understand the key steps you need to take to fulfil your aspirations.

Contact Peter Fleming by phone on 0845 163 1490 or 07966 686112 , or by email on , or visit the Business Doctors website .

Click here to book your free Business Health Check.
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