Kirsty Cooper, global business unit manager at CJ Retail Solutions Global, looks at what’s in store for retailers after Brexit.
Nobody knows what the post-Brexit landscape will look like, but the beauty of retail is that it is dynamic and continually evolving. As long as brands are prepared to innovate, and most importantly, listen to their customers, I’m confident they can navigate any difficulties with success.
Last year’s decline in high street footfall and sales is a clear sign retailers must work harder than ever to reach customers.
Products alone are not enough to drive people into store, especially if comparable goods can easily be bought elsewhere. Investment should instead focus on inspiring people to interact with the brand at an emotional level. This is, after all, the most effective way of building loyalty, which ultimately translates into spend.
When inflation hit a five-year high of 3.1 per cent in November last year, many householders saw their budgets squeezed even further, leaving little disposable income for shopping or home improvement. But it looks like this pressure could now be easing after the consumer price index fell to three per cent in January.
We’ve yet to see what impact the ongoing Brexit negotiations will have on inflation this year, which is why retailers need to engage with customers in a way they have never done before. They must be sensitive to the fact that people may have less money, though that’s not to say they should simply slash their prices and operate at a loss for 12 months. Again, it’s about offering valuable experiences that encourage people to spend at a particular store, rather than choose a competitor.
I wouldn’t go as far as to say retailers need to be nervous in 2018, but I would expect them to be on high alert. While nothing is certain, a change is certainly coming and every brand, from established household names to luxury stores, should be proactive in seeking new opportunities and responsive to shifting demands.