The boom in online shopping during the coronavirus pandemic has seen more than one in seven UK retailers (15 per cent) create roles specifically to cater to an increase in digital sales and boost online capacity, according to a study of over 300 senior retail executives conducted by Barclays Corporate Banking.
With £3 in every £10 now spent online, investment in new technology is a central theme in Barclays Corporate Banking’s new white paper: Survive and thrive: how the UK’s retailers are adapting to the ‘new normal’. Over a quarter (26 per cent) of those surveyed think the pandemic has accelerated a ‘technological revolution’ in retail.
The UK is the world’s third largest market for eCommerce, and a substantial number of businesses have invested even further in technology under lockdown. A third (33 per cent) of retailers have had website upgrades, 32 per cent have started to accept new payment methods and one in four (26 per cent) have embraced data analytics for the first time.
Additionally, to help reduce queues in-store, nearly a quarter of retailers (24 per cent) have started offering ‘click and collect’ options, with home improvement/DIY retailers (40 per cent) most likely to have introduced this during lockdown.
The home improvement category is also the most confident of growth in the short-term, with four fifths (80 per cent) positive about revenue growth in the next three months. This compares to an industry average of 60 per cent.
Longer term, confidence grows even stronger, with 94 per cent of retail sector bosses optimistic about growth opportunities in the next year – a figure that peaks among large supermarket brands at 97 per cent.
Karen Johnson, head of retail and wholesale for Barclays Corporate Banking, said: “The last few months have undoubtedly been challenging for the sector, and we are hearing frequent news of jobs being put at risk.
“Against that backdrop, however, eCommerce and digital sales have demonstrated significant improvement and have helped to maintain year-on-year growth for many businesses. Despite the unprecedented uncertainty and disruption, the results of our survey are encouraging, and it is great to see retail leaders confident about their prospects. Many are using the ‘new normal’ to innovate and adapt their business models.”
Another emerging development is the shift towards a more localised retail model. Just under two fifths (39 per cent) of Barclays’ research respondents experienced supply chain disruption during lockdown, and over a quarter (27 per cent) are moving to suppliers based closer by as a result. Home improvement / DIY firms (53 per cent) are most likely to do this.
In addition, almost three in ten retail businesses (28 per cent) plan to do more to support local communities, while a fifth (20 per cent) believe the future of retail is in local high streets rather than city centres. With homeworking set to continue for many people, in parallel with concern about public transport and busy shopping areas, our research shows a move towards more localised business operations. For example, one in seven (15 per cent) retail businesses plan to reduce the number of physical stores they have in urban areas close to office buildings within the next year. Health and beauty retailers (28 per cent), supermarkets (19 per cent) and food and drink retailers (18 per cent) are most likely to do so in the next 12 months. We could also see the number of urban outlets fall further in the longer term, with one in five of respondents (20 per cent) telling us they see the future of the physical retail industry on local high streets rather than in city centres.
Debbie Robinson, CEO of Central England Co-operative, added: “During the COVID-19 pandemic, we have made significant and lasting business improvements, including our ability to be more inclusive and diverse by reaching more members and customers in ways that they need us to. We’ve made great progress as a team, especially our colleagues on the frontline, who have truly been a fourth emergency service and have played a vital role in the national effort to support communities.”
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