According to the latest BRC-KPMG Retail Sales Monitor, retail sales have taken a record hit, possibly the biggest decline seen in 24 years. A major contributing factor for this decline is seen as lack of technology adoption by retailers or a major dilemma to leverage it correctly.
Here are a few quick stats that pinpoint the drop in sales numbers
- Like-for-like sales declined by 3% when compared to the same period last year
- Non-food sales total and like-for-like declined by 2.7 percent – non-food retail sales declined by 1.1% for the same
- In totality, sales saw a drop by 2.7% in a four-week period that ended on May 25. Last year during the same period, retail sales had grown by 4.1 percent.
On the other hand, food items saw an increase. So did e-commerce. So why is there a decline only in the non-food, physical store, retail sector?
Here are some thoughts from industry insiders-
“With the biggest decline in retail sales on record, the risk of further job losses and store closures will only increase,” BRC chief executive Helen Dickinson said. May 2019 delivered political and economic uncertainty. Food sales dropped for the first time since June 2016, with further declines in clothing, footwear, and outdoor goods. With retail conditions the toughest they have been for a decade, politicians must act to support the successful reinvention of our high streets and local communities. Business rates remain a barrier, preventing many retailers from investing in their physical space. We have a broken tax system, which sees retailers paying vast sums of money regardless of whether they make a penny at the till, and yet the government is failing to act. The legislation is falling behind the technological revolution.”
Institute of Customer Service chief executive Joanna Causon said: “May’s poor retail sales are a stark wake – up call for brands, in particular within the context of the growth in consumer confidence seen last month. For some organizations, the next six months will mean the difference between staying in business or joining the growing list of retailers closing stores or closing doors forever. There will always be a need for us to buy things, but as consumers, we are prioritizing and spending far more than we used to. In an environment where customer behavior is rapidly changing and loyalty is hard won and easily lost, any mistakes in that customer experience will result at the end of that relationship. Although tempting to hold back in this volatile landscape, now is the time to invest in initiatives that will provide the best end-to-end customer experience, putting service at the heart of the business strategy, before it’s too late.”
With a changing business landscape, retailers who operate via physical stores need a rapid transformation. These businesses need to seriously think about integrating cutting edge Artificial Intelligence and Robotic Process Automation (RPA) into the core of their operations.
We spoke to Bruno Ferreira, Vice President for UK & Ireland, UiPath for his commentary on the UK’s brick-and-mortar retail situation and he said that, “It isn’t new news that the retail sector is having to ‘adapt or die’, but the retailers that adapt most rapidly, are the ones that are going to be able to stay the course and come out ahead. The main enabler, and differentiator, during this period of change, will be the quick adoption of effective technology solutions. Technology like Robotic Process Automation (RPA), is easily integrated to work alongside legacy systems and will allow retailers to harness the power of fast and highly efficient software robots. RPA is one form of technology that can deliver benefits at all points of the retail journey – from supply chain with software robots making judgments and analysis based on data patterns to back office (e.g. invoice processing or onboarding and offboarding seasonal employees) and end-user experience (in the call centers where every agent can benefit from a software robot’s support) . Working alongside humans to deliver tangible business efficiencies and superior customer service, RPA is just one technology that retailers should be looking to take advantage of now. The winners in today’s retail sector will be those that choose not to be weighed down by legacy systems and recognize how much benefit technology can deliver to their businesses.”
Read More: The Artificial Intelligence Week