Third of UK retailers expect Brexit to have a negative impact on business
One-third of British retailers (32%) anticipate Britain’s exit from the European Union will have a negative impact on business, according to a survey of 100 senior executives at major UK retailers operating in the fashion, luxury, sports, homeware, consumer electronics and DIY sectors
The report by VoucherCodes, analysing attitudes towards the changing face of the retail industry, also finds that just 4% of retailers have confidence in British retail following the result of the EU referendum.
With this lack of confidence in mind, VoucherCodes said it is not a surprise that two-thirds of retailers (64%) confessed their biggest concern about the future of the industry was its unpredictability. Retailers cannot predict the direction the industry will lead post-Brexit, creating concerns over investment and wider strategy to be able to succeed in an unknown environment. In fact, this feeling of ambiguity spurred by Brexit pervades the way retailers feel about the future across the board.
In addition to the uncertainty around the macro-economic situation, 57% of retailers also felt they lacked sufficient knowledge of the technology required in order to stay ahead of the game. A further 54% said they were concerned about falling behind in a market where constant change is the only consistency.
What’s more, the report reveals an overwhelming majority of UK retailers (90%) said it is impossible to predict what skills will be needed in the industry in five years’ time, whilst 7 in 10 predict that customers will be shopping in an entirely different and unforeseen way.
Also amongst retailers’ growing concerns is increased competition from overseas retailers – a direct implication of the Brexit vote. Over half of retailers (51%) predict competition from overseas retailers will increase within the next 12 months, particularly from online-only players nimble enough to strip market share whilst the pound is low, and see this as a major challenge their businesses will need to face head on.
The report want on to say that political uncertainty in this capricious industry has encouraged retailers to focus on investment and adaptability in order to future-proof their businesses. In terms of investments, it appears mobile is still king. In fact, mobile commerce remains one of the few areas retailers are confident will remain stable, with 100% of all retailers surveyed believing the UK’s mobile retail presence will be even stronger by 2022.
In order to prepare, more than a quarter (26%) of UK retailers will be investing heavily in their mobile presence over the next 12 months, whilst almost one-third (31%) plan to redesign their online presence, including mobile e-commerce sites and social channels.
More generally, an overwhelming majority of UK retailers (99%) have considered new technology investment as part of their business strategies during the next year, showing confidence in digital investments across the board.
However, there is also an increased focus on utilising technology to close the loop between in-store and online. One-fifth of retailers (19%) are planning to focus more attention and investment on bringing tech into the physical store, for example supplying bricks and mortar staff with iPads on the shop floor for customers to utilise.
Paul Lewis, Senior Director of Marketing at VoucherCodes said: “The watchword for the next 12 months or so is ‘uncertainty’. Retailers will obviously continue to keep one wary eye on the ongoing Brexit negotiations in Brussels, and another on the fluctuating pound. However, the UK retail market has strong foundations as one of the largest eCommerce markets in Europe so, whilst the future is indeed uncertain, it is important for businesses not to get caught up in this.
“No one can predict the direction the industry is heading post-Brexit, so retailers must future-proof their businesses by focusing on areas of investment and adaptability where customer demand is high.
“Smart retailers will be mindful of the changing industry whilst simultaneously focusing on the opportunities they can see on the horizon in order to keep up with customer demand – investing in new technology to revamp online platforms, as well as technology to invigorate physical stores, turning them into powerful brand differentiators in their own right.”