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Comment: What retail needs in 2012


We are out of the grasps of 2011 and are now charging into the Year of the Dragon.

This auspicious year filled with Olympics, Jubilee celebrations and the predicted end of the world will make for an interesting time on and off the high street. And yes, thank you for pointing out following my last column that I don’t know my Aztecs from my Mayans when it comes to doomsday predictions.

So on the basis that we probably will not be consumed in a global fireball, I have a few predictions for the challenges facing retail in the year to come.

First: internationalisation. People are getting increasingly connected. According to a survey by the International Telecommunications Union, at the end of 2011, 87 per cent of the people on the planet had mobile phones. Of these 5.9 billion people, almost 1.2 billion have mobile broadband. The internet is increasingly woven into our lives and some countries, like France, classify access to the internet as a human right.

We already have the European Consumer Rights Directive] that is obliging UK e-tailers to accept the reality of operating in a bigger marketplace.

And that trend is only going to continue. As the world gets smaller, choice is increased and consumers will increasingly look further afield for the best deals.

Secondly: Sales. The January sales used to start in January. Now January also means December, November, October even September. It is not just the retailers either - everyone is jumping on the bandwagon. Banks, telecoms companies, and airlines are getting into the act. Even football teams are looking to flog deadwood in January!

What is going on? I think it’s time for retailers to go back to basics this year and offer just one or two key sales each year. We are running the risk of being in a constant state of sale, which is blurring credibility and dropping margins. Consumers are not stupid. They are going to keep credit cards in wallets if they think another sale is just around the corner.

It was encouraging to see that Next didn’t bow to pressure and did not fly the sales flag until after Christmas.

Thirdly: Innovation. Retailers need to invest in the consumer experience. The high street needs to be a fun and interesting place to spend time. Consumers are looking for something different. It’s about the service, innit!

I also predict that we are reaching a tipping point in consumer spending habits.

Take Next for example. The company’s positive Christmas trading was reliant on its internet sales. The Next Directory saw a sales increase of 16.9 per cent, while the sales in stores fell almost three per cent in the same period. I think this is indicative of what is to come, with retailers investing more heavily online and less on bricks and mortar. This is not going to do anything for the state of our town centres. How long will it be until online becomes the largest part of the retail economy?

And lastly on a personal note for 2012, I would really like Waitrose to launch a delivery service here in Jersey. I can guarantee that it would have at least one very happy customer!

Aaron Chatterley is CEO of health & beauty e-tailer

Published on Sunday 25 March by Editorial Assistant

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