Retail – The Disruption, The Shift and The Rise of Digital - KBS

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Retail – The Disruption, The Shift and The Rise of Digital

More change has occurred within the retail industry in the last decade than in the previous century. The successive waves of disruption have permanently altered much of the retail landscape, with the rise of digital, the shift to online, evolving consumer values, a global pandemic, and geopolitical tensions all forcing changes in ways that were previously unthinkable.

Now that retailers have adapted and opted for a more immersive online customer experience, there are, of course, more challenges to face and a reshuffle of priorities to address.

Cyber and data breaches for an eCommerce business can be detrimental. Ensuring a robust IT infrastructure plays a vital part – prevention is better than a cure.

Combating inflation and cost pressures by focusing on operating costs and scaling automation across the business.

Attracting ideal customers – Behavioural insights provide crucial insight! Gen-Z customers have contributed massively to the demand for less physical interaction and a more unique virtual journey when shopping online. Having the data to demonstrate how your customer’s shop will give your business the advantage.

Customer loyalty. Once you have attracted your ideal customer, as a retailer, you want to ensure they remain loyal. It’s a highly competitive marketplace so offering customer loyalty schemes, optimal customer service and positioning your brand as a friendly, customer-facing one gives the customer the optimal experience.

Competitor analysis – Just as you want to know how your customers behave, it is important to understand what your competitors are up to. How do you fair up against them? Knowing your competition means you can have a clear understanding of where you can improve and what you are already doing well.

Brand and retailer collaborations. This is a trend that has worked well for lots of the larger retailers. The likes of luxury designer brand Valentino and Chinese eCommerce monolith Alibaba collaborated to host a one-off 3D pop-up shop in Beijing. Walmart and Buzzfeed’s Tasty partnered to produce shoppable ‘Tasty’ recipes to drive traffic to Walmart’s eCommerce website. Adidas and Peloton collaborated to produce a new clothing line that was designed to bring both brands together and launched during the pandemic (perfect timing) for those doing home workouts.

Conscious consumerism is now a huge sticking point for shoppers more than ever. Customers have developed conscious behavioural patterns and want to ensure that their purchases have a positive social, economic, and environmental impact. Natural, organic, unmodified products are more sought after than ever.

M&A activity and Predictions

KBS Corporate very recently oversaw the sale of Hervia Bazaar, a designer clothing store in Manchester, to Parabellum Investments.

Other notable deals within the sector include Reliance Retail and Apollo making formal offers for Walgreens-owned Boots; a deal that would allow Walgreens to train a significant minority stake (although the ongoing cost-of-living crisis is rumoured to be spooking the acquirers), Frasers Group acquired online retailer Misguided out of administration and Moonpig are rumoured to be acquiring Buyagift for £124m to expand its giftware offering as part of their ongoing strategy.

As the retail landscape continues to revolutionise into a more digital one, landlords are becoming more innovative in the use of their space.   One possible result of this innovative, pop-up shops could be an attractive lifeline for independent retailers; creating a healthy and relevant shopping experience to the communities they serve which will no doubt drive sustainable levels of high street footfall.

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