UK MARKET HIGHLIGHTS – JULY 2018

Trends News 2 1 - UK MARKET HIGHLIGHTS – JULY 2018

UK MARKET HIGHLIGHTS – JULY 2018

Every month B.D.C. gives you the key retail information you should not have missed. Key trends, innovation, major players, startups, market figures – discover in 60 seconds the latest key retail news.

 

MARKET HIGHLIGHTS

 

  • According to a British Retail Consortium (BRC) and KPMG study, despite the on-going challenges it faces, Britain’s high street has seen its sales risen by 2.3% in June, better than the 2% increase same month last year. British retailers have benefited from World Cup fever and a continuing warm weather. In particular, both have boosted groceries sales such as barbecue and beers sales as well as TV screens’.
  • Regarding UK online sales, it’s worth noticing an on-going increase of 8.5% last JuneWith a market size of £158 billion, the United Kingdom remains the biggest E-commerce market in Europe, ahead of France and Germany. In addition, British online retailers have experienced the “Amazon effect” around Prime Day. The event has put shoppers in a buying mindset and makes them turn to alternative e-tailers, sometimes launching their own shopping events, especially when they are not Prime members.
  • However we might question what will be the long-term effect of this non-essential purchases trend that have been boosted by the overall atmosphere (Prime Day, weather, football, royal wedding…). Barclaycard reports that one Brit out of 3  have spent more than usual this summer. This could result in a slowdown for future sales in the next months, as 4 in 10 customers think they will hold off purchasing high-value items.

 

KEY PLAYERS

 

  • Marks and Spencer and Microsoft announced a strategic partnership to explore how artificial intelligence (AI) can be used within the retailer environment to transform customer experience and services in-store and optimize operations. This takes part of the M&S’s five-year turnaround plan launched in November 2017. It also includes a restructure of the customer and digital teams, new leadership teams and an acceleration of the store estate closure programme.
  • In this regard, M&S’s chairman and CEO both hinted there could be even more store closures, as part of the plan to reduce costs by £350 million by 2021. This had left workers in shock as they heard the news on media. More recently this week, according to documents seen by the Guardian, M&S is proposing 351 job cuts across manager roles. Indeed, while sales activity has fallen by 7,5% over the past two years, management costs had risen.
  • John Lewis announced the radical revamp of 15 of its stores, turning them into “pilot stores” from September. The new stores will offer events, classes, personal stylists and concierge services. Its Oxford Street flagship for instance will host a pop-up cinema and have a rooftop bar. The news comes just after the retailer unveiled its biggest-ever investment in fashion. It aims to grow a £500 million own-brand fashion business. Thus, a new collection of 300 designs will be created in-house by John Lewis & Partner design studio team. Doing so, the department store hopes to position itself as a leading fashion retailer.

 

INNOVATION

 

Responding to changing payment behavior among customers, Tesco is trialing a checkout-free payment app to scan and pay for their groceries and then leave the store. Meanwhile, a research from Equifax revealed that 37% of British consumers think that their country will become cashless within ten years. Yet, over a quarter of respondents still don’t feel confident paying via websites or contactless. Retailers need to investigate more payment solutions and step up their effort in terms of data security.

In May, Zara stepped up its digital transformation and installed a self check-out area in its brand new flagship in Westfield Stratford.

 

 

 

 

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