The boom in online shopping during the coronavirus pandemic has seen more than one in seven UK retailers (15%) create roles specifically to cater to an increase in digital sales and boost online capacity, according to a study of over 300 senior retail executives conducted by Barclays Corporate Banking.
With £3 in every £10 now spent online investment in new technology is a central theme in Barclays Corporate Banking’s new white paper: Survive and thrive: how the UK’s retailers are adapting to the ‘new normal’. Over a quarter (26%) of those surveyed think the pandemic has accelerated a ‘technological revolution’ in retail.
The UK is the world’s third largest market for e-commerce, and a substantial number of businesses have invested even further in technology under lockdown. A third (33%) of retailers have had website upgrades, 32% have started to accept new payment methods and one in four (26%) have embraced data analytics for the first time.
Additionally, to help reduce queues in-store, nearly a quarter of retailers (24%) have started offering ‘click and collect’ options, with home improvement / DIY retailers (40%) most likely to have introduced this during lockdown.
The home improvement category is also the most confident of growth in the short-term, with four fifths (80%) positive about revenue growth in the next three months. This compares to an industry average of 60%.
Longer term, confidence grows even stronger, with 94% of retail industry bosses optimistic about growth opportunities in the next year – a figure that peaks among large supermarket brands at 97%.
Karen Johnson, Head of Retail and Wholesale for Barclays Corporate Banking, said:
“The last few months have undoubtedly been challenging for the sector, and we are hearing frequent news of jobs being put at risk.
“Against that backdrop, however, e-commerce and digital sales have demonstrated significant improvement and have helped to maintain year-on-year growth for many businesses. Despite the unprecedented uncertainty and disruption, the results of our survey are encouraging, and it is great to see retail leaders confident about their prospects. Many are using the ‘new normal’ to innovate and adapt their business models.”
Another emerging development is the shift towards a more localised retail model. Just under two fifths (39%) of Barclays’ research respondents experienced supply chain disruption during lockdown, and over a quarter (27%) are moving to suppliers based closer by as a result. Home improvement / DIY firms (53%) are most likely to do this.
In addition, almost three in ten retail businesses (28%) plan to do more to support local communities, while a fifth (20%) believe the future of retail is in local high streets rather than city centres. With homeworking set to continue for many people, in parallel with concern about public transport and busy shopping areas, our research shows a move towards more localised business operations. For example, one in seven (15%) retail businesses plan to reduce the number of physical stores they have in urban areas close to office buildings within the next year. Health and beauty retailers (28%), supermarkets (19%) and food and drink retailers (18%) are most likely to do so in the next 12 months. We could also see the number of urban outlets fall further in the longer term, with one in five of respondents (20%) telling us they see the future of the physical retail industry on local high streets rather than in city centres.