With the changing face of the UK retail industry, what internal resource do retailers have to meet the new world order?
Goods and services are not what they used to be. They are now not so much about what they do, rather they are more about how they make you feel. In a materialistic world, it is argued that consumers are looking more for instant gratification and the way a product makes them feel, rather than its taste, function or usefulness. Are retailers merely catering for consumersâ needs instead of offering things of greater value?
Other challenges retailers are facing include the dramatic surge in online shopping by consumers – Recent research for uSwitch predicts that UK online shopping could quadruple and account for c.40% of retail sales by 2020. Figures predict that growth in 2007 will produce an extra Â£4bn through online shopping and retailers who ignore this channel do so at their peril.
The retail industry relies heavily on external companies to provide outsourced support solutions which help them improve both the shopping experience and environment for consumers. These companies provide services such as merchandising (the most prevalent), reverse logistics, shopfitting and installations, and project management systems.
Recruit Retail Services (RRS), a leading player in this market, commissioned B2B International to undertake a needs awareness study, to understand what challenges and problems retailers are currently experiencing and how they can best meet the needs of retailers in the future.
Challenges Facing the Market
Retailers stated that they are under pressure to continually innovate and are facing ever-more difficult challenges including strong competition, fickle and price-conscious customers, justifying the costs of store development and finding appropriate âqualityâ suppliers.
Research shows that the main issues concern product turnaround, store development, consumer behaviour, store layout and display. Challenges from a business viewpoint include the decreasing importance of manufacturersâ brands as they are replaced by own brand products, competition and the ever-present financial pressure of budgets and the continual focus on financial returns.
Using External Suppliers
The use of suppliers is widespread, with nearly everyone using them for something or other! The bulk of the outsourced work is for expertise that isnât available in-house. In general, retailers look to commission various specialists rather than a âone-stop shopâ.
Experience, rather than cost, is a key driver in the decision-making process, with retailers looking for previous experience within their sectors or with similar companies. Great importance is placed upon a tried and trusted list of suppliers â the people and the relationship being key influencers.
B2B director Nick Hague, in charge of this study, says their findings indicated future trends:
âRetailers felt that technology and environmental issues will drive changes in the next five years. There will be a need for greater in-store design and innovation, especially to counteract the increase in internet shopping and revitalise footfall back to the stores. Other pressures include the increasing likelihood of economic slowdown, and we cannot forget the impact of the Olympics, which is both an opportunity and a threat by draining project staff and resources.â?
In order to meet retailersâ ever-increasing expectations and needs, Recruit Retail Services provides a wide range of services including merchandising, reverse logistics, shop fitting and installations plus project management solutions. The research showed that Recruit Retail Services are viewed very positively in the marketplace with their strengths being cited as flexibility, staff skills, functionality, a caring attitude, approachabilty, honesty, being team players, proactivity and responsiveness, supportiveness and reliabilty.