Friday 5: Retail evolution – five stats you need to know about the state of UK retail.

Welcome to this week’s instalment of our Friday 5 series, where we give you a round-up of themed news stories that have caught our attention.

This week we’re looking at all things retail – from store closures to opportunities for innovation and diversification. Take a look at what we’ve been reading this week… 

 

1.)  Half of shoppers believe QR codes are ‘the future of shopping’: research from our lovely client Outform shows that 50% of shoppers call QR codes ‘the future of shopping’, despite their relative scarcity pre-pandemic – and the fact that they have been around since 1994! 

Why should I care? 

Outform’s research shows how consumer shopping preferences have been impacted by the pandemic. The safety concerns surrounding retail in the past year have played a large role in the rising popularity of QR codes, with younger shoppers taking them seriously – 57% of 18-34 year-olds say QR codes make their shopping experience safer.

Simon Hathaway, MD EMEA at Outform, sums it up: “The QR code’s popularity in Asia has never been matched in the West, which by and large has written it off as a retail tool. But the global pandemic has proven just how resilient this piece of tech is, and not just for retail, but for all manner of industries.”

 He adds: “[QR’s] propensity to create a digital handshake – in its broader sense of using tech to connect customers with brands and stores – and to do so safely and as conveniently as possible, isn’t exclusive to the pandemic. The QR code has finally clicked with people, and the fact that half of our respondents believe it’s ‘the future of shopping’ is testament to that.”

 

2) Thorntons to permanently close all stores while Hotel Chocolat sees profits and sales rise. While Thorntons closed and put 600 jobs at risk, Hotel Chocolat’s revenues rose 11% to £101.9m in the second half of 2020. 

Why should I care? 

Thorntons was popular way back in the 80s and it’s stayed stuck in the past watching competitors enter the market and pass them by ever since. Hotel Chocolat’s responsiveness to change and ability to adapt in the face of physical store closures during lockdown resulted in its UK sales rising 12% in the final six months of 2020, with just over half of sales coming through online, subscriptions and online experience such as its ‘virtual tasting’ sessions. 

If the past year has shown us anything, it’s that established brands cannot rest on their laurels – they must be reactive and fast to adapt to change in the face of the ever-evolving retail landscape. From a seismic shift in consumer behaviour to ecommerce capabilities – brands need to innovate and get ahead of the curve before they get left behind for good.

 

3.) UK consumers poised for £50bn spending spree – spend spend spend! Britons are planning to use a hefty chunk of the savings built up over the past year to go on a £50bn spending spree once restrictions are lifted.

Why should I care? 

Because brighter days are on their way – according to Scottish Friendly and the Centre for Economics and Business Research – households intend to take more holidays at home and abroad, travel, and go out to eat in cafes and restaurants.

The report said a quarter of the £192bn of lockdown savings accumulated since the pandemic curbed activity in the UK in March 2020 would be spent.

This increased desire to spend will provide a welcome boost for many business owners – especially seaside communities who rely on domestic tourism.

 

4.) Following Moonpig’s astronomical £1.2bn valuation in its IPO last month, the cards and gifting retailer has announced its biggest brand launch to date with the addition of LEGO gifts. 

Why should I care? 

Well, there’s only so many cards you can design, isn’t there? Over the past three months, Moonpig has introduced more than 50 new brands on its site across the food, alcohol, beauty, home and toy categories.  These include the likes of Edinburgh Gin, Johnnie Walker, Nivea, OPI, Hasbro and Pokemon. 

All eyes are now on Moonpig to see if its extensive diversification strategy will live up to the hype and deliver sustained growth of market share. Only time will tell! 

 

5.)  Retail store closures reach 48 a day: new data from PwC revealed that over 17,500 stores closed in Great Britain last year. 

Why should I care? 

Apart from the obvious impact on jobs and the country’s economy – the research also revealed that 2020 also saw 7,665 store openings. While this is still a net loss of almost 10,000 stores, it makes you think about what the highstreet will look like towards the end of this year and beyond. With many staple highstreet stores such as Topshop and Dorothy Perkins disappearing from the retail landscape, vacant properties and falling rent prices present an opportunity for small businesses to make their mark on the highstreet. 

We are already beginning to see an increase in artisanal businesses such as coffee shops and bakeries, so while it’s sad to see the disappearance of many traditional brands from our towns and cities, it’s important to remain optimistic for the future evolution of the highstreet. For example, M&S is redeveloping it’s Oxford Street store to incorporate a gym as they respond to changing consumer habits in the wake of the pandemic.