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The Future of the High Street - How it will be shaped in the coming year

This winter has been brutal for retailers across the UK. A toxic combination of changing consumer habits, in addition to households reining in their spending has resulted in one of the toughest winters on record. Big names have fallen victim. Profit warning has come from Mothercare, Carpetright and New Look to name but a few, whilst Toys R Us and Maplin fell into liquidation. 
 
What has caused the downturn of retailers?
There are two key factors at work. Firstly, the UK consumer has been under extreme pressure from rising prices and sluggish wage growth. The post-Brexit devaluation of the pound led to elevated inflation in Britain, 3% over the last five months. Wage growth had been lower, at around 2.5% meaning that households were actually experiencing a wage cut in real terms. This squeeze on their paychecks led to consumers reining in their spending on non-essential items. Bad news for retailers.
 
The second factor is the changing habits of the UK consumer, as the internet shopping revolution continues in full swing. Every £1 in five is now being spent with online retailers.

Footfall is falling in shopping centres and on high streets as consumers turn to retailers for wider product choice, convenient shopping, and more competitive pricing. So, while bricks and mortar retailers are struggling to keep afloat, online retailers are experiencing double-digit growth.

The combining of these two factors have left numerous retailers in vulnerable positions, particularly those stores which over-expanded during the more auspicious time, leaving them burdened with debt and underperforming stores, for example, Toys R US.
 
Another reason for the failure of Toys R Us was its old fashion stores and inability to keep up with changing consumer desires. Furthermore, Maplin’s failure at a time when the online sale of electrical goods is on the increase could also be pinned on a big disconnect between what the consumers want from retailers and what they got.

Bricks and mortar stores still serve a purpose, however, firms need to move with the times and start to view the shopping process as an overall experience rather than a need to purchase something. Retailers must provide an experience that’s worth the trip. Customer expectations in the store are higher than ever.
 
Scan and go
Retailers have been notoriously slow to pick up on new technology to drive the customer experience forward. In today’s competitive environment, in order to succeed, retailers will need to carefully consider technological solutions that will help keep them relevant and competitive going forward.

As retailers try to make store shopping more convenient and cling to shoppers that are more used to shopping on Amazon, the use of “scan and go” technology could surge this year. This technology enables the customer to keep track of their shopping as they go, scanning items as they are placed in their trolley, which is then paid for at the click of a button once you are done. No long queues, no waiting around. Just one example of a more fluid experience. 
 
Voice Assistance and AI
Voice assistance is another emerging technology which could reshape the customer experience, enabling employees to provide better assistance. Assistance is a key point because you don’t get assistance when you shop online. This could go hand in hand with AI enabling a frictionless experience.

For example, in the future, an employee could have an earpiece they talk into to ask the AI counterpart if a particular item comes in a certain size and if it is in stock. The consumer would receive an immediate answer, as they know stock availability when they shop online. Yet another way of incorporating technology to provide a more seamless process to the customer.

These are just two brief examples of how technology could change the world of retail. Retail is undergoing a revival. It is by no means dead, but it needs to remain competitive and adapt to the changing preferences of the customer. Technology is going to be key to the survival of bricks and mortar retailers and will help fuel the resurgence of retail in 2018.