It’s no surprise to see retail sales fell for the fourth month running in August

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It’s no real surprise to see retail sales fell for the fourth month running in August, by 0.9% according to ONS figures – but it’s encouraging that this is a markedly reduced drop from July’s 2.8%. Grocery stores were hit by a 1.2% fall in sales, due largely to an overdue return to eating and drinking out at restaurants and bars. However, it can’t be ignored that labour shortages and difficulties with global supply chains also played a part, in a month where empty shelves plagued the UK’s supermarkets.

If they want to compete with the hospitality sector, retailers need to invest in creating personalised, valuable experiences. This goes further than just offering the products customers need. It’s about providing unique experiences, whether that be rapid same-day delivery or experiential destination stores. To achieve this, retailers need to invest in understanding their customers, by collecting and analysing consumer data through effective digital marketing engagement and loyalty programmes. We are seeing some retailers focus heavily on loyalty, such as Tesco’s new roll-out of widespread ‘Clubcard prices’, which should pay off in the long-term, especially over the Christmas period. Other retailers would do well to follow suit, expanding their loyalty schemes and going one step further into subscription models, making it even easier for consumers to keep coming back for the same great products and services.

Faced with shortages, supply chain delays, and unpredictable weather, forecasting algorithms also need revision. Traditional forecasting techniques, based on historical data and trends may no longer work effectively. Retailers need to show agility in the buying process, especially as the Golden Quarter looms. Retailers should take the opportunity to prepare for this period, ensuring they have the right stock at the ready. This preparedness will be difficult to achieve but can be helped along by analysis of consumer shopping patterns and behaviours, and even predictive AI and ML tools to forecast short-term demand.