It is a well-known fact that the state of the London retail industry is facing tough times. Not only have high street businesses felt the pinch, but challenging market conditions are likewise affecting small-to medium-sized organisations. Industry experts are analysing some of the factors that have led to such doldrums and there is no single answer. Instead, we need to appreciate how various metrics are all playing a role in synergy with one another. Why have so many London stores been negatively impacted and are there any potential solutions that can be enacted in the coming year?
A Mixture of Market Conditions: The Perfect Storm?
One of the major reasons why traditional retailers are struggling arises from the growing presence of the digital community. It has been shown that online non-food purchases rose by a staggering 7.5 per cent in 2017 (1). In other words, consumers are now looking towards virtual portals to buy the very same goods and services that would normally be offered by brick-and-mortar outlets. However, this is only one piece of the puzzle.
Rising costs are also taking their toll. The fall of the pound immediately following the Brexit vote has made it more expensive for businesses to source their goods; particularly those which would normally be imported from abroad. Consumers are therefore tightening their belts across the boards.
It is also important to understand a concept known as “consumption fatigue”. This is essentially defined as a decrease in spending within a broad demographic. The younger generation is now more prone to rent than to buy a home. High-end merchandise is likewise less likely to be purchased than in the past. While spending on entertainment and dining has risen, the same cannot be said for retail products.
Now that we have identified three causes of the retail downturn, what steps can London businesses take to cope? One answer can be see in online marketplace. Why are stores migrating into this environment and choosing virtual point of sale platforms over the traditional cash register?
The Benefits of Bespoke POS Software
The most obvious windfall of adopting the POS architecture produced by cloud-based firms such as Shopify is that a larger target demographic can be reached; taking a portion of the pressure off of in-house sales. It should also be pointed out that these systems are highly intuitive and agile. They can be adapted to suit nearly any business model and they are just as appropriate for high street locations as they are for enterprise-level firms. Expedient payment gateways, around-the-clock client support, fully customisable themes, and flexible payment options are some of the other benefits which should not be taken lightly.
Do the recent retail figures spell bearish days ahead for the London retail sector? Perhaps. However, we are more likely to see these very same profits migrate into the digital community. Businesses that are able to implement the correct e-commerce software will be those which can enjoy success in 2019 and well into the future.