Pandemic drives boom in retail risk taking with 60% of retailers now more likely to take risks.
Covid Impact on UK Retail Sector
Covid-19 had a negative impact on the retail sector
, especially physical stores who were forced to close during national lockdowns. According to the Office of National Statistics, the total volume of retail sales in Great Britain had its most notable fall since records began, falling by 1.9% in 2020 compared with 2019. The impact was particularly severe for non-essential retail.
For that reason the UK, like the majority of countries, experienced a drop in retail sales
in Q2 2020; however, the impact tended to be weaker in the lockdowns that followed. Whether this was due to an improvement in online operations or an increased demand, retail managed to be less negatively impacted than expected. Now, coming out of lockdown, there is a boom in retailers taking business risk.
60% of UK retailers are taking more business risks than before the Covid-19 pandemic. According to research conducted by Opinium and LiveArea, a Merkle Company, businesses are reacting to changes in consumer behaviour and gambling on new services or offerings.
As well as taking more risks, the process of implementation has sped up. When it comes to approving new products, features, or solutions, over half (54%) stated that approval process has become quicker as a direct result of the pandemic. Moreover, 64% of businesses are quicker at making business decisions and 23% are much quicker.
When introducing new ideas to the market, technology was seen to be the main driver. 6 in 10 (60%) stated technology drove innovation, while nearly half thought that profits (49%) and customer demand (48%) were key drivers.
‘The pandemic has highlighted some of the glaring faults in many retail companies. For too long they have feared introducing new technology, utilising new platforms, or stepping outside their traditional audience,” said Samantha Mansfield, Senior Strategy Director at LiveArea, a Merkle Company. “This can simply no longer be the case – brands need to take risks but do so in a data driven manner. The keys to modern retailer success lie in being able to innovate, test, and rollout new products, services and features quickly, and then having the insight and flexibility to consistently optimise its performance. Companies able to so will thrive in our new digital first economy.”