Brexit Prompts Digital Data Revolution

Brexit Prompts Digital Data Revolution

In 2020, we can expect retailers to better utilise technology to extract powerful insights from their multi-channel data, allowing them to achieve a deep-set understanding of the factors that motivate customers. This, in turn, will spark a blend of the offline and online worlds to create an immersive digital in-store experience that attracts footfall, in tandem with online sales. With retailers becoming more customer-centric and creative in their approach, they are forced to rethink their strategies.

By: Michael Patterson, DynamicAction's Managing Director, EMEA

With reports of plummeting sales, evasive profit margins and numerous store closures, 2019 is said to have been the worst year for the UK’s retail sales in a quarter of a century. Retail has had to grapple with complex and constant change. Even removing the immediate threat of the unknown with the UK formally set to leave the EU, retailers are still up against a number of issues they simply cannot ignore if they are to survive. 

And, come the end of January there is no turning back. Boris Johnson has vowed to “get Brexit done” with a trade deal in place by the end of 2020 – but what will that trade deal look like and will it indeed be in place within the ambitious timetable stipulated? Certainly, many questions remain unanswered - all of which suggests further volatility in the coming year. 


The list of potential challenges poised to shift the industry are numerous:

  • Strategy around a potential UK slow-down or recession, where the pound slumps further against the US dollar and Euro
  • Potential impact on investment funding, liquidity positions, stability of new funding sources, increases in foreign exchange and interest rates
  • Tax law, accounting standards, EU legislation retainment, VAT, customs and duty rate changes
  • Losing access to highly qualified people from continental Europe, as well as the direct effect on and cost of VISAs
  • Training and investment in home-growth UK resources and recruitment strategies with uncertainly as to what will be required and what can be achieved with an undefined timeline
  • The supply chain where EU currently accounts for 54 percent of all goods imported into the UK. Ramifications will be felt by suppliers and stakeholders alike, not to mention the potential customer

Marry all of this together with consumer's crisis of confidence, reduced retail spend and the possibility of the price of goods rising in a world where the cost of doing business is at an all-time high - and there is cause for concern. How can retailers entice shoppers to shop at a time of continued uncertainty?

But let’s not forget, this isn’t the first time UK retail has faced fundamental challenges. As in the past, we need to embrace our heritage of change and adaptability with an open and nimble mindset to weather the current storm.

 

The biggest threat to the industry is the fact that many retailers are clinging to the 'analogue strategies' of yesteryear that delivered past successes, rather than innovating for today’s digital data revolution.

 

So, Brexit could be the trigger that prompts retailers to think afresh, be bold, take decisive action and adopt a new operating mentality that ultimately drives transformation.

In 2020, we can expect retailers to better utilise technology to extract powerful insights from their multi-channel data, allowing them to achieve a deep-set understanding of the factors that motivate customers. This, in turn, will spark a blend of the offline and online worlds to create an immersive digital in-store experience that attracts footfall, in tandem with online sales. With retailers becoming more customer-centric and creative in their approach, they are forced to rethink their strategies.

Only when this shift of mindset occurs can innovation truly take place.