The UK retail crisis has deepened with an alarming 38 percent of FTSE-listed general retailers issuing profit warnings in 2018, a 50 percent increase on the previous year and the highest number since 2008, EY reported this week.
The professional services company blamed “relentless margin squeeze, the continuous need for reinvention and falling consumer confidence” for making 2018 “an exceptionally tough year” for retailers across the country.
The news comes as the Royal Institution for Chartered Surveyors (RICS) instructed property valuers to be “aware of the potential for significant changes in value” in retail properties — driven by a seismic shift in shopping habits.
In short, shopping centres and stores may not be worth what landlords think.
Can retail technology ride to the rescue? As retailers increasingly equip stores with IoT sensors, beacons and cameras to capture actionable data on how shoppers engage with store items and brands, many companies including the UK’s Arm hope so.
The valuation warning, as reported by the Sunday Times, comes amid growing concerns about the UK retail crisis, amid a wave of closures.
Yet with nearly 90 percent of global retail revenue still coming from physical store locations, many technology companies continue to bet on a tech-inspired turnaround in bricks-and-mortar. Arm is the latest to roll out a retail solutions offering, with an eye on a growing global appetite for data-driven solutions that help optimise margin opportunity, reduce waste and allow for hyper-personalised sales offers and marketing.
UK Retail Crisis: From IoU to IoT?
Arm – owned by Japan’s Softbank – said it is launching a “full, easy to deploy retail solution that enables retailers to securely consolidate, unify and manage their previously siloed digital customer data and physical in-store IoT data”.
The Arm Retail solution enables merchandisers to hyperlocalise items in the store based on shopper preferences, the Cambridge-based company said.
“Retail store operations can optimise store layout, item placement, and store associates’ priorities based on inferences drawn from real-time data on metrics such as item popularity/SKU velocity, aisle traffic, dwell time, etc.”
“Retailers can also personalize their marketing campaigns to deliver new value to their shoppers. For example, a retailer can provide a personalized in-store advertisement for a type of apparel through an aisle digital signage based on the shopper’s online interest in the product. The solution also seamlessly integrates with retailers’ existing systems and software, including those from our partner Reflexis, the world leader in store execution software solutions used by more than 250 retailers globally.”
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The bet may prove a positive one: According to Gartner, worldwide retail tech spending will increase 3.6%to $203.6 billion in 2019. With retailers rapidly moving from basic ecommerce platforms and point-of-sale (POS) systems through to advanced analytics and IoT platforms, only time will tell if such technology can blunt the impact of falling consumer confidence and the easy ability to do price-comparisons online.
Meanwhile, as Local Data Company statistics show, one retail sector is flourishing: the fastest growing category in the first half of 2018 was barbershops, with 349 new units opening, adding to the 624 net increase in 2017.