Retail Trends 2017
The perfect storm of cost pressures, rising inflation and slowing wage growth is impacting consumer confidence and dampening demand.
- A tricky start to 2017 for retail
- Retail Trends in 2017
- Retail Trends 2017 SlideShare
- Further Reading
In the first half of 2017 we have seen the consumer economy tighten – inflation has risen and wage growth has slowed – producing a squeeze on consumer’s disposable incomes. The general election has only exacerbated the prevailing mood of uncertainty as Brexit negotiations continue.
Retail sales growth has slowed and we have seen shop prices rise despite many protestations at the start of the year - retailers are having to pass some of the cost rises on to consumers.
A tricky start to 2017 for retail
2017 has got off to a tough start and this has been reflected in retailers’ statements to the market. Many have spoken of difficult trading conditions and we have seen the announcement of cost cutting measures, job losses and store closures. However, there have also been some strong performances, most notably from online specialists and the discounters.
Broadly speaking non-food has suffered more than the food sector – as we have found in our research that consumers are beginning to switch some of their spending away from discretionary categories to focus on essentials.
In our January briefing we spoke of a perfect storm of cost pressures building in the retail market driven by:
- Increases in business rates
- Rising staff costs
- Depreciation of sterling
- Rising fuel and commodity prices
- Increases in pension cost
This topic is explored further in our Retail Profitability Challenge Report.
Pressure on retailers has increased and added to this there is the need to continue to innovate and invest in digital.
Retail Trends in 2017
Here’s a mid-year update of the predictions we made in January on the five key top trends which are transforming retail in 2017:
- Retail’s next digital tipping point
2017 is shaping up to be a new digital tipping point for retail as ecommerce continues on its relentless growth trajectory. This is being driven by the ambitious growth agenda of the leading pure-players who have now also taken on an omnichannel retailing approach and as for the rest, online is continuing to rise in importance. This is having a massive impact on the store estate in the US with 8,600 stores estimated to close in 2017.
- Store 4.0 – fulfilment, inspiration & friction free
Online growth means that stores will play a different role in the future, one that is focused on experience. Many new store concepts use technology to either enhance the customer buying experience by offering a great product showcase or by finding ways to bridge the gap between the digital and the physical to make it more convenient for the customer.
- Conversational commerce
Voice user interfaces (VUI) have divided commentators with detractors focusing on its limitations whilst proponents focus on the fact that it is a much more intuitive way of engaging with the online world. Retailers continue to experiment using voice to make consumers lives easier. Ultimately we believe customers will want the additional convenience of VUI.
- The robots have their “AIs” on our jobs
Robotics and Cognitive Automation continues to be a hot topic in 2017. Many retails are using automation in both the front and back office to help deliver digital transformation and increase cost and operational efficiencies.
- Agile at scale
Many retailers have embraced agile working in specific areas of their business – the challenge is how can retailers now scale this across their business. All retailers have to respond faster and faster to rapid changing customer demand. eCommerce start-up businesses have an advantage as many have adopted agile working from day one while the bigger players are still on the journey.
The Retail Profitability Challenge
Following a period of unprecedented change, rising pressure costs and lower pricing power and the need to invest in digital transformation. How can retailers remain profitable?
Consumer Review: Digital Predictions 2017
In the latest edition of The Deloitte Consumer Review, Digital Predictions 2017, we focus on six digital technology trends that will accelerate disruption in the consumer market in 2017.
Consumer Review - Customer Loyalty: A relationship, not just a scheme
We believe traditional loyalty schemes need a rethink. Not only because of changing consumer expectations, but also because they have become expensive to run and difficult to unwind. So what can businesses do to improve the effectiveness of loyalty
What are the key forces driving change in the retail sector? Where does the opportunity with the consumer
Deloitte Consumer Tracker
Quarterly review of consumer confidence and spending