A combination of bricks and mortar expansion, eCommerce improvements and investment in marketing are priorities this year for UK retailers. New research from American Express suggests retailers are increasing their efforts to boost sales. Amex’s surveyed 500 senior UK decisionmakers in retail and hospitality businesses of all sizes, with at least one physical store. The research explored their current challenges, investment priorities, and customer attraction strategies.
The findings reveal making improvements to their online operations are front of mind. 32% of the retailers surveyed plan to either revamp their existing eCommerce presence, or launch a new eCommerce site, in the coming 12 months.
Perhaps somewhat surprisingly, the research reveals plans to continue investment in bricks and mortar. Almost a third (29%) of respondents planning to open a new store or venue in 2024. Looking at large retailers specifically, 53% plan to open a new premises this year.
The research points to a positive outlook for the year ahead amongst retailers. 80% feel confident they can successfully tackle the perennial challenge of attracting new customers and keeping existing ones.
35% of retailers cited business development and marketing as important investment areas to help build connections with customers. Among those prioritising this, 60% plan to experiment with new marketing channels. 53% are ramping up social media activity to help reach new customers and tap into trends which are exciting shoppers.
Dan Edelman, General Manager, UK Merchant Services at American Express said, “Our research reveals an optimism among UK retailers. There is an appetite to invest to tackle the ongoing challenge of attracting and retaining customers. This comes with a recognition that, in a competitive landscape, retailers need to utilise all the channels available to them to build connections. It is encouraging to see that a bricks and mortar presence remains key, in tandem with driving online growth. To create those customer experiences that encourage spend and lasting loyalty.”
The AI opportunity for retailers
The research also asked respondents about their views and use of AI, technology which is widely acknowledged as having the capability to enhance the customer experience. Of those retailers that are already using some form of AI, a significant 83% reported a positive impact. Many respondents reporting ‘indicating customer experience’ ranked as one of the top three benefits witnessed.
However, the findings also reveal a potential missed opportunity for some. 59% of the small and medium-sized retailers surveyed said they were yet to adopt AI in their business at all. This is in stark contrast with just 6% of large retailers yet to do so. Barriers to adoption cited by respondents included cost of implementation. In addition to the lack of perceived relevance to their business, with these sentiments more keenly expressed among smaller retailers.
Research methodology
The research was conducted by Opinium on behalf of American Express from 13th to 21st March 2024. The sample was 500 senior business DMs (director+ level) in UK merchants which have at least one physical premises and operate in either the retail or B2C hospitality industry.
Enterprise Times: What this means for businesses
This research appears to be sending contradictory signals. While it is not surprising that retailers are ramping up investment in eCommerce. Enhancing their retail sites, embracing social media and developing omnichannel such as Click-and-collect or curb side pickups. While this ambition is mainly felt among the nation’s large retailers (53%), the research demonstrates that plans for expansion are also on the cards for smaller retailers.
The headline statistic is that 29% of UK retailers plan to open a new store or venue in 2024. This is a surprising trend, considering the state of the UK high street, with its high business rates and dwindling footfall. However, these retailers are also investing in their brands through additional marketing and social media efforts.
Although not covered in the research, there is now a trend of online operators opening up brick and mortar stores. Amazon Fresh has opened 19 stores in the UK, in addition to its flagship Bluewater store. The company has undertaken a string of other bricks-and-mortar trials, including a fashion pop-up shop and even a hi-tech hair salon in London.
