It's that time of year again.
Christmas cheer is always underpinned by seemingly constant retail crisis announcements in the media. Massive declines in department stores sales and EBIT, high streets posting the lowest Christmas footfall since the credit crunch and dwindling cash spending with looming no deal Brexit possibilities. Happy reading!
However, I've been reading up on some positive things to expect in 2019, so I thought I'd share a few. Merry Christmas!
AI will be the single largest contributor to the high street rescue operation.
Retailers are increasingly investing in AI from a supply chain POV, utilising clean data from websites and optimising shopper experiences. The adoption of AI within retail is something Morrisons and Ocado have excelled at in their operations functions.
Ocado's robotic ordering processes 65,000 orders a week, preempting issues and nullifying stocking problems to ensure a smoother customer journey and less headaches at HQ.
Morrisons has had similar success, enabling greater efficiency, less product stockpiling and increasing operational productivity - meaning customers have a better and more considered choice. This is backed up by a 3rd successive year of growth.
The prize for implementing AI across operational elements is estimated to be worth $300billion so expect more of this as the tech continues improve at lightning speed.
On the High Street, expect subtle but radical change in 2019 with AI. Concession propositions/space renting could be the way forward. Albeit on a much larger scale to one off premium retailers such as Harrods & Selfridges who excel in this. This would enable less or no stock holding, utilising supplier's supply chains, saving millions and bringing with it a more focused and seasonal relevance in customer proposition.
Other ideas, such as Next partnering Costa in their department store formats is a welcome change from the frankly dreary cafe culture in other stores. Could on site gyms in Mr Ashley's Sports Direct come? ASOS stores and AI run checkouts? JLP adopting "Experiential" concepts and Debenhams Watford new "Hero Zones" focused on H&B for men are all much more interesting shopper concepts.
One thing is for sure, the investment in AI is inevitable and critical to bring back our high streets. Although Retailers need to make sure it's for good reason, as only 1% of AI ideas are fully adopted & implemented. Are retailers using the right parameters to measure this? Invest in the consumer - and not just to save cost - not simply focusing on ROI. This has got to be the next play to bring back our High Streets.
Many major retail chains seem to be in trouble. This week Marks & Spencer said it will close down 100 stores as profits tumble. This follows Mothercare’s announcement last week of 50 store closures. House of Fraser is restructuring. Debenhams’ profits have collapsed. And earlier this year Toys r Us and Maplin crashed into administration