Request a Brochure

Mitrefinch needs the contact information you provide to us to contact you about our products and services. You may unsubscribe from these communications at any time. For information on how to unsubscribe, as well as our privacy practices and commitment to protecting your privacy, please review our Privacy Policy.

How the Retail Industry is Evolving Amongst Global Change

Untitled design (14)

The retail sector has been faced with levels of unprecedented disruption over the past 12 months. An industry which was already girding itself against impending shifts due to Brexit, the COVID-19 pandemic has served to compound existing concerns, as well as raising a host of fresh worries. 

As we move further in 2021 and beyond, business leaders in the retail sector will be keen to move away from the survival mode mindset of the past year and instead focus on the task of recovery and ultimately, how best to future proof their organisations to ensure the greatest level of success possible moving forward.

The key to safeguarding the health and success of businesses will lie in the ability of business leaders to read and anticipate future trends for the industry and the market. 

As we begin to enter a post-pandemic world, businesses will be faced with fundamental shifts not only in the operation and function of the industry, but also changes in consumer attitudes and expectations.

In this article, we are going to explore the current state of the retail industry and examine some of the fundamental changes we have seen in the past 12 months and how we expect these shifts to inform the growth and development of the sector moving forward.

From dealing with the fallout of COVID-19, societal changes and how to safeguard against disruption caused by changes due to Brexit, these are the key factors which businesses need to be aware of in order to secure their future growth and success.

Brexit and the retail supply chain

Ever since the result of 2016’s EU referendum, businesses across the nation have been tackling the challenge of how best to prepare for the UK’s exit from the European Union. Long before any pandemic based concerns, entire sectors were forecasting disruption as a result of Brexit and for many, the focus has been on how to lessen the impact of upheaval caused by the UK’s exit from the world’s largest trading bloc. 

A report by Mckinsey shows that in 2018, the European Union was the United Kingdom’s number one partner for trade in goods, comprising 54% of imports and 49% of exports. The EU also accounts for 71% of trade for transport equipment, leading many industries to fear that without proper processes or agreements in place, businesses will begin to see disruptions to the supply chain as the ability to maintain logistics fleets is severely hampered.

The consumer products and retail sector is facing challenges as margins are being squeezed between weakening demand and rising costs. Businesses operating within the industry are more conscious than ever of spiralling costs and one area where increased expenditure is predicted is in the logistical chains of organisations. 

Mckinsey summarises these anxieties, stating that: “Limited visibility of suppliers, including suppliers of components, materials, spare parts and packaging; along with service providers such as logistics companies and outsourced facilities management providers, could cause hidden risks and costs.” At a time where the sector is already faced with unprecedented levels of downturn in sales, further incurring of costs will be something that all businesses are keen to avoid.

A report by Marsh also outlines concerns that businesses should be aware of post-Brexit. They cite changes to trade tariffs and the administrative upheaval that this brings as one of the areas of the most concern. 

As they put it: “Any change to our relationship with the EU has the potential to undo some of the efficiencies gained from the “four freedoms” (that is, the freedom of movement of goods, the freedom of movement of workers, the freedom to provide services, and the free movement of capital) and create a new set of challenges in the longer-term”. 

The UK’s exit from the EU does not mean a wholesale divorce from existing rules, with businesses still beholden to regulations regarding products sold to EU nations. Uncertainty surrounding potential changes to tariffs is also a cause for some anxiety as this could lead to delays in the procurement of goods and supplies. 

For many industries, the ability to trade unimpeded is essential to their ability to remain competitive and therefore, looking at ways to lessen the impact of tariff changes will be paramount.

The rise of e-commerce over the past year may also serve to hinder businesses who rely on bricks and mortar sites. Disruptions to the supply chain could lead to greater lead times in retail site’s abilities to restock goods. Even disruptions of a couple of days could be sufficient enough to see customers seeking alternative means of procurement, such as from online retailers. 

Ensuring the impact of Brexit on their supply chains are as minimal as possible will be critical to these businesses who want to ensure a high level of customer footfall and repeat business.

Mckinsey raises another area of concern: Data protection – personal data flows are currently regulated by the EU, with the European Commission (EC) holding the power to determine whether a country outside of the EU offers an adequate level of data protection. Without an adequacy decision from the EU or some form of separate legal agreement between the UK and the EU, businesses will need to ensure appropriate legal safeguards (e.g. standard contractual clauses and for intra-group transfers, binding corporate rules) are in place to facilitate cross-border flows of data. This indicates that businesses will need to take into consideration how comprehensive and robust their systems are, not only with regards to data security, but also how adaptable they are to changes in tariffs and regulations.

As part of any business continuity planning post Brexit, businesses would do well to assess the state of their current systems and evaluate what they may need to do in order to future proof their organisation. This sentiment is echoed by KPMG  who in their report, recommend that: “In the short term, turning to data as a vital asset in order to monitor and address any complications you may be facing when sending products across the border. If you get the data right, you’ll hopefully be in a situation where you’ve got digital twins across your supply chain, where you can model different scenarios in real time and make database decisions. By making these decisions now, you will be evolving forwards smoothly, rather than experiencing a ‘big bang’ effect in the future.”

Societal shifts and changing shopping habits

Last year saw a huge upswing in the number of people turning to online retailers as a result of the national lockdowns. Research by the ONS found that the proportion of online retail increased to a record level in January 2021 reaching 35.2% up from 29.6% in December 2020 and was far higher than the 19.5% in January 2020.

Food stores have seen one of the biggest shifts, going from record numbers of in store sales in April 2020 at the height of panic buying, to sustained demand for online sales. Supermarkets found their online delivery booking systems swiftly overwhelmed at the beginning of the first national lockdown as unprecedented levels of demand for home delivery hit.

Department stores and household goods retailers also enjoyed an upswing in sales at the beginning of the first lockdown, increasing to double the February level of sales in June 2020. With social restrictions firmly in place, people across the UK turned towards home improvement projects and retailers specialising in these products saw a marked uptake in business on their online platforms.

By contrast, clothing retailers saw a sharp decline in sales, despite being an industry that has traditionally always had a strongly embedded online presence. Sales dropped by 25% over the course of lockdown, suggesting that as the opportunity for social gatherings decreased, so did the public’s appetite for purchasing new outfits. Sleepwear saw a slight increase in sales up from previous years, reflecting the continued use of remote working policies, but on the whole, 2020 was a bleak year for the fashion industry, with sales suffering the biggest drop in 23 years.

Lockdown restrictions also saw a shift in consumers moving away from the larger high street brands and towards independent retailers. Stalwarts of the high street such as Primark and Debenhams usually enjoy success on the basis of sheer presence: The wide ranges and proliferation of sites across major population centres meaning that the convenience of popping in store to cover a wide range of shopping needs is particularly appealing to consumers who don’t wish to spend their time traipsing across city centres.

With the move to online shopping, the playing field has been levelled somewhat. The convenience of shopping from home is allowing consumers to be more discerning about their purchases and to see out retailers who perhaps offer something a little bit different in terms of their ethos. The Shop here not there initiative created by Nic and Nat Alpi, designed to act as a virtual high street for small retailers.  Bookshop touted as a socially conscious alternative to Amazon, has also enjoyed a rise in popularity since the beginning of the first national lockdown.

It’s clear that as the traditional high street pulled down the shutters, independent retailers found themselves enjoying something of a boom.  The necessary move away from bricks and mortar locations found a flurry of hyper-local shoestring websites popping up all over the country, servicing businesses from independent clothing retailers to microbreweries. One such site- Locally UK, found itself rising from 20,000 views a month to over 120,000 during lockdown.

Despite this shift, the wider global crisis is still placing a huge amount of strain on the finances of independent traders,  With a fifth of small businesses being under threat of collapse in April 2020, there is a sense that the wider public have developed a greater awareness of the plight of the smaller brands in their community and research by Visa has found that 4 out of 5 people said they are committed to shopping locally more so than ever before.

As tumultuous as the past 12 months has been for the retail sector, it is perhaps a heartening indication that the wider customer base has taken the opportunity to re-examine their buying habits in the wake of social restrictions. With many of us being compelled to look closer to home to source the everyday items we usually take for granted, it seems likely that even as we move into the post-pandemic world, that many independent businesses seem to have won over a new host of satisfied customers. 

The power of environmentally friendly brands

A recent poll confirms that people have become more aware of the plight of the environment over lockdown, with 81% becoming increasingly concerned about environmental issues.

Businesses are already looking to capitalise on this newfound appetite for more environmentally friendly, sustainable brands. H&M have pledged that as of 2020, all cotton it uses will come from sustainable sources. A franchise of KFC has also struck a deal with biofuel company Advait, to convert its used cooking oil into biofuel with which they are able to fuel their fleet of logistics vehicles. Market leading brands pledging commitment to environmental change have a fundamental impact in influencing other businesses who naturally will want to avoid the perception by the public as being behind the times.

There are indications that embracing change in this way can see a return on investment for organisations. The Deloitte report indicates that 62% of consumers surveyed would be willing to purchase a “premium” product which was ethically sourced and environmentally friendly in packaging. 

A separate poll confirmed this, finding that British consumers would be willing to pay £3,654 more a year for eco-friendly household goods and services. Developing a reputation as being a more ethical, socially driven business can also help foster brand loyalty by appealing to consumers who will be placing these values at the forefront of purchasing decisions.

The power of technology will also be key for businesses looking to embrace these societal shifts. Deloitte’s report puts it succinctly: “Organisations will need to tell their societal impact story – through their brands and products – and engage in a way that resonates with consumers. Embracing technologies will be key to doing this effectively and emerging technologies such as smart packaging, voice enabled storytelling and AI-driven personalisation have the potential to change the game for societal impact engagements.”

There appears to be a great potential for brands to unlock the power of consumer investment by ensuring they demonstrate their dedication to furthering the goals laid out by their customer’s emerging values.

The impact of COVID-19 on the retail industry

It’s no secret that the retail sector has been one of the hardest hit by the COVID-19 pandemic. 

Research by the ONS indicates that the total volume of retail sales in Great Britain fell by 1.9% in 2020 compared with 2019, the largest fall since records began. Whilst, the rising use of online shopping has eased the impact of the pandemic on the retail sector, online sales rose rapidly following the start of the pandemic- being 60% higher in May when compared with February’s level- it is still an unavoidable fact that retail businesses have seen their bricks and mortar sites shuttered up for the better part of the past 12 months. As the UK begins to open up once again, increasing footfall and profit through these sites, will be forefront in business owner’s minds.

The rise of touch-free shopping

The pandemic has seen the retail sector forced to adapt rapidly in order to maintain operations. The adjustments made to in-store sites such as COVID screens at tills, reductions in maximum occupancy of customers as well as the implementation of contact free pick ups of orders, are all measures which were essential in safeguarding customers and employees whilst maintaining business operations.

As the UK moves out of lockdown, retail businesses are keen to ensure a continuation of these COVID compliant measures in order to minimise the risk to their employees and customers. The UK government has been clear that the easing of lockdown restrictions is one that is operating on a conditional basis. Any sudden influx in coronavirus cases in an area could lead to the implementation of further restrictions, which business owners are understandably keen to avoid.

We can expect to see hygiene and health concerns remain in the forefront of people’s minds even post-pandemic. Retailers will be looking to minimise the number of shared surfaces and contact between consumer and employee. Increasing the use of customer self service checkouts as well as continuing contact free order pick ups, can all help reduce the risk to both employees and customers.

The Visa back to business study found that safety influenced how 78% of global consumers pay due to the pandemic. Visa’s research also found that 46% of global consumers think “using contactless payment methods is among the most important safety measures for stores to follow.”

The newly opened Amazon go store in London is one clear example of a major brand investing heavily in contactless retail sites and with 30 similar locations planned, this is a clear indicator of pandemic era changes to the industry having long lasting repercussions to the shape of the workforce.

Research by Deloitte indicates that businesses will have to be mindful of the strain that the pandemic has had on their consumer’s finances. Data indicates the average household spend is £173 less per week due to the effects of the lockdown – 20% less than it usually would be. As much as businesses will want customers to flock back to them immediately, the financial strain of the pandemic may mean that consumers are forced to be more discerning in their decisions over where they will spend their money. This will require businesses to assess their level of customer engagement and evaluate what steps they need to take in order to elevate their brand to eye catching levels.

One example that Deloitte cites is utilising online platforms to push your brand. The use of livestream events to reach out to customer bases is an increasingly popular trend. According to Brandwatch, “Mention volume for ‘Livestream’ increased 576% in November of 2020 when compared to the average volume of mentions across 2020”.  This is a shift many businesses have already taken on board as 2020 progressed. 

One example is Games Workshop, the UK based miniatures manufacturer who traditionally have previewed upcoming product releases at public events held by the company. Disruption due to COVID has seen the company move to a series of semi regular streams via Twitch.  

Given that the company posted record profits even in the midst of the pandemic, this illustrates the benefits of being adaptable and the way you engage with your customer base should be evident to businesses. Many have picked up on the results that can be generated by this new way of selling, with two of the biggest e-commerce names – Alibaba and Amazon – experimenting with live streaming in 2020.

The use of technology can also be a boon in bridging divides between businesses where the gulf between the online and in-store shopping experience has sometimes seemed insurmountable. in-store shopping experiences have been very limited for the last year, and retailers started experimenting with new technologies to help consumers try on clothing and accessories without having to be there in person. 

Through virtual fitting rooms, virtual try-on for glasses, and even virtual makeup makeovers, innovators in the retail industry have made every effort to reduce potential physical contact, making the online shopping experience as close to the in-store experience as possible.

Google trends data show a definite upswing in customers searching for virtual try on experiences, suggesting a continued appetite for more virtual platforms. Moving forward, businesses who have been willing to embrace technology in order to enhance their customer experience, may find that they have the killer edge when determining consumer patronage.

Buying from independent businesses

The pandemic has served to shine a spotlight on the plight of small, independent businesses, many of which have faced the threat of closure as a result of disruptions. Whilst research shows that in terms of closures, independents fare better than chain stores – the net closures represented 0.5% of the total number of independents in Britain- as we move out of lockdown, there seems to be an increasing level of public awareness that smaller, independent outlets will need our support in order to thrive.

Disruptions to our everyday lives may have forced people to source goods and services outside of their usual suppliers. This may benefit independent businesses in that people may have been forced to diversify their shopping habits, leading them to patronage smaller, independent businesses where they may never have pre-covid. 

Research by Brandwatch certainly suggests an appetite for customers visiting independent retailers- 36% of consumers think the items they buy being branded is less important now than it was before the pandemic. This suggests that the mentality of “bigger is better” regarding retailers is steadily falling by the wayside.

COVID-19 has also encouraged a big move online. Ebay said that during the UK’s first lockdown, the number of small businesses joining its platform more than trebled compared with the same period in 2019. Moving to online platforms allows smaller businesses to remain agile and mitigate disruption caused by the pandemic.

Technology and the retail industry

The evolution and adoption of new technology has been one of the greatest boons to the retail sector and a factor which has allowed the industry to lessen the impact of the pandemic upon business performance. With shifts to online shopping models, supplemented by touchless customer experiences, technology remains a driving force in ensuring businesses remain agile and successful.

A report by Mckinsey suggests that this is merely the beginning, with technological shifts being seen as the bow wave of the future for the sector:

“Retail in the UK is at the forefront of a technology revolution, driven by two forces. One is consumers’ behaviour, as they embrace e-commerce, turn to smaller store formats, and interact with retailers in new ways across channels. The other is the intense pressure on legacy retailers’ margins from the cost of meeting new expectations while fending off competition from digitally native retailers and discounters.”

Trends in shopping online are shaping the way consumers buy from retailers – interesting findings from Deloitte’s global consumer tracker shows that 1 in 10 consumers across Europe now shop online for food (close to 30% in the UK). Similarly in non-food, with stores shut, consumers have quickly adapted to shopping online, with many supermarkets finding their online delivery systems overwhelmed by unprecedented demand for home delivery.

It is clear moving forward that a willingness to adapt and evolve existing systems and processes, will determine the success and profitability of businesses moving forward.


In-store shopping experiences have been very limited for the last year, and retailers have embraced experimenting with new technologies to help consumers try on clothing and accessories without having to be there in person. Through virtual fitting rooms, virtual try-on for glasses, and even virtual beauty makeovers, innovators in the retail industry have made every effort to reduce potential physical contact, making the online shopping experience as close to the in-store experience as possible.

Bridging the divide between the online and in-store experience is only part of the puzzle. As restrictions begin to ease across the country, business owners will be keen to see an increase in footfall of customers visiting them in person. 

In order to ensure future success and the continued patronage of consumers, business owners will need to ensure they are creating a customer experience that not only takes on board lessons around health and safety from last year, but one which also anticipates the changes in attitude that the consumer base will have undergone over the course of the pandemic. Societal shifts as well as a greater level of awareness regarding issues such as sustainability mean that organisations are looking at customers who have a different set of priorities than they potentially would have had before the pandemic.

Every business will want to hit the ground running as we ease out of lockdown and the adoption of new technologies and systems has already proven to be one of the most effective ways for businesses to remain agile and successful. 

Mitrefinch workforce management solutions are designed to help ensure that retail businesses have visibility of their people and processes any time, any place. Make the return to the workplace a breeze, ensuring that you have the peace of mind you deserve to embrace the new normal with confidence. Contact us today to find out how we can help your retail business increase productivity, reduce costs and thrive in a post-covid environment. 


Start the conversation

Get in touch

Mitrefinch needs the contact information you provide to us to contact you about our products and services. You may unsubscribe from these communications at any time. For information on how to unsubscribe, as well as our privacy practices and commitment to protecting your privacy, please review our Privacy Policy.

Request a Brochure

Mitrefinch needs the contact information you provide to us to contact you about our products and services. You may unsubscribe from these communications at any time. For information on how to unsubscribe, as well as our privacy practices and commitment to protecting your privacy, please review our Privacy Policy.

Sign up for all our latest news and blogs

You have Successfully Subscribed!