market roundup Retail Forecast
SGB brings you the latest updates on the retail market, straight from the experts
Apps driving mobile for many retailers
According to Urban Engagement, almost half of retailers say that between 21 and 50% of their web sales come directly from purchases made on an app However, 23% of IRUK Top 500 retailers currently have a transactional app and 4% have no plans to use apps as part of a multichannel strategy. It is unsurprising that all companies have moved beyond a desktop-only e-commerce approach with a dedicated mobile app or mobile-friendly site. However, the difference between those with a transactional app verses a broader experience-based app is vast: 61% of retailers have a transactional dedicated mobile app, compared to only 8% that have an experience-focussed app.
British Retail Consortium predicts 900,000 fewer retail jobs by 2025
According to a report released in February, the rate of change within the retail workforce is set to quicken as the digital revolution reshapes the industry, assisted by many more leases being up for renewal and accelerated by the diverging costs of labour versus technology. The numbers employed in retail have declined since 2008, but the incidence of low pay has been rising in retail for several years. What's more, suggests the report, whilst the retail industry is supportive in principle of the National Living Wage, the effects on employment have been underestimated, and cost pressures have increased markedly at a time when growth in consumer expenditure has been subdued. Together, these effects could mean there are as many as 900,000 fewer jobs in retail by 2025 – but those that remain will be more productive and higher earning. Helen Dickinson, chief executive of the BRC, said: “As an industry we expect the years ahead will see accelerating change. Retailers will develop better propositions and compete harder across an increasing range of business models from modern multi-channel formats through to discounters and online businesses. Recent policy announcements, in particular the National Living Wage and the introduction of the apprenticeship levy, will increase the pace of some of these changes.”
Sports Direct falls out of FTSE 100
Sport Direct’s share prices have slumped more than 40% since the beginning of December, following investigations into poor working conditions and a January report from the retailer warning that annual profits would be £40m lower than expected. Mike Ashley’s Sports Direct International has now been expelled from the FTSE 100 following the plunge in its share price. Former shadow business secretary Chuka
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Umunna, who started the parliamentary debate on the retailer, said: “What this illustrates is that good business is good business and vice versa. So if you’re going to be seen to be pursuing a business model that customers do not approve of there will be an impact on how the company is viewed and valued. Investors and customers are not only looking for good value. Increasingly they are looking for good values in a company.”
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