future of retail


social engagement, which is a problem for consumer-facing roles. Also, when Generation Alpha [those born from 2010] start to enter the workforce there will be companies with employees across five generational cohorts, with people aged 16 working with some in their 70s because people are retiring later. How do you train people starting work on the same day when there is a gap of 50-plus years in age?” Simpson said: “I’m seeing retailers


challenged by how they’re structured. This goes back to budget pressures and innovation happening so quickly. Being organised in a way that allows businesses to push through change efficiently and cost-effectively is a challenge. Traditionally, retailers have been organised around stores and commerce, with marketing, technology and data separate. Now people are having to work more in multifunctional teams.” Walton added: “There is another


element which is the churn in senior roles. A lot of recent retail CEO appointments have been of those with a focus on getting back to the core of a business. Previously, there was an expansionary focus – ‘Let’s do new things.’ Now it’s ‘Let’s get the core business right, focus on the customer, get the price and product right.’” Simpson agreed: “The refocus on retail fundamentals is core. Pricing, promotion, product and proposition are all key, and there isn’t space in the mid-market for retailers which struggle to define who they are. Being super clear on your brand and what it stands for and super clear on who your customers are is really important.” The biggest retailers face new corporate sustainability reporting requirements this year under the EU Corporate Sustainability Reporting Directive (CSRD). Simpson suggested: “Retailers will


have to meet the requirements, but I’m not sure they will go any further. They are challenged in any area of discretionary spend over and above core regulations.” Walton pointed out: “The EU CSRD is


not the only regulation. There is a complex regulatory environment. The burden of so much regulation is the issue. There is


THE RATE of retail closures


has risen (Figure 48), but high streets appear in a healthier state than shopping centres


(Figure 49). Online retail sales turned up as usual ahead of Christmas but seem to


have plateaued at 26%-27% of sales excluding fuel over most of the year (Figure 50)


FIGURE 50: UK ONLINE RETAIL SALES 40 33% 30 27% % 22% 20 20% Value as % of UK retail* 37%38% 34% 29%28% 33% 30% 26%26%25% 30% 27% 26%26%26% 31% 30% 27% 26%27%27%


10


Jan Mar ayM Sept ovN Jan Mar ayM Sept ovN Jan Mar ayM Sept ovN Jan Mar ayM Sept ovN Jan Mar ayM Sept Nov 2020


2021 2022 2023 2024 *Excludes auto fuel; figures rounded Source: ONS


packaging and waste regulation, human rights regulation, AI regulation, digital regulation – all kinds of EU regulations hitting businesses at once.” But he added: “Businesses can do


stuff on sustainability which both helps their reporting and drives value in their business. They can change their supply chain so they’re not reliant on unsustainable things, and don’t necessarily have to communicate that to consumers.” Loyalty and retail media networks


– brands paying retailers for display – continue to grow in importance. Simpson noted: “Loyalty schemes are not the points-for-pounds schemes they used to be. Retailers really understand the value of customer data now and are trying to drive up the proportion of transactions they can accredit to a known customer. There is a lot of innovation in loyalty to make it worth a customer’s while to identify themselves. “We’ve also seen a big rise in retail media


networks over the last year. Unlocking value in every area a retailer can will be central.” Walton agreed: “Retail media is going


to be a big revenue driver.” But he added: “It’s going to be increasingly scrutinised in terms of, ‘Is this driving sales?’ Likewise, if a business has 15 third-party vendors supplying generative AI solutions – that is unsustainable. What’s driving revenue?”


Travel Weekly Insight Report 2025 31


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