After a bad August, the channel could help retail

The pressure is on to turn around sale decreases, and a trusted partner that can help introduce efficient technology might be part of the answer

The retail sector suffered a setback in August, with figures from the Office of National Statistics (ONS) indicating that last month was a challenging time for both bricks and mortar and online retailers.

The latest ONS numbers showed that retail sales volumes fell by 1.6% in August, and were down 5% year-on-year, with all main sectors in retail falling, which has not happened since last July. Numbers from the Retail sales index were not all bad, however, as they indicated that the value of sales increased by 3.7% from 2021.

The cost of living crisis – which is having a negative impact on spending – plus rising prices, were highlighted as being the causes of last month’s issues.

With the pressure on the sector to make significant revenues in the crucial fourth quarter, the disappointment of August is being used by some in the industry to urge a rethink on IT strategy.

The ONS figures might spark a conversation around where retailers are heading and how the channel can help them get there, according to Martin Pateman-Lewis, client engagement director at Ensono Digital.

“Challenging times emphasise the need for providers to gain a 360-degree view of their customers,” he said. “Brands must stay close to consumers wherever they shop, understanding the products and services they need and providing them with personalised, flexible online and in-store experiences. This should be backed by flexible, efficient use of technology, making the most of the scalability of cloud and the reliability of mainframe to support customers’ needs.

“The fall in retail spending throughout August, while unsurprising, comes at a challenging time for retailers,” said Pateman-Lewis. “Many organisations feel a social responsibility to support their staff and customers throughout the cost of living crisis. However, a complex web of supply chain pressures, driven by factors including the legacy of the pandemic, the shock of the Ukraine crisis and the UK’s new relationship with the EU, has introduced unprecedented uncertainty in the flow of goods into the UK. As a result, easing financial pressure on consumers is becoming increasingly difficult.”

Falling real incomes

Helen Dickinson, chief executive of the British Retail Consortium, described the situation over the summer for many retailers: “Sales rose slightly in August, though volumes were down significantly as a result of inflation at 10%. Consumers cut back on major purchases, such as white goods, as falling real incomes made many people think twice.

“Retailers are working hard to keep prices down for their customers, despite their own costs rising substantially – including energy, imports, shipping and haulage,” she added.

The BRC called on the government to provide retailers with more help and look again at the proposed business rate rise due to kick in next year.

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