THE 2019 UK RETAIL MARKET OPPORTUNITY:

YOUR INDEPENDENT AND AUTHORITATIVE GUIDE TO THE UK RETAIL MARKET

Produced in collaboration with:

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THE UK MARKET REPORT 2019

A DYNAMIC INDUSTRY

Welcome message from Julie Driscoll,

Regional Director, UK, ITE

Welcome fromthe Chief Executiveof the BritishRetail Consortium

is now being questioned and many product sectors have shifted completely online.

For the UK, which for so many years has been viewed as one of the most dynamic retail markets, these changes have been even more accentuated.

And yet, retailing in the UK continues to be a hugely important part of the economy through its contribution to GDP and as the biggest private sector employer. More than that, the new retail that is emerging rapidly in the UK with online retailers and established retailers shifting their channel mix is bringing in exciting new technologies and a greater level of innovation and sophistication than ever seen before.

As organisers of the UK’s most important retail shows: Spring Fair and its sister event, Autumn Fair, Pure London, Moda, Scoop, Jacket Required, The Jewellery and Watch Show and Glee, we know first-hand the challenges facing retailers of every scale and channel. There is an even-greater emphasis on having

out the new and unusual. Two hundred years ago Napoleon Bonaparte described us as a nation of shopkeepers and we are certainly that. There are almost 200,000 registered retailers in the UK operating almost 300,000 shops and employing 9 per cent of the workforce. Sales total over £370 billion making our small island the most densely traded in the world.

Having travelled the world for three decades looking at retail, as a director for both John Lewis and Waitrose and latterly as Minister of State for Trade and Investment, I have been continually struck by how the UK’s retailers have adopted and adapted the best from around the world and driven innovation.

Retailing around the world is being transformed by the shift towards e-commerce and mobile commerce. The role of the store which for generations has defined retailing

As an island nation the British have a long history as explorers and traders, continually seeking

As Chief Executive of the British Retail Consortium, I support any initiative to promote and bring about a better understanding of retailing during what is the most prolonged and radical transformation in recent history. Our mission as the UK’s leading retail trade association is to make a positive difference to the retail industry and the customers it serves, today and in the future.

Retail is an exciting, dynamic and diverse industry. It is a driving force in our economy, a hotbed of innovation and the UK’s largest private sector employer. It serves 53 million consumers with a workforce of 3.1 million of UK jobs, contributing £94 billion to the economy.

Retailers touch the lives of millions of people every day, supporting the vibrancy of the communities they operate in. The industry today is going through a period of profound change. Technology is transforming how people shop; costs are increasing; and growth in consumer spending is slow.

CONTENTSThe heart of successful retailing 3

Proudly independent 4

A passion for product 5

Fashionably tough 6

UK fashion sector review 7

Jewellery looks to shine 8

Green shoots in garden retail 9

For the love of online shopping 10-11

Consumer trends to watch for 12-13

Sourcing for success 14-15

2018 378,437

2019 390,511

2020 402,449

TOTAL UK RETAIL SALES 2018-2020 (GBP MN)

That change is happening quickly and happening now – some say we are only in the foothills. Online retail will continue to grow as retailers invest in new emerging technologies; there will be fewer stores and those stores remaining will offer new experiences; there will be fewer, but better jobs and a career in retail in the future will be very different to today.

This means we have a collective responsibility now more than ever to address the biggest challenges together. Understanding the customer will always be at the heart of successful retailing and with the support of public policy, it will be the resilience, enterprise and hard work of retailers that will see the industry thrive.

Retail has a bright future. This period is about reinvention retail, not Armageddon retail. As always, the BRC will be here to enhance, assist, inform, and shape – working with you to help light the way to retail’s future.

THE 2019 UK RETAIL MARKET OPPORTUNITY THE 2019 UK RETAIL MARKET OPPORTUNITY

Lord Mark Price, former Minister for Trade and Investment and Managing Director of Waitrose and Deputy Chairman of the John Lewis Partnership from 2007-2016, sets out why UK retailing remains among the very best in the world.

Two forces now drive that innovation harder and faster than ever. The internet where the UK is a global leader with 18% of retail sales online, and the rise of the discount stores in food, clothing and general goods. As a consequence, British retailers are reworking and reimagining their physical space, spending billions on building and integrating an online offer, whilst trying to drive added efficiencies. And all of this is happening whilst average retail spending grows by 2.5% per annum. All of which means the UK will remain the nation of retailers.

The Rt Hon The Lord Price CVOBusinessman, writer and Member of the House of Lords

Helen Dickinson OBE,Chief Executive,British Retail Consortium

fantastic product, innovative ideas and attention-grabbing lines that are introduced at an ever-faster pace in order to attract today’s consumer.

Today’s retail winners are those that are embracing change and seizing the opportunities to make their businesses ever more exciting. Our shows seek to bring together the world’s best suppliers to meet with the UK’s retail buyers to do just that. I am delighted that we have updated this UK Market Report for 2019 to tell the world about the strength and attractiveness of retailing in this country and to bring some much-needed context to the changes that are taking place.

3.1MILLIONRETAIL JOBS IN THE UK

Source: ONS

1/3PROPORTION OFCONSUMER SPENDING THAT GOES THROUGH RETAIL

Source: ONS

196,800TOTAL NUMBER OF VAT-REGISTERED RETAILERS IN THE UK 2017

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PROUDLY INDEPENDENT

A PASSION FOR PRODUCT

Independent retailers remain a vital part of the UK retail landscape, adding variety and local flavor to town centres and high streets. Spring and Autumn Fair are also highly important to independent retailers. Andrew Goodacre, the Chief Executive of the British Independent Retailers Association gives his perspective on the continuing resilience and innovation shown by the independent retail sector.

Retail has always faced change. Over the years we have seen independent retailers develop their businesses in very competitive environments and through various economic recessions. Success has been based on innovation, agility of the business model and an ability to meet customer needs. So, what is different now?

The challenges faced by all retailers are due to a dramatic shift in the way consumers do their shopping particularly online which now accounts for close to 20% of all sales and is set to rise.

But despite this societal change we see independent retail businesses succeeding where many major chains have failed. This is because independents have not lost their ability to quickly adjust to a changing market and their customer needs. Innovation is still the key to retail success and in bira we have seen our members diversify and focus on selling ‘experiences’, such as the introduction of coffee areas into shops and a stronger focus on customer service.

Independent retail businesses have also reacted to market trends. Since the Blue Planet television programme highlighted the damage plastics are doing to our environment, we have seen a rise in ‘conscious consumers’, especially within the millennials. As a result, independent retailers have focused on more ethically sourced products using recycled material or natural materials such as wood, bamboo and cork.

However, whilst independents can control their own business and actions, they cannot control what is happening around them. It is very hard to be a successful retailer if you are surrounded by empty stores. Local authorities now need to follow the example of independent retailers by being innovative. This is about changing the use of properties, investment and creating new communities – all of which contribute to increasing the all-important footfall. With this support good independent retailers will continue to prosper.

As CEO of The Giftware Association, I attend over 30 trade shows a year and am heavily involved with our important Gift of the Year competition. This gives me an incredible insight into the trends affecting the home and giftware industry which allows us, as an association, to make some accurate predictions of future fashions.

Each year we change the categories of the competition to reflect those trends in our industry. One of the most important trends that we have seen in the last few years is the increase in the importance of ethical sourcing and awareness of the environment. As a result, this year’s Gift of the Year introduced an important new category focussed on “Fair Trade and Eco-Friendly” products. It has seen more than twice the number of expected entries which reinforces the growth of more ethical and socially conscious gifts that are now available.

We have already seen this with last year’s winners of garden and outdoor category, where ‘Fallen Fruits Limited’ won with their range of environmentally friendly picnicware made of fully biodegradable palm leaves. Our Chairman and owner of ‘Blue Eyed Sun’, Jeremy Corner, has diversified his greeting card company to become one of the UKs only distributor of Bamboo cups, a reusable cup for coffees, cutting down on plastic waste. Another of our Gift of the Year

2018 66,929

2019 69, 420

2020 71, 896

UK DIY, FURNITURE & HOMEWARES SPEND (GBP MN)

Source: Planet Retail Total consumer spend on DIY and gardening products, as well as furniture, independently of the channel the sales are generated through (including VAT and sales tax). Excludes household appliances

Sarah Ward, the CEO of The Giftware Association reviews

the most important trends impacting on the home and

giftware industry.

winners ‘Sunny By Sue’ has also embraced this trend with her beautiful hand drawn decorations to the side of reusable water bottles.

I think companies are really starting to realise that the home and giftware industry has an impact on the environment. Nearly every seminar that you attend at trade shows mentions the keywords ‘David Attenborough’, ‘Blue Planet’ and the ‘plight of the planet’. Companies have been listening and responding with businesses now developing environment-friendly policies and products. One of the areas where I have seen this reflected the most is in packaging. I spoke to a small card company at The Giving and Living Trade show who is utilising corn starch cellophane on their cards which is biodegradable and therefore far less damaging to the planet. This is a trend that will only grow in importance.

Another vital trend area for our members is in understanding the colours and palettes for future seasons. We got fantastic insight into this at our recent trends seminar where we welcomed the creative director of Dulux, Marianne Shillingford, who presented on future colour trends. Colour that is stimulating and known to lift mood’.

The team and I look forward to continuing to share with all our members the future trends that make our industry so exciting.

THE 2019 UK RETAIL MARKET OPPORTUNITY: HOME AND GIFT THE 2019 UK RETAIL MARKET OPPORTUNITY: HOME AND GIFT

£1BILLIONVALUE OF UK GIFT MARKETSource: YouGov survey 2018

£36.50AVERAGE SPEND ON A GIFTSource: YouGov survey 2018

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There is little doubt that the UK fashion market is facing challenging

times and uncertainty looks set to continue in 2019. Tough trading conditions, the impending Brexit vote and low consumer confidence have all impacted retailers and only the toughest will survive.

In the independent sector, The British Independent Retailers Association and Local Data Company found that although 15,340 independents were opened in the first half of 2018, 16,894 were forced to close.

But as the saying goes, when the going gets tough, the tough get going, and independents are some of the most innovative, determined and customer-focused fashion retailers in the UK.

In 2018, Drapers reported on several new independent store openings, including that of kidswear brand Scamp & Dude in Highgate, London, which also won Kid’s Brand of the Year at last year’s Drapers Independents Awards.

North-east England-based independent menswear retailer Master Debonair opened its first London store and has plans to open two further stores in 2019.

Harpenden independent Purple Menswear opened its new 2,500 sq ft lifestyle store, which includes a barber and coffee shop, tailoring to the experiential store trend that is rife in retail to drive footfall back into stores.

The best independents know their customer and buy with them in mind, bringing in new brands each season to provide a unique offer and continue to excite and inspire them. They keep on top of the latest trends, but ensure that they are relevant to their customer and provide some of the best, most personalised customer service on the high street.

Times may be tough, but those retailers that provide a unique product mix, strong multichannel shopping experience and fantastic customer service will continue to not only survive, but thrive.

2018 58, 833

2019 60, 170

2020 61, 493

FASHIONABLY TOUGHITE’s portfolio of fashion shows: Moda, Pure London, Scoop and Jacket Required bring together buyers from across all sectors of the UK fashion industry. What unites them all is the undoubted pressure all retailers have been facing to ensure their businesses meet the needs of the fashion consumer. We ask some high-profile sector experts for their views on what successful retailers are looking for and how they are adapting to the new retail landscape.

It’s an exciting but challenging time as the UK Retail industry continues

to evolve and brands transform themselves to ensure they’re ‘fit for the now’ let alone the future.

Reinvention, reinvestment and differentiation are the priority areas of focus for many brand strategies.

Every brand in every sector now needs to embrace change and be truly authentic and transparent in order to gain customer trust and share of pocket. The millennial generation are leading the charge as the conscious consumer demanding something different, a personalised service and equally as important a brand DNA with strong morals and ethics.

The UK Fashion sector has always been and still is incredibly vibrant and London remains one of the leading fashion capitals of the world.

The UK fashion offering on and off line is now more varied than it’s ever been. Global brands sit alongside small niche labels whilst established global businesses compete with young entrepreneurial starts-ups for share of mind and wardrobe.

The UK consumer is being offered so much choice. Retail formats are changing, pop-ups appearing in the unlikeliest of locations. World leading department stores such as Selfridges and Harrods competing to offer exclusives, personalisation, collaborations and in store experiences only add to the excitement and vibrancy of our UK Retail market today.

Fashion brands now really need a point of differentiation. Many are collaborating, joining forces with other complementary labels to give broader consumer appeal and product offer.

Consumers are demanding and expecting constant newness from brands which in turn puts pressure on supplier relationships.

This pace of change puts a real focus on this vitally important area of the supply chain in order to deliver speed to market to satisfy today’s consumers. Brands need to work with suppliers who are

THE BEST INDEPENDENTS KNOW THEIR CUSTOMER AND BUY WITH THEM IN MIND, BRINGING IN NEW BRANDS EACH SEASON TO PROVIDE A UNIQUE OFFER AND CONTINUE TO EXCITE AND INSPIRE THEM.”

UK CLOTHING, FOOTWEAR & ACCESSORIES SPEND (GBP MN)

Source: Planet Retail Total consumer spend on clothing, footwear, accessories, watches and jewellery (including VAT and sales tax). Excludes sportswear and accessories

Keely StockerEditor, Drapers

Kirsty GinmanGlobal Retail Director,

Consultant and Speaker

THE 2019 UK RETAIL MARKET OPPORTUNITY: FASHION THE 2019 UK RETAIL MARKET OPPORTUNITY: FASHION

flexible and open minded. Great communication, forward planning and joint problem solving is the only way to operate.

Retailers are changing their strategy every 6 months so full transparency and flexibility are required, let alone the pressure on margins given our current heavy discounting culture.

Retailers are reluctant to pass on rising cost pressure to customers, but suppliers say they’re already at the tightest possible margins, so these pressure points need to be worked through together.

Whether you’re a small start-up or established global brand, there’s room in the market for you if you put your customer at the heart of everything you do.

Customers will remain engaged in your brand as long as you keep them at the centre of yours.

It’s never been a more exciting time in the UK Retail Market ….

Kirsty Ginman is a Global Retail Director, Consultant and Speaker and former Director of International Partnerships at New Look and Head of International at Fat Face.

16.5%GROWTH IN UK ONLINE FASHION SALES 2017-2018BIGGEST GROWING SECTORSource: ONS

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2% PER ANNUM13.1% £5.7BILLION

GREEN SHOOTSIN GARDEN RETAIL

Analysis Report. AMA Research say that this will grow by two per cent per annum between 2018-2022. The Horticulture Trades Association estimates that there are 2,300 garden centres and retail nurseries serving this market with the big DIY players leading the way and B&Q taking the biggest share.

With the competition from the DIY sheds, traditional nurseries and garden centres have not only consolidated but also diversified to include far wider ranges of products and services related not just to the garden, but outdoors, garden buildings and furnishings, gifts and seasonal products. The biggest chain of garden centres is Wyevale but this is currently being reduced as it sells centres as part of its recovery plan.

A key part of the economy underpinning the garden products sector in the UK is the housing market. Whilst this is currently slowing down with economic uncertainty, the older home owners have great financial security and tend to spend on their gardens. Demographically, the millennial consumer in the UK is struggling to own their own property so continue to rent flats and smaller houses but this opens-up potential for smaller garden products, pots and containers.

Millennial consumers are taking a fresh look at gardening and see it differently from their parents’ generation. Iconic figures such as Kate Moss and Alexa Chung have helped the trend with their declared interest in gardens and visits to Chelsea Flower Show. But this digitally-aware generation are also using the internet to learn more and to discover what they can grow in pots, balconies or small gardens. According to Wyevale Garden Centres, Garden Trends Report 2018, 67% of consumers now get their gardening information from the internet. And this new generation of gardeners see growing-their-own, healthy living and urban gardening as an increasingly part of their lifestyle.

This can already be seen in the boom in grow-your-own products such as vegetables which have increased 30% and herbs by 21% in the last five years. It is a trend that UK garden retailers are already responding to.

UK garden centre retail has been shaped by

its resilience to many factors but continues to

growand innovate.

Matthew Appleby Deputy Editor, Horticulture Week

JEWELLERY LOOKS TO SHINE

Jewellery retailers are returning to traditional skills to win customers but are also seeking out exciting new product reports Ruth Faulkner, Editor, Retail Jeweller

Retail has faced its most challenging conditions over the last 12 months and the jewellery industry has not escaped unscathed.

The year got off to a bad start in 2018 with many jewellers citing deep discounting of branded jewellery and watches by online players and multiple retailers.

The Pandora phenomenon, while by no means over, has certainly slowed down and other fashion jewellery and watch brands have suffered a similar fate.

Many retailers have therefore refocused their business models and placed a renewed emphasis on service, offering customers the opportunity to have bespoke jewellery made or old pieces of jewellery remodelled. There is also a trend for retailers to create own brand collections and to source from white label suppliers who will allow them to brand product as their own.

SUPPLIER COUNTRIES, SKILLS IN DESIGN AND PRODUCTION QUALITY, DELIVERED AT LOW-COST, ALLOWS UK RETAILERS TO FOCUS ON THE BUSINESS THEY KNOW THE BEST: SELLING TO THE CUSTOMER”

In this current market, the key factors are “service”, “quality” and “value” and jewellers are increasingly looking for higher value product that will stand the test of time. This has been a trend that continued throughout 2018 and shows no sign of slowing any time soon with most jewellers reporting that, while footfall is down compared to a year or two ago, average order value is up.

With a renewed focus on service, the gulf between the most successful jewellers and those who are struggling grows ever wider. Those who continue to listen to their customers, innovate and offer something new or different are thriving, even in what remains tough times for retail generally.

Those who continue to do the same thing they have always done will struggle, if they are not doing so already. The traditional high street jeweller simply cannot compete with online competitors on product choice or price and the only way they can survive is by offering a service which can’t be replicated digitally.

THE 2019 UK RETAIL MARKET OPPORTUNITY: JEWELLERY AND WATCH THE 2019 UK RETAIL MARKET OPPORTUNITY: GARDEN AND LEISURE

To be a UK retailer in today’s world means you have to navigate between the challenges of the economy and the transformation of the sector. But to be a retailer in the garden sector means you have to navigate all those forces plus Mother Nature. More than any other sector of retail, the unpredictability of the weather can make or break a retailer’s year.

In February 2018, the UK was hit by the “Beast from the East” that brought with it snow and blizzards that lasted for weeks. In February 2019, the UK enjoyed very early Spring weather that was warmer than Athens.

Despite these underlying factors, the garden products sector remains a sizeable and an important part of UK consumer spending that is estimated to be worth £5.7 billion according to the 2017 Garden Market

Source: AMA Research

GROWTH OF UK GARDEN PRODUCTS MARKET 2018-2022

Source: GlobalData

GROWTH OF UK JEWELLERY AND WATCH MARKET 2016-2021

Source: Garden Market Analysis Report

VALUE OF UK GARDEN PRODUCTS SECTOR 2017

1110

WHAT HAS DRIVEN THE UK DIGITAL REVOLUTION? THE MILLENNIAL CONSUMER: the bulge of younger consumers brought up surrounded by technology and the internet is now re-shaping shopping, leisure and the workplace. Today’s consumers are in the driving seat and are setting demands for the products, prices and delivery they want.

THE SMARTPHONE: the arrival of the iPhone in 2007 has brought powerful technology and fast access into the hands of consumers and the UK has embraced mobile commerce wholeheartedly. M-commerce sales rose to £29 billion in 2018 from £25.47 billion in 2017 according to Statista.

NEW ONLINE RETAILERS: who have disrupted the traditional retail model and educated consumers to expect and demand a new kind of retail experience from Net a Porter in the luxury sector to Asos in fast, young fashion and Ocado in food amongst hundreds of others. Plus Amazon of course.

EASY CREDIT, EASY PAYMENTS: the UK consumer has always been enthusiastic users of credit cards and now contactless payments. Low interest rates and high credit card ownership have made online shopping easier and convenient.

BOREDOM WITH STORES: the boom in retail floorspace meant that every high street ended up looking the same with little or no variety. Consumers became bored and uninspired. The internet disruptors brought back excitement, variety and a world of options at the lowest price.

A WINNING CHECKLISTWith the UK consumer firmly in the driving seat, all retailers, even pureplay ones, must deliver on a new range of factors if they are to succeed:

EXCITING, ORIGINAL PRODUCT

A BRAND THAT STANDS FOR SOMETHING WHICH YOUR TARGET SHOPPER CAN RELATE TO

BE INNOVATIVE IN ALL WAYS: FROM PRODUCT, TO STORES, TO THE USE OF TECHNOLOGY

PROVIDE GREAT SERVICE

BE FAST TO MARKET WITH IDEAS

SUPER-FAST DELIVERY TO CUSTOMERS

STORES THAT PROVIDE A CURATED RANGE AND COLLECTION – STORES SHOULD NO LONGER BE WAREHOUSES ON THE HIGH STREET

A SEAMLESS EXPERIENCE BOTH ON AND OFFLINE

BE COMPLETELY CUSTOMER-CENTRIC

FOR THE LOVE OF ONLINE SHOPPING

reeling from retail company collapses, it would be easy to say that the future of retail looks bleak. However, that would be completely wrong. The UK consumer still loves to shop. They might be temporarily chastened by Brexit uncertainty, but they continue to spend with the brands they like and trust. Consumers love to shop, but they now love to shop online as much if not more than in-store.

As a result, the UK now leads the world in online shopping and it is transforming the way the industry looks and works.

It now accounts for 17% of total retail sales in the UK according to Planet Retail and forecast to rise to 17.9% in 2019. That figure is higher in certain product sectors and for certain retailers. In fashion sales, online has been growing in double digits whilst overall the sector has been growing in low single digits. According to Mintel, in 2017, online fashion sales accounted for 24% of the total sector. And whilst much of the growth has come from the “pureplay” retailers, the impetus for such a shift online across UK retail is all down to consumer. The UK consumer is adopting new technology ever-faster and is rejecting many of the old, established retail formats and brands in the search for choice, price and convenience.

UK consumers love to shop. Since the 1980s, despite the various economic cycles, consumers helped create a retail revolution. Driven by rising prosperity, consumers splashed out on everything from fashion to electrical goods, food to entertainment and the booming housing market meant that spending on homewares and DIY rose to levels never seen before.

The spending saw retailers and retail property owners respond with an explosion of new formats and retail destinations. Shopping centres, edge-of-town, out-of-town, outlet centres and resurgent town centres all emerged during the 80s and 90s to meet the demands of the UK consumer.

That retail “space race” as it was dubbed by the then CEO of Tesco, Philip Clarke, gave the UK one of the highest densities of store space per head of population in the world, eclipsed only by the US. But just as retailers were building up to the frenzy of more and more store openings, a new era was dawning that consumers began to embrace tentatively and then wholeheartedly.

This was the start of online shopping in the mid-1990s but which really began to take-off from the time of the 2008 economic crisis. Surveying the UK retail landscape in 2019, with many town centres devastated by shop closures and the retail industry

The UK continues to lead the world in online shopping. UK consumers have converted to be some of the most enthusiastic digital shoppers but despite the challenges that has brought to established retailers, it is now giving birth to an exciting new era for the industry.

AS A RESULT, THE UK NOW

LEADS THE WORLD IN ONLINE SHOPPING AND IT

IS TRANSFORMING THE WAY THE

INDUSTRY LOOKS AND WORKS.”

THE 2019 UK RETAIL MARKET OPPORTUNITY THE 2019 UK RETAIL MARKET OPPORTUNITY

Source: ONS

ASOSVOTED THE UK’S BEST

ONLINE RETAILER FOR DIGITAL PROFICIENCY

Source: Salesforce

75%OF UK CONSUMERS

WHO RESEARCH ONLINE BEFORE BUYING

1312 THE 2019 UK RETAIL MARKET OPPORTUNITY

ADAPT OR DIE The UK consumer is firmly in the driving seat which means that all retailers and brands have to take note of the trends and influences that are impacting shoppers. We asked consumer trends expert, Sean Pillot de Chenecey, to highlight the key issues retailers should take note of in 2019.

Brands have been impacted as never before by issues which are destabilising virtually every sector. However, these issues also offer dynamic opportunities for those brands and organisations nimble and committed enough to take action regarding this #NeverNormal situation. By doing so, they will do the ‘right thing’ on both a community and shareholder level, illustrating the fact that, in 2019, good business is indeed, good business…

Of all the multitude of trends and issues that businesses need to note, the following two stand out as the most demanding of immediate and ongoing action:

AUTHENTICITYBusinesses want to have strong and long-lasting relationships with their consumers. That brand-consumer relationship is built on trust, but in a post-truth world retailers are faced with a serious challenge: so much of modern life is defined by mistrust.

A post-truth culture is impacting brands, across an array of business sectors, on a global basis and is radically reshaping international brand perceptions. What seems clear is that the way to achieve credibility is to act in a manner that deserves it. On a retail level, that goes as much for the fashion-outlet in Dubai or the luxury jeweller in Beijing, as it does for the home-furnishing store in London or the car showroom in Los Angeles.

A famous quote from The Economist is that “consumer trust is the basis of all brand values, and therefore brands have an immense incentive to retain it”. And as Jack Ma put it so succinctly “once you have trust, the rest is easy”.

However, these statements are set against a harsh reality illuminated by a much-cited industry report from the Havas agency, which noted that “much of the trust, respect and loyalty people had for many brands has disintegrated. You see it in the level of cynicism, scepticism and indifference that people have towards them”. So, for brands today, trust and truth are the most important games in town.

THE 2019 UK RETAIL MARKET OPPORTUNITY

SUSTAINABILITYCompanies are, quite rightly, blamed for issues like plastics in the oceans, chemicals in our bodies and an increasingly polluted atmosphere. Meanwhile, a tragic but only too real fact is that time is running out when it comes to sustainability. The UN-led IPCC noting that we have merely twelve years to take strong action in order to avert some of the more dreadful impacts of climate-change, so businesses of every description need to take note. Their actions, discussed at events like COP24, also need to reflect a strong surge in consumer sentiment: more and more people want to feel morally good about the things they consume.

The stark realities of the absolute need for focusing on a sustainable future gave rise to the vital concept of the circular economy. This connects brands, and brand communities, directly to an ethos where ‘re-use & recycle’ is an alternative to a traditional linear economy of ‘make, use, dispose’. Brand and retailers are therefore

Sean Pillot de Chenecey is an insights/innovation/strategy consultant. His book ‘The Post-Truth Business’ is currently No1 in the business-book charts. His next book “Influencers & Revolutionaries” focuses on leading-edge innovation. www.brandpositive.org

THE STARK REALITIES OF THE

ABSOLUTE NEED FOR FOCUSING ON

A SUSTAINABLE FUTURE GAVE

RISE TO THE VITAL CONCEPT OF

THE CIRCULAR ECONOMY.”

BUSINESSES WANT TO HAVE STRONG AND LONG-LASTING RELATIONSHIPS WITH THEIR CONSUMERS. THAT BRAND-CONSUMER RELATIONSHIP IS BUILT ON TRUST...”

taking action on a business-wide basis, ranging from the most obvious (store-waste reduction) to aiming for carbon-neutral supply chains & net-zero emissions across the business.

This most-vital of issues is of particular concern to environmentally and socially conscious Millennial and Gen Z ‘global consumers’ who are really driving change via their ‘GenMe/GenWe’ perspective, having grown up in a world where these issues have been discussed by the news media on an almost 24/7 basis. They evidently understand the issues more than their elders, and are demanding that businesses take strong an effective action.

89% OF CHILDREN age 6-10 believe Alexa always tells the truth”MIT Technology Review, 2017

SUSTAINABILITY IS NO LONGER JUST A TREND, it’s a business imperative”Global Fashion Agenda

IN THE PAST FEW YEARS we have seen a huge increase in consumers who believe that brands should disclose their manufacturers and the origin of their raw materials”Orsola de CastroCo-founder, The Fashion Revolution

Source: ONS

UK= 3RD LARGEST

MOBILE COMMERCE MARKET IN THE WORLD

Source: Statista

5.7%COMPOUND ANNUAL

GROWTH RATE OF ONLINE SALES 2019-2023

1514

AGILITYAgility remains an underdeveloped capability within many supply chains, but it’s becoming a key differentiator for those winning in today’s new retail landscape. Agility relates to organizational responsiveness, and an agile supply chain is one that’s shorter, more flexible, and demand-driven than traditional supply chains, which are more forecast-driven and marked by high levels of inventory. Visibility of information is critical to agility and allows participating parties to become more responsive to changes within the market. So in order to be agile, the supply chain needs to remain transparent and communicative across the entire product lifecycle, from ideation to sourcing, order management to store delivery. International fashion retailer, Zara, is the perfect example. The company is famed for its ability to get products from catwalk to store shelves in under 21 days, a process that’s completely driven by its responsive, data-driven supply chain.

COLLABORATION Agility and collaboration go hand in hand; you can’t have one without the other. And at this stage in the retail revolution, retailers and suppliers should know collaboration is the ultimate key to success. When both parties work together to share product information, the result is increased efficiency and a boosted bottom line. Take apparel mega-brand American Eagle, for example. With more than 500 vendors in 29 countries, the company needed to replace its antiquated sourcing and order management systems to unify product design, sourcing, and merchant processes across its internal organization. After implementing a single source of truth with the Bamboo Rose multi-enterprise supply chain platform, the company was able to gain complete visibility into factory readiness of its product eight days earlier than average, plus streamline operations across all channels.

Collaboration also allows retailers to tap into suppliers’ ideas and advice on trends, markets, and big initiatives suppliers gauge across their retail base. With this joint effort, retailers can speed up time to market, stay on top of trends, and make more profitable operational decisions.

Recognising the importance for retailers to be able to find and discover new product and great new manufacturers that deliver a real point of difference, Autumn Fair is to launch a special area dedicated to sourcing. But how should retailers go about talking direct to manufacturers from around the world? Simon Hathway, shares his Four Rules of Success.

So what can you, the buyer, do to secure sourcing success in the future? It all comes down to these four things:

The phrase “Verrassend voordelig, verbazend voordelig” is tattooed on my brain. It’s Dutch, and it means, “Surprisingly complete, amazingly affordable.” It was the tagline for the retailer, Action, where I worked as Commercial Director for almost five years. For those who don’t know, Action is a non-food discount retailer with more than 1,300 stores across Europe. In fact, this magic formula of surprising products at very low prices has helped grow Action from its humble beginnings into the four billion-plus Euro business it is today, serving over eight million customers every week.

During my tenure at Action, I honed my skills in the art of successful sourcing. Of course, a major

Sources: nielsen.com, forbes.com, ethicaltrade.org

Simon Hathway has over 20 years of international retail experience and was most recently (2013-18) Commercial Director of Action, one of Europe’s fastest growing non-food discounter. He now runs his own consulting business, Retailise, as well as being a non-executive Director to Bamboo Rose, retail’s only multi-enterprise product and supply chain platform.

SOURCINGFOR SUCCESS

IN A RAPIDLY CHANGING RETAIL ECOSYSTEM WHERE RETAILERS AND BRANDS COMPETE FOR TOP-OF-MIND AWARENESS AMONG CONSUMERS, THE NEED FOR EFFICIENT SOURCING IS MORE IMPORTANT THAN EVER.

TRANSPARENCY Transparency is critical on many levels. For one, retailers need to know from where, exactly, their products and materials originate, as well as the conditions under which products are made. And two, consumers—especially younger ones—are equally concerned. A 2015 Nielsen survey found 72 percent of Generation Z consumers were willing to pay more for products from companies committed to positive social and environmental impact. Issues like child labour or palm oil-based formulation have caused past reputational damage to leading brands like Apple, Nestlé, and Primark. The answer, according to Jonathan Webb of Forbes Magazine, is simple: “Companies that can provide competitive advantages in the future may be the ones that provide full breakdowns of the supply network of the items on shelf.”

SUSTAINABILITYA buyer’s gold mine lies in (1) identifying suppliers who practice sustainable, environmentally-friendly practices, and (2) establishing continuous, trustworthy relationships with these same suppliers. In other words, sustainability isn’t just an environmental consideration; it’s also a commercial one. The cost and risk of supplier turnover is becoming increasingly high, and buyers need to be careful about choosing manufacturing partners. In 2015, Ethical Trading Initiative conducted a survey among factory suppliers, and 39 percent of respondents admitted they’ve accepted orders well below the cost of production, which increases the risk of poor quality and social practices. That’s why it’s so important for buyers to understand the production process and ensure suppliers are able to invest in sustainable production and innovation. With complete transparency across the supply chain, there’s more assurance in both aspects of sustainability.

THE 2019 UK RETAIL MARKET OPPORTUNITY THE 2019 UK RETAIL MARKET OPPORTUNITY

component to that was learning how to discover new products at low costs. But I also found it requires a particular savvy beyond the fundamentals. It requires agility, collaboration, transparency, and sustainability throughout the product lifecycle. And in a rapidly changing retail ecosystem where retailers and brands compete for top-of-mind awareness among consumers, the need for efficient sourcing is more important than ever. In order to improve time to market, gain better control of stock levels, and maintain a fresh flow of new, distinctive items, retailers have to streamline their supply chain and provide transparent, simultaneous communication across all parties.

294,280TOTAL NUMBER OF RETAIL OUTLETS IN THE UK 2017Source: ONS

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