The New Year’s resolution for retailers must be a robust digital strategy

As retailers head into the new year hoping for a better year than 2021, Graham Tricker writes that shops needs to start embracing e-commerce and a digital strategy if they are to succeed and grow their businesses.

After 2021 saw a year of upheaval for UK shops, retailers endured another disappointing Christmas sales period. A recent CBI survey reported a decline in retail sales in December, spurred on by fears of the Omicron variant, disappointing hopes of an uptick in festive sales. Amidst other mounting pressures, like increasing inflation and increasing interest rates, retailers are set up for a particularly tough start to the year.

While this news represents another blow in the tumultuous couple of years that retailers have had to endure, their potential path back to prosperity remains the same. Although the pandemic may have underlined the need for digital transformation more sharply than ever before, retailers should be prioritising robust digital strategies in order to strengthen their businesses no matter what obstacles they may be facing. With the future continuing to look uncertain, it is more crucial than ever that brands use this January 'reset' period to take stock and make their offerings more sustainable.

At the heart of this for retailers is digital transformation. Shopkeepers must ensure they have a robust digital strategy with first-party data at the heart of their operations heading into the new year. The British high street is not dead and there is certainly still an appetite for the community it creates within our towns and cities, but retailers must be prepared to adapt to the latest changes and to make sound strategic decisions.

In this environment, data has emerged as one of the most powerful assets to businesses in 2022.

Almost a third of business leaders in retail and hospitality believe the future growth of their sector depends on better data to enable them to identify the products that are most popular, reach more customers, and focus their marketing. So how can the UK retailers we know and love make sure they retain their place on the high street this year? Through the ethical use of customer data to better understand and engage their customers, enabling them to survive and thrive.

At a fundamental level, using first-party data gives potential for better marketing and faster growth. This means retailers must leverage everything in their power to decipher the behavioural, demographic, and other characteristics of their customers, to find better ways to engage them and sell to them, while still respecting and upholding their privacy and preferences.

Retailers who can combine insights from in-store shopping and e-commerce sales can benefit from deeper and more useful insights. For example, this might allow a beauty retailer to gain a better understanding of one of their typical customer journeys – from exposure to an online advert on their website, to a purchase in-store. This will help them to create more effective marketing experiences that better serve their customers, and also progresses sales and customer loyalty. The end result is more data about the retailer's customers that can be used to further improve customer experience.

Retailers who do have in-store space can share the benefits and insights derived from their in-person presences with the brands they work with. Take this as an example – a fashion brand that is stocked in a department store, but doesn't have its own physical retail space, can partner with the department store to connect their data using a secure, privacy-first, neutral third-party environment, to find out the demographic of who is buying its clothing – while retailers can determine which items are the most popular. This enables a number of outcomes for brands and retailers, in particular enabling the fashion brand to reach out to similar customers.

In today's modern world, everyone has data – but retailers and brands may be holding themselves back by relying on data that is incomplete, siloed, or ineffective. Partnering with other brands represents the pinnacle of effective digital marketing – whether you're a brand or a retailer. Brands and retailers can collaborate with each other to gather insights and transactional data to boost their data insights even further.

Above all, retailers and brands can use the data they gain to power a superior experience for customers, both current and new – and be ready for whatever obstacles the market may hold. By understanding customers and adjusting digital marketing strategies to deliver the experience they want, engagement – and sales and long term growth – will follow.

Often in times of economic uncertainty, there is an opportunity to thrive in the face of adversity. It is more crucial than ever for retailers not to rest on their laurels, but to review their digital strategy, examine their existing data, and refine their strategies to generate more of it.

Now is the time for the high street to realise the value of their data, both online and in-person, and to consider how they utilise it for their growth and success in 2022.