January ONS retail stats: results reveal momentous boost for retail
“Investment in predictive technology, such as AI, and translating those learnings into meaningful outputs will ultimately drive brands forward in 2019”
When the Office for National Statistics (ONS) released the retail figures for January last week, I’m sure I wasn’t the only person to breathe a sigh of relief. For a sector that undergoes scrutiny on a daily basis for its supposed ‘struggle’, it is encouraging to see the sales rise by 1 per cent after falling by 0.7 per cent in December – a 4.2 per cent increase on January 2018. The results surpassed economists’ expectations and became one of the biggest annual rises in sales for more than two years.
The Brexit effect was of course high on the agenda for commentators, with many suggesting that shoppers are making more purchases in anticipation of possible stock limitations or price increases when Brexit hits on 29th March. However, while the discussions of a possible no-deal Brexit continue, long-term implications remain to be seen.
Looking more closely at the results, clothing and footwear excelled ahead of the pack, recording a strong year-on-year growth of 5.5 per cent, with many analysts suggesting it is the result of clever offers. Rhian Murphey of ONS summed it up when she said: “clothing stores saw strong sales, luring consumers with price reductions, with food sales also growing after a slight dip after Christmas.”
The boost for fashion and footwear is welcome, but with the volume of goods purchased at a discounted rate at an all-time high, some may say that is self-harm for retailers. What we need to see now is more focus on long-term sustainable growth and investment in the right areas to achieve it. That means short-term tactics for sales should no longer be the merchandisers or marketers go-to strategy for attracting customers, rather focus on introducing new tactics and technologies that compliment evolving customer behaviour.
This year, we’ll start seeing the impact of fashion retailers’ investment in personalisation, with some forward-thinking organisations already reaping the rewards. Take our customer,Footasylum, for example – by working with Peak to become an artificial intelligence (AI)-driven retailer, the company has seen an impressive 28 per cent increase in email revenue from hyper-personalised marketing communications.
Investment in predictive technology, such as AI, and translating those learnings into meaningful outputs will ultimately drive brands forward in 2019, while building future value in the retail sector which, in turn, will stabilise the volatility we’ve seen over the last few years. Couple this with the Brexit effect and one thing is clear: retail has a transformational year ahead.
Download Peak’s AI Opportunity for Retail report here: peak.ai/ai-opportunity-for-retail
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