The Retailer Autumn Edition 2022

AUTUMN 2022

How retailers can act in the face of recession RETAIL TODAY AND TOMORROW

How consumer behaviour is shaping retail DIGITAL TRANSFORMATION

SUSTAINABILITY

PAYMENTS AND SECURITY

BRC on retailers cutting carbon emissions by tens of thousands of tonnes

How the evolution of payments and fraud add to the pressure of high inflation and the war in Ukraine

BRC Retail Masters 2023 06 – 09 March 2023

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SUSTAINABILITY MUST REMAIN AT THE HEART OF RETAIL

Helen Dickinson OBE Chief Executive British Retail Consortium

The UK is in the grips of a cost-of-living crisis, driven by high inflation and soaring energy prices; a result of both the pandemic and the ongoing war in Ukraine. UK inflation hovers around 10%, a 40-year high, with some experts suggesting it could go far higher the coming year. And it is not just economic turbulence that is rocking the UK, but political too, Britain has its fourth Prime Minister in just four years – as well as the death of Her Majesty the Queen. Consumer confidence has fallen to a level below the 2008 financial crash and the worst effects of the energy crisis still to come as the nights get colder. It is unsurprising that this turbulence is now being felt right across the UK retail industry – its three million employees and the £400bn in spending it generates each year. Despite the intervention on energy prices, pressure on households continues to build. While the government has capped the energy rise at 27%, with protections from further rises for two years, this still represents a doubling of energy bills since October 2021. Meanwhile, mortgage rates have been steadily rising and food prices continue to increase. Sadly, this will mean too many households being forced to make the devastating choice between ‘heating or eating’ this winter. As a result, retailers are likely to see consumer demand struggling to keep up as we approach the Christmas period. At the same time, businesses face rising costs throughout their supply chains. This includes their own rising energy bills (mitigated somewhat by the six-month cap), higher commodity prices and increased transport costs, in addition to a tight labour market. Understandably many retailers are looking for more ways to cut operational costs, as they work hard to protect consumers from the worst of these cost-pressures. Many operations are being stripped back to the bare essentials in a bid to remain competitive. But there is one area that retailers must not be tempted to cut – sustainability. Putting sustainability at the heart of business operations is not a marketing ploy. It is not virtue signalling. It is not a nice-to-have. It is a vital part of the solution for firms. From reducing pack aging to green fleets, and from solar panels to cutting food waste – we are seeing essential actions that will not only help the country tackle climate change but will help to reduce energy use and cut future costs. The BRC recently ran its own Climate Action Week, celebrating the amazing work already being done by retailers to tackle climate change. The week provided an amazing opportunity to share some of the best practice needed to move the industry to Net Zero by 2040 – our target under the Climate Action Roadmap. It included webinars on cutting emissions and saving energy; reports on moving consumers to more sustainable choices; and the inaugural Climate Action Roadmap Showcase. The Showcase celebrated the achievements of retailers in reducing their carbon emissions and improving sustainability. Our judges, including experts from WWF and WRAP, selected some amazing case studies from across our retailers to highlight at the awards. Yet even these are just a drop in the ocean of what is needed if we are to play our part in lim iting global temperature rise to 1.5°C above pre-industrial levels. In 2017, the full lifecycle of the sector’s sold goods had a footprint of around 215 million tonnes of CO2-equivalent – over 30% of all household greenhouse gas emissions. Both the responsibility on the industry, and our opportunity to make a difference are enormous. So, while retail faces an enormous challenge in the form of the current economic and geopolitical landscape, we must not miss the wood for the trees. The cost of living crisis will be here to stay for months to come, but the climate crisis could be here forever unless we act now.

‘‘

The UK is in the grips of a cost-of living crisis, driven by high inflation and soaring energy prices; a result of both the pandemic and the ongoing war in Ukraine.”

THIS ISSUE

RETAIL TODAY AND TOMORROW

06

It’s the most wonderful time of the year… Hannah Holland // Britannia Bureau Ltd

22

08

Tales from the shop floor - How retailers can act in the face of recession Dan Coen, Richard Harrison // AlixPartners

10

Hidden gold at the end of the cross-border rainbow Chris Field // Retail Connections

DIGITAL TRANSFORMATION

12

Guernsey’s post-pandemic revival and the allure of the high street Korinne Le Page // The Guernsey Retail Group

16

Going shopping to always shopping - how consumer behaviour is shaping Retail Katy Clark // Meta

14

It’s time for retailers to work together to tackle domestic abuse Chris Brook-Carter // Retail Trust

18

How Data & Analytics Can Unlock Sustained Growth for Retailers Mike Withey // WNS

20

The Race to Upskill the Retail Sector in Data Science Robyn Hamilton // Cambridge Spark

22

Retailers who digitalise own brand platforms will be the winners of tomorrow Kim Bach // Encodify

24

Ten tips for entering the metaverse Oliver Bray // RPC

26

Retail’s Wake-Up Call: Future Trends in Retail Digital Transformation Erika Arena // Mendix

28

THE BUILD VS BUY DECISION ISN’T ALWAYS CUT AND DRY Joe Till, Sales Director, Uk & Nordics // Onestock

12

30

Loyalty beyond the loyalty scheme Sophie Birshan, Anna Sawbridge // Google

SUSTAINABILTY

32

RETAILERS CUTTING CARBON EMISSIONS BY TENS OF THOUSANDS OF TONNES Nicki Hunt / BRC

PAYMENTS AND SECURITY

34

Payment Orchestration: unlocking cost-effective Ecommerce for merchants in a multiple payment provider ecosystem Alessio Damonti // Axerve

36

What will Visa’s Compelling Evidence 3.0 mean for your business? Ronan Lemestre // EMEA Accertify

38

How can you protect yourself from a cyber-attack? Think like a criminal Sandeep Sharma, Alexandra Miller // Mazars

40

Retailers will face more than the usual challenges during holiday 2022 Ed Whitehead, Managing Director, Europe // Signifyd

42

SPOTLIGHT INTERVIEW Hannah Regan // BRC

44

THE RETAILER Digital Hub // BRC

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IT’S THE MOST WONDERFUL TIME OF THE YEAR…

Hannah Holland Marketing & Admin Assistant Britannia Bureau Ltd

W hile most consumers see December 1st as the start of the festive period, the retail sector starts ‘decking the halls’ in September.

1. Our Customs Health check Our short questionnaire works as a non-disclosure agreement. You let us know some basic details about your business like your Duty and VAT Spending and we in turn will assess your needs and return the outline of a plan for moving forward. As some of you know, our key focus is to add value. We strive to understand where you are currently, what you need to progress and how we can assist you. 2. Feedback of Results Once we have reviewed your Health Check, we will assemble a team to investigate your operational processes. They will then be able to identify key areas of process improvement, to make sure you are making the most out of your Supply Chain. Alongside process improvements, we will present you with opportunities for effective savings and discuss the cost to deliver. 3. Implement and Manage Once your contract has been outlined, we will assign you a customer care team to implement and manage the new processes. Your data will go through rigorous testing to ensure a smooth transfer, and we will prepare you a detailed SOP (Standard oper ating procedure) to ensure everyone is kept up to date with the changes. Your customer team will then discuss ongoing manage ment tools and discussions to ensure we continue to improve things, for you. 4. Ongoing compliance and Improvement Now we focus on consistency and compliance, making sure the new changes are flowing smoothly and are optimised for your business needs. This new stage involves high quality management reporting, and continuous discussion of new goals and business relationship development. It really is as simple as that. Just 4 steps to ensuring your business is making the most out of it is Supply Chain and Customs Procedures to guarantee your consumers smoother Christmas periods. Investing in your Customs Procedures will give you back control and a well rounded visibility. Additionally, there is the potential for unlocking significant bottom line improvements and cost flow advantages, all great for increased shareholder value! With the Covid Hangover, issues from Brexit still lurking and the imminent Cost of Living crisis, Supply Chain has faced every challenge imaginable. Let Britannia work some festive magic, and re-shape your Customs Processes for an endless future of very merry Christmases. “As an independent, ‘free-from-freight’ company, we have a willingness to work in collaboration with all relevant stakehold ers to explore and implement the most resilient solutions for your business.” ‘‘

Honestly, I don’t think it’s ever too early to start planning for the festive season. Want to put up your tree in October? Go for it. You feel like playing ‘Driving Home for Christmas’ by Chris Rea whilst you’re on the way to a summer BBQ? I support that. Andwhen it comes to your Supply Chain and Logistics…Christmas starts in September. For retail, it really is the most wonderful time of the year. Busy, but wonderful. Let me take you back to Christmas 2021. Omicron was in the air, with PM Boris Johnson announcing the emergency booster program. And whilst many sectors began to re-open, NHS Covid Passes and masks were made compulsory in most venues. For many of us, after ‘The Quiet Christmas of 2020’, it was a chance to deck the halls to the fullest! But this year brings the added pressures of the cost-of-living crisis. This Golden Quarter is going to see a shift in consumer shopping habits, with more of a focus on “making a little go a long way” - according to Will Higham, Next Big Thing . Although the British Retail Consortium KMPG saw an increase in spending by 1%, when you factor in inflation, sales volumes are declining. However, with the upcoming global events such as theWorld Cup and the madness of Black Friday, will this increase spending habits to get back to a sense of normality? With this perfect storm of uncertainty looming, there is no room for error. Behind the retail sector sits the most important element to your busi ness: Logistics. You may have the prettiest dresses and best deals on the market, but with no Logistics, your business stops. The toughest problems facing the Retail industry surrounding Logistics are prompt delivery times, unexpected stock levels, returns, the list goes on. According to The Raconteur, 43% of global consumers were unable to purchase a product due to it being out of stock, and 42% had their product delivered after the quoted delivery date . All these pain points can lead to lack of consumer trust, poor customer experiences, and maybe even loss of future purchases. But with so many moving parts to consider and an endless list of compliance laws to adhere to, where do you begin? This is where we come in. Over the past 12 years, Britannia has gathered from across the UK industry specialists to create a business bursting at the seams with knowledge surrounding Customs Management and International Supply Chain. And all those years ago, when it was simply 2 Customs clerks with 1 computer between them, our first customer was in Retail! Fast forward to now, this same customer is one of the most successful online fashion stores globally. So, we came up with a simple 4 step process to guide you and your business into a new wave of Customs Compliance.

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Customs Health Check A short questionaire to assess your businesses needs.

Feedback of Results Review your processes to identify areas of improvement

Implementation Assign you a Customer Care team and impliment new processes.

Hannah Holland hannahholland@britanniabureau.co.uk

Compliance Regular check ups to assess compliance and agree new goals.

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TALES FROM THE SHOP FLOOR - HOW RETAILERS CAN ACT IN THE FACE OF RECESSION

Dan Coen Managing Director AlixPartners

Richard Harrison Director AlixPartners

Matt Clark Managing Director AlixPartners

Clare Kennedy Managing Director AlixPartners

D ouble-digit inflation, rising borrowing costs, falling consumer demand sitting alongside the constant need to innovate, ESG concerns, supply chain challenges - you could could forgive Retailers for feeling like the world is against them at present. And the challenges don’t look to be abating anytime soon. With inflation predicted to peak at 13% by the end of the year, and with rises in the BoE base rate likely, consumer spending will be supressed further. Despite attempts by the (now-ex) Chancellor Kwasi Kwartang’s ‘mini budget’ to simulate growth, consumer spending is anticipated to reduce with Helen Dickinson, (CEO, British Retail Consortium) noting “consumer spendingwill be considerably constrained this winterwith inflation continuing to climb and energy bills rising further.” In fact, in recent times consumer confidence has only been lower during the 2008 financial crisis, and will likelyworsen over the coming months as the realities of rising energy, mortgage, and general inflation are felt by consumers.

Alongside the external market forces taking shape, the shift in consumer behaviour and demand is accelerating, creating newmarket dynamics that are difficult for retailers to predict, manage and strategically approach. “Metail” is on the rise, and consumers are constantly regrouping and changing according to social trends, identity politics, personal whims, and even time of day. So, given the tsunami of challenges facing the sector, what actions can UK retailers take now to weather this impending storm? The winning formula dominating board room agendas at present is a combination of “Back to Basics”, and the need for agility. Inventory - Back to Basics Retailers and brands are turning up the spotlight on inventory man agement best practices. With huge uncertainty clouding near term picture, there is an enhanced focus on investing and instituting the right processes, tools, and organisational structure to support the teams making the buying decisions to be proactive in inventory positioning before inventory becomes an issue. This required investment in forecasting processes that leverage AI, optimised open-to-buy, and developing tools for the teams to better develop buy quantities. Knowing your customers to understand demand forecasting trends, aligning up front before buys are put in at a corporate planning level, and then having the ability to ‘fast-source’ to react to demand all require agile decision-making. Inflation & supply chain – a double ‘whammy’ Cost inflation and supply chain disruption have continued to be an ‘existential’ crisis for retailers. It comes as no surprise that in our recent Turnaround and Transformation Survey, inflation and supply chain were cited as the top factors driving distress, with inflation the number one long-term challenge facing the global economy.

Consumer Confidence Index

104

102

100

98

96

94

Supply chain 37% 30% market inflation

what is the top factor driving distress?

92

Jan-19

Jul-19

Jan-20

Jul-20

Jan-21

Jul-21

Jan-22

Jul-22

UK Consumer Confidence Indicator

Source: ONS, OECD, Capital IQ

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Retailers now more than ever need to build agility into their DNA. Disruption will continue to challenge management teams, requiring them to be flexible and respond quickly.”

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Attempts to pass cost increases onto customers is a delicate balancing act in the fiercely competitive retail sector, ramping up the importance of knowing your customers, and the logistical challenges of providing the ‘right product, right place, right time’. Layer on production costs, where suppliers are also feeling the squeeze through increased materials and labour costs, striking that balance becomes even more of a challenge, especially for Retailers who trade on a discount / low-cost model, where selective price increases will need to be adopted, like Primark with its Autumn/Winter range. Strategies need to focus on shorter, flexible, and more agile supply chains that can deal with supply shocks and address shifts in consumer behaviour – including on-shoring and near-shoring, deglobalisation, and contingency planning to mitigate bottlenecks and changes to supply. Retailers are also forming “inflation control towers” bringing together cross-business teamswith senior sponsorship to centrallymanage inflation ary asks (with the right insights) instead of leaving this to individual buyers. For those Retailers looking at a cost-cutting approach, a strategic appli cation is key rather than a blanket percentage-driven ‘slash and burn’ approach. Cost reductions need to ensure that value is preserved by looking at costs in terms of the value they bring to the business and what is really needed. Consumer behaviour – A continuously evolving dynamic The power dynamic shift from retailer to consumer was already in full flow prior to inflationary pressures, with the rise of “Metail” consumers have never been more empowered in the way they shop. However, for millions of people in the UK, much of the support outlined in the recent budget announcement will be swallowed up by soaring energy bills, higher mortgage payments, and higher costs across the board are squeezing household budgets, reducing discretionary spending. Irrespective of the current inflationary climate, ESG is still high on the corporate agenda for many retailers, and for reasons beyond the envi ronment. Consumers nowmake purchasing decisions on how a company acts, their values, and the materials that they use. But standards come at a cost, adding to the inflationary pressures being felt by retailers and customers alike. Retailers, therefore, need to be smart with their tactics and adopt a more agile approach, flexing with the unpredictable nature of the consumer, and work hard to retain their loyalty. If they don’t offer perceived value, consumers will switch brands.

Developing a strong value proposition is key to the more cost-conscious customer, anchored around value for money. Adopting the right tone and reaching new audiences will be critical in protecting market share through authentic communication. There is a challenging period ahead for retailers in the UK as disruption and market conditions continue to test management teams. Retailers now more than ever need to build agility into their DNA to deal with both short and longer-term challenges.

To hear more about our Retail Outlook, or for more information on how AlixPartners can support your business through this period of disruption, get in touch.

Dan Coen dcoen@alixpartners.com +44 7557 144 129 Richard Harrison rharrison@alixpartners.com +44 7771 501 030

Matt Clark mclark@alixpartners.com +44 7947 730 225 Clare Kennedy ckennedy@alixpartners.com +44 7887 678 503

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HIDDEN GOLD AT THE END OF THE CROSS-BORDER RAINBOW

Chris Field Managing Editor Retail Connections

L uxury brands caught in a domestic demand downturn will have to look a lot further afield if they are to find new customers, says Retail Connections editor, Chris Field No one needs reminding of the cost-of-living crisis, its various causes or indeed its likely outcomes in terms of consumer confidence and spending. Retailers will have to look further afield for growth and they may be surprised to learn that in some sectors, in some countries, there is strong and growing demand. A survey of more than 14,000 consumers across 14 countries by cross border ecommerce specialist ESW, shows that the cross border market for luxury goods grew by 17% in the first half of 2022 as detailed in its recent Global Voices: Consumer Pulse 2022. While this level of growth may not be sustainable as the cost of living crisis hardens, ESW has identified five countries with fast cross border luxury goods demand - South Korea, Germany, Australia, Mexico and Canada. Canada and Mexico - as much as 22%. Key to taking advantage of this accelerated demand is an understanding of local behaviours and preferences. For instance, 73% of Australians enjoy the experience of shopping on the websites of brands they like while 64% believe they get better promotions if they shop with a brand direct, and 60% feel more connectedwhen they buy direct from a brand website. 85%, 71% and 78% respectively in Mexico.

The research also looks at what devices consumers favour in each territory with 83% and Mexicans choosing mobile, more than any other country but still the most popular channel in all five countries. When it comes to payment, there are some dramatic differences between countries, with Australians favouring PayPal (61%), while most other countries put credit card at the top, with the exception of Germany where credit only scores 31%. The much-heralded popularity of BuyNowPayLater (BNPL) inAustralia might be slipping – it is the third most favoured option at 28%. Retailers also need to know how consumers in each country are finding them. For instance, Germans rely primarily on stores to do product discovery (46%) while 68% of Mexicans rely on Facebook. YouTube and Instagram also feature strongly. When it comes to making purchasing decisions, 59% of Mexicans use social media to access product reviews and 41% use social media to find newproducts. All countries rely on asking friends, family, followers when making a purchase, led byMexico at 34%. South Korea Korea emerged more quickly from the pandemic than many other nations. As a result, while growth in the UK, looking at the gloomiest sources, is set to be around 0.4%, in South Korea, it will be 2.7% in 2022 and 2.5% in 2023, despite a drag from high inflation, according to the OECD , which adds that from early 2023, growth will pick up due to strong investment and exports. Statista adds that the luxury goods market in South Korea was US$18 bn in 2021, up from $14.9 bn in the previous year. In the same year, sales of foreign luxury goods increased dramatically. South Korea also had the second highest rate of cross-border online luxury goods purchasing at 36%, behind the leader, China (46%).

Australia.” ‘‘

Top fast-growing cross border markets South Korea, Germany, Mexico, Canada

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Canada A combination of increasing wealth, tourism and more affordable prime retail property have made Canada one of the top destinations for luxury retailers, according to analysts. Statista says that the luxury goods market in Canada was worth US$6.25bn in 2022 and will grow by 4.37% a year (CAGR 2022-2027). Luxury fashion is the largest segment of that market valued at US$2.29bn in 2022. Retail Insider says that there has been an influx of luxury brands opening flagship stores in major urban centres like Toronto and Vancouver over the last two years, including Chanel, Hermès and watchmaker Richard Mille. Nearly 40% of the 50 new international retailers entering Canada in 2021 were in luxury, added Retail Insider. Mexico As reported by Vogue Business, the $4.7 bn Mexican luxury market is maturing for fashion and luxury brands willing to go the extra mile in terms of service that’s expected by the consumer. Real estate developers and department stores are continuing to expand into second and third tier cities, targeting both locals and tourists, where they continue to dominate the market. From cosmetics to luxury goods, Millennials and Gen Z are buying signif icantlymore from outside their home countries than Gen X and Boomers. In fact, they are buying at or near twice the rate of Boomers in every category, including apparel. Faced with stagnant or underperforming domestic sales, retailers that can capitalise on international growth, by shifting regional ecommerce focus and building D2C capabilities tuned to the behaviours and preferences of burgeoning markets, will thrive.

From cosmetics to luxury goods, Millennials and Gen Z are buying signif icantly more from outside their home countries than Gen X and Boomers. In fact, they are buying at or near twice the rate of Boomers in every category, includ ing apparel.” Germany German luxury consumers are among the most demanding in the world but also among the most loyal. According to Statista, revenue in the Luxury Goods market amounts to US$12.14bn in 2022. The market is expected to grow annually by 8.18% (CAGR 2022-2027). The market’s largest segment is Luxury Fashion with a market volume of US$4.52bn in 2022. In the Luxury Goods market, 26.2% of total revenue will be generated through online sales by 2022. According to Roland Berger, the German luxury market is growing 5% a year faster than the overall global luxury market, with the strongest year-on-year growth (20%) from designer clothing and accessories, watches, and jewellery. This must be understood in the context of the German luxury market in Europe still lagging behind France and Italy. Australia The Australian luxury sector has grown on the back of the recent com modity boom, and annual luxury sales are predicted to grow 2.4% to AU$4.5bn in 2026 according to IbisWorld. Brian Wu, owner of premium multi-brand boutique Incu and operator of APC and Rag & Bone’s Australian businesses, says brands are piling into Australia because they have performed so badly in other markets. “Australia is a market with potential. Brands see Australia as being so positive right now.”

Chris Field chris@retailconnections.co.uk 0777 576 0876

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GUERNSEY’S POST-PANDEMIC REVIVAL AND THE ALLURE OF THE HIGH STREET

Korinne Le Page Head of Retail Development Guernsey Retail Group

K orinne Le Page, Head of ines why newoutlets are spring ing up in Guernsey and shows howthe Channel Island should be considered as an attractive opportunity for UK brands and independents. Businesses will always face challenges, none more so than over the past couple of years. Covid-19 is re-shaping and accelerating change in the retail sector, with new trends rapidly gaining speed across the industry, brought on by restrictions imposed at certain times and changing consumer habits. It is therefore encouraging that through entrepreneurship, creativity and community, one location in particular is seeing more than just the green shoots of recovery. Retail Development for the Guernsey Retail Group, exam

Guernsey, a self-governing Island of 63,000, is lively, relatively affluent and sophisticated. The retail sector’s history can be traced back almost 250 years and today, it is diverse and dynamic with St Peter Port, the Island’s capital and hub, offering a varied shopping experience for locals and visitors. Regular and popular events are put on throughout the year, increasing footfall and, as a tourist destination, around 100 cruise ships visit every spring and summer, bringing in over 100,000 new arrivals. Along with almost 300,000 independent visitors annually from around theworld, this allows retailers to benefit from a larger customer base during the season. One of the other key factors illustrating the Island’s attractiveness is its relative affluence. The Island’s GDP per capita in 2020 was £50,353, some 57% higher than in the UK and discretionary spend per household is just over £23,000 in the same year. Some of this prosperity can be attributed to Guernsey’s posi tion as an international finance sector, which provides well paid and regular employment to a sizeable proportion of the local population, along with low unemployment.

In Guernsey, VAT is not applicable and the availability of items is good. The majority are obtainable locally and this includes higher value household items, clothing, jewellery and cars. As a standalone Island, consumers also cannot travel to other cities or shopping centres so easily as in the UK. A further consideration is home ownership. The local government’s figures show that 60.8% of households are occupier owned so, as a result, there is a buoyant market for home and durable goods. The Guernsey Retail Group (GRG) was estab lished to support, represent and drive the local retail economy. It speaks for the sector, assist ing businesses of all sizes, product offerings and ownership type. The GRG works with Guernsey’s government and has developed positive relations with commercial agents and other key stakeholders, helping retailers wher ever they are on their journey.

Guernsey’s bustling High Street, St Peter Port. Credit: Guernsey Press

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Guernsey has always been of interest to national retailers given its captive audience and strong, economic position.”

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The Island’s GDP per capita in 2020 was £50,353, some 57% higher than in the UK.

Guernsey’s bustling High Street and Commercial Arcade, St Peter Port. Credit: Guernsey Press

Terry Gardiner, Director Commercial Property at Savills Guernsey, confirmed: ‘It is positive to see that the Island is buzzingwith opportunities in retail, for everything from large chains, small independent outlets or somewhere in between. ‘In addition to strong demand from entrepre neurial start-ups, Guernsey has always been of interest to national retailers given its captive audience and strong, economic position. There is no escaping that the industry has been under pressure during the pandemic but on the whole, we have seen a very responsible approach from landlords who have assisted their tenants during this difficult period. Furthermore, it is positive to see that we are moving out of this difficult period, albeit therewill always be headwinds to contend, but Guernsey will always be able to claim that it is a good location in which to consider doing business.’

An example of a successful initiative is the Retail Pathway, which sees the GRG, landlords and businesses work collaboratively to provide short and medium term rental opportunities for fledgling outlets, along with established, expanding retailers. The GRG’s quarter two report for 2022 pro vides a comparison of retail occupancy rates between St Peter Port and town centres in the UK. This shows that the average 2022 vacancy rate in Guernsey was just 7.8% in the three months from April through June, a reduction from 13.5% of units counted in Q1 that still reflected the impact of the pandemic. In the UK, the national vacancy rate is also decreasing, but at a lower rate than in the Island. The most recently available statistics for the second half of 2021 showvacancies at 14.4%, down 0.1% comparedwith January to June of the same year.

This 5.7% improvement in occupancy on Island can be directly attributed to a higher number of new openings, assisted by the Retail Pathway initiative, along with expansions of existing businesses. As a result, St Peter Port features a range of established independent retailers and hospitality outlets intermingledwith larger chains, giving a vibrant, appealing and unique feel to the town. Recent examples include Pavers, theYorkshire based shoe company that took on Jones Bootmaker and a local store in 2018, which recently re-opened in the centre of St Peter Port. Other UK brands now established are Marks & Spencer, Mappin & Webb, Boots the Chemist, Next, Monsoon, White Stuff, Mountain Warehouse, Schuh, Fat Face, Quiz, Jo JoMaman Bébé, Yours, Swarovski, The Body Shop, Hotel Chocolat, Specsavers (headquar tered in Guernsey), Sports Direct, Holland & Barrett and others.

Korinne Le Page hello@guernseyretailgroup.gg

Source Local Data Company Retail and Leisure Trends Report 2021 https://rb.gy/5qe5vq Guernsey Annual GVA and GDP Bulletin, 2020 https://www.gov.gg/CHttpHandler.ashx?id=147608&p=0 Carey Olsen report https://www.careyolsen.com/articles/lure-guernsey-high-street Visit Guernsey trade media https://guernseytrademedia.com/media/1ylm5g2w/vg_2019_value_to_economy_infographic.pdf Guernsey Household Expenditure Survey 2018-2019 Report https://www.gov.gg/CHttpHandler.ashx?id=133968&p=0 Guernsey Annual Residential Property Stock Bulletin https://www.gov.gg/CHttpHandler.ashx?id=151201&p=0

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IT’S TIME FOR RETAILERS TO WORK TOGETHER TO TACKLE DOMESTIC ABUSE

Chris Brook-Carter Chief Executive Retail Trust

A midst a troubling rise in domestic abuse cases, what role should retail ers play to help staff in abu sive relationships? When former bank clerk Fiona Bowmanwas left badly injured by her husband, nurses called her manager Graham to the hospital. And he was left stunned by what he found. “I didn’t have an inkling what Fiona was going through,” he said. “Butwhen I sawher in hospital, her injuries were so bad she was unrecognisa ble. She eventually admitted she was suffering domestic abuse and seemed relieved to talk to someone she knew she could trust. I knew I had to help.” Years of domestic abuse had left Fiona feeling ashamed and she had gone to pains to hide her suffering from friends, family and colleagues. “You’ll tell people everything’s finewhen it’s not,” she said, “and even though they might know you’re not really OK, they often don’t have the courage to ask more questions.” Thanks to Graham’s help and the support of their employer’s HR team, Fiona was finally able to escape her violent marriage when she was transferred to another branch of the bank, 400 miles away. “Having the support of my employers as I rebuilt my life meant the world to me,” she later said. We believe that by working together as an industry, retail has a real power to make a change.” ‘‘

Howmany employers see protecting against domestic abuse as their responsibility? A quarter of women and one in six men will be affected by domestic abuse in their lifetimes, according to the World Health Organization. And with one woman a week and one man a month losing their lives as a result, Fiona’s story highlights the critical role that employers can play in helping victims. Yet, howmany businesses actually see it as their responsibility to deal with something that may havevery little to dowith an employee’sworking life? And howmany other colleagues might be suffering in silence as a result? In Fiona’s case, the support she received fromher employer not only helped to save and rebuild her life but gave her the confidence to reach out for help in a way she felt unable to with friends and family. And this comes amidst a troubling rise in inci dents, with the police and domestic abuse helplines reporting soaring rates of calls during the pandemic and cases due to spike once again this winter due to frictions caused by the cost of-living crisis, theWorld Cup and the Christmas period. And at the Retail Trust, we are now providing more counselling services for retail workers in abusive relationships than ever before. Certainly, one of the long-term, positive con sequences of the pandemic was a much better focus onwellbeing at work, with the companies that are now coming out stronger being those with a real desire to put their people first and have more meaningful conversations about mental health. But we believe employers don’t just have a responsibility to look out for their employees’ wellbeingwhile they’re at work. Being support ive extends to offering help when colleagues are going through a difficult time at home, too. And from a step as simple as displaying help line numbers in staffrooms, to arranging an employee’s transfer to another branch, we in the industry can all do something to help retail workers facing domestic abuse.

Beyond simply being the right thing to do, with record numbers of job vacancies and our own research showing that a fifth of retail workers want to leave their jobs, retailers need to look at everything they can do to keep theirworkforce engaged and supported. This will be a real focus of the Retail Trust’s next Leaders’ Summit in January, where we will be bringing together retail leaders from across the sector to discuss the big issues that are impacting their employees’ wellbeing right now. The Retail Industry Against Domestic Abuse We’re holding this event because we believe that byworking together as an industry, with a coalition of people, leaders, brands and organ isations who are united in creating a healthy, happy and thriving workforce, retail has a real power to make a change. And that’swhy, in 2021, we launched the Retail Industry Against Domestic Abuse campaign in partnership with the Domestic Abuse Alliance and Dunelm to bring more help to domestic abuse victims working in retail. “The home should be a place where you feel comfortable and safe, but we know this isn’t always the case,” JosieDickinson, inclusion, diver sity and wellbeing senior manager at Dunelm told us. “As part of RIADA, we feel a real sense of responsibility to educate and support our colleagues.” And since launching the campaign last year, 30 other household name retailers like IKEA and B&Q have joined us to support their staff. But whether you join us too, or are only begin ning to look into the support you offer your staff facing domestic abuse, here’s three important steps you can take.

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Create a domestic abuse policy to raise aware ness among colleagues and make it easier for employees to speak out. A formal commitment to tackle abusewill make it easier for colleagues to speak up. It will raise awareness among staff, help them identify the signs to look out for, and show them how to offer help. Educate managers to recognise the signs of abuse and understand how to approach col leagues and offer practical support. We offer a manager’s guide on howto spot abuse, and how to tackle it if you do, aswell as training aimed at helping managers to understand the different types of abuse and how to recognise the signs. Join the Employers’ Initiative on Domestic Abuse (EIDA). By joining EIDA, employers can play a key part in tackling domestic abuse, and access reports into domestic abuse, materi als to support managers, and handy toolkits. Membership is free.

Having the support of my employers as I rebuilt my life meant theworld to me. Fiona Bowman domesticabuse survivor

Chris Brook-Carter, cbrookcarter@retailtrust.org.uk

Fiona Bowman escaped her violent relationship when a colleague offered help when she needed it the most

For more information on the Retail Trust’s Leaders’ Summit on 11 January 2023, visit retailtrust.org.uk/leaders-summit For more information on the Retail Industry Against Domestic Abuse campaign, visit retailtrust.org.uk/domestic-abuse

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GOING SHOPPING TO ALWAYS SHOPPING - HOW CONSUMER BEHAVIOUR IS SHAPING RETAIL

Katy Clark Head of Retail and Ecommerce Meta

U nderstand how uncertainty has driven digital acceleration within customer shopping behaviour and decision making If you asked the average person a couple of years ago what it meant to “go shopping”, it might be described as this; a few friends meeting up at a local store to shop around for the latest sales or find a new outfit for a special occasion. You might take your time flipping through racks or sorting through shelves to discover that one special item you wanted desperately to find. In some cases, you might even find some things you didn’t even knowyouwanted until you laid eyes on them, in the moment. If you fast forward to today and ask that same question, the answer will be different. The pandemic has significantly accelerated digital adoption and forced a convergence of the on and offline, therefore transforming how people discover, evaluate and purchase products. We now rely on multiple touch points throughout our purchasing journey, which is further accelerating hybrid shopping. In 2019 our friends or family may have been the trusted advisor on a new pair of trainers, but when was the last time you made a purchase based on a creator, celebrity or sports person? An expansion in touchpoints is enabling us to consume media in a new way, whilst also influencing our purchasing behaviour. As consumer expectations heighten, friction free convenience and speed have become the required normality. Shoppers expect to receive quick and seamless experiences from checkout to fulfillment, with ”Same Day Delivery” hashtags growing by 34% on Instagram1 .

The new definition of what it means to go shopping has significantly changed and likely for the long-term. But as consumers cautiously re-emerged and returned to stores this year, theywere once again served another challenge as the cost of living crisis took hold. Disruption to loyalty patterns continue to challenge businesses to stay top of mind as consumers are forced to seek alternatives. We’ve seen the cost of living crisis force consumers to adapt, experienc ing a drop in buying power due to rising prices forcing them to buy less, look for bargains, switch retailers and/or buy cheaper brands. Product shortages have accelerated omnichannel shopping as shoppers respond by migrating to new channels to purchase the desired products. While shoppers turn to new channels, blending digital and physical touchpoints, they have new expectations for seamless shopping that leverages the best of both worlds. Seamless shopping will remain essential as con sumers go hybrid. Anew era of multidimensional shopping is dawning. As a desire for more immersion, and connectivity drives the adoption of new technologies, AR and VR will transform the shopping landscape and enable us to shop across channels, devices and even realities. It is also prudent to note however, that as humans, we are creatures of habit and tried and tested methods must also play a part in the foundation of creating great experience - from 2020 to 2021 we saw a 233% increase in the term “QR codes” on Facebook1, sparking their renaissance in bridging the gap between the on and offline.

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• Power your performance with AI using the new Advantage + Shopping Campaigns (ASC), leveraging machine learning to help you reach valuable audiences with less setup time and greater efficiency, ASC is designed to be the most efficient solution for performance-focused advertisers looking to drive online sales and it is already showing an average of 17% improvement in cost per acquisition and an average of 32% increase in return on ad spend compared with business-as-usual only campaigns 8 . Make retail advertising seamless with Meta technologies. Explore more here: https:/ www.facebook.com/business/industries/retail

As we’ve emerged from the pandemic, affinity to digital will continue to rise, as it meets consumer needs. With the cost of living crisis on consumers’ minds, 42% of adults globally plan to start their shopping earlier due to inflation2 and 44% of UK shoppers say they’ll have com pleted their Christmas shopping before Black Friday3. With only two pay cheques before Christmas, the time is now for retailers to secure share of the squeezed customer wallet. With peak just around the corner, how can retailers navigate through these turbulent times? Brands should respondwithwarmth and understanding, using messaging that humanises the brand and matches the times, while targeting audi ences based on new customer behaviours and telling impactful stories that feature real people and community members. • The more diverse connections you make with customers, the more effective campaigns you can drive, for example, AR, Reels, branded content and in-stream. We see that connected multipliers shift deeper brand metrics by up to 139%4 . • Use digital circulars to communicate offers, 66% of users who discover new brands or products online discover them on Meta technologies 5 and 74% are willing to postpone a purchase decision until they find an attractive promotion or offer6. While consumer confidence in the economy is low, Facebook groups are helping consumers to stay informed. When asked where consum ers find offers, Facebook was the predominant response7 .

Katy Clark

Sources 1: Hashtags are based on Instagram data, global, Jan 2020–Dec 2021. Conversation topics are based on Facebook data, global, Jul 2020–Sep 2021. 2: Our Predictions for the 2022 Peak Season. HowWill Inflation Shape Holiday Shopping This Year? Research by Salesforce. July 7 2022. 3: IPA survey reveals Christmas shopping plans. Survey commissioned by the Institute of Practitioners in Advertising (IPA), among a sample of 2,000 UK adults aged 18+. The research was undertaken by Opinium and fielded between the 24th of June and the 2nd of July 2022. 4: Meta internal data; Analysis of ~7,000 Facebook brand lift studies conducted between Jan 2020 and Jun 2021 in EMEA, across all verticals. 5: ‘Digital Circular’ Study by YouGov (Meta-commissioned online study of 22,149 people, Australia, Brazil, Canada, France, Germany, Japan, Mexico, Poland, Sweden, Thailand, Turkey, UK, US, June 2022). 6: “Discovery-Led Shopping Study” by GFK (Meta-commissioned online survey of 3,221 people ages 18+ in UK, France and Germany, Q3 2020). 7: On A Budget (Electric House Publishing Group), 2022 8: https:/ www.facebook.com/business/news/helping-businesses-grow-with-ai-messaging-and-video

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HOW DATA & ANALYTICS CAN UNLOCK SUSTAINED GROWTH FOR RETAILERS

Mike Withey Corporate Senior Vice President WNS Retail

I n a rapidly changing marketplace, speed and a data-led customer experience are essential While most senior retail executives recognise data and analytics as key strategic enablers, the investment in building such capabilities is seriously lacking. Some major retailers are practically shooting in the dark when it comes to understanding customer expectations and needs, and blowing their marketing budget in the process! A global analytics study by Forrester Consulting on behalf of WNS1 shows that companies need to accelerate their data and analytics capabilities to realise the benefits of analytics-driven decision-making at scale. We highlight the key statistics from the study and three major takeaways to consider: What Do the Numbers Say: • 70 percent of retailers agree that customer experience and loyalty are core priorities linked to topline revenue growth. No real sur prise here, particularly with the e-commerce boom lately; but • Only 46 percent of retailers are actively investing in enabling tech nology, with only 11 percent having some cloud-based analytics capability in place today; • Furthermore, 60 percent admit they face a lack of maturity in data management technology and 50 percent claim they cannot effectively process ‘big data’ fast enough; • This is a real roadblock to gaining customer insights and is some what misaligned with the desire of 73 percent of retailers to build predictive analytics capabilities to grow their retail business; • Finally, 77 percent of retailers are planning to implement Artificial Intelligence-enhanced Business Intelligence platforms (with 71 percent prioritising Speech Analytics above Text Analytics, Natural Language Processing and Machine Learning); and • To get there, 40 percent intend to use third-party service provid ers to bring in the skills, experience, cost-effectiveness and speed needed for the transformation.

3 business priorities

Top 3 business priorities

78%

Accelerate our response to business and market changes

70%

Build topline growth (e.g., expansion to new markets, revenue growth)

Improve customer experi ence and loyalty

70%

Source: A commissioned global analytics study conducted by Forrester Consulting on behalf of WNS, 2021 Note: Retail industry respondent size, n=82

Do drawyour conclusions from the detailed study, but to save time, here are our summarised thoughts:

1. Invest Effectively in Data and Analytics Capabilities Cash, costs and margins are important for retailers. Still, a mindset change may be needed to invest in the data analytics capabilities that help retain existing customers and find newones. Look around – it is no coincidence that your major competitors are creating Chief Data Officer roles to consolidate their organisation data. They also bring ecosystem, partner, customer, supplier, marketplace and industry datasets, as well as data services and applications data, into a single view – and all on the cloud. ‘What does the data say?’ needs to be the new catchphrase because gutfeel and years of historic retail experience are proving unreliable, if not redundant. We find ourselves in uncharted territory post the pan demic, with supply chain issues, Brexit realities, inflation and interest rate rises, and even the impact of wars. Yet, organisations with advanced data and analytics maturity have seen revenue growth. Invest now. Take a long, hard look at why there is a lack of maturity in data manage ment technology and an inability to process big data. Is it people, process, decision-making structures – or perhaps politics? If these business cases are being overlooked and investment is not made, it simply needs to be addressed and fixed. New e-commerce entrants to your market are now data-driven. They know their customers and their buying habits intimately and offer a seamless, personalised customer journey. Retail startups are pricing dynamically, enhancing loyalty schemes, and even creating new revenue streams through retail media channels. This is to name just some of the value analytics brings; the list goes on and on. 2. Evaluate the Root Cause of Technology Challenges