Few doubt that the Irish retail sector has faced some very tough trading conditions in recent times. Of course, the global financial crisis can account for many of the problems the wider economy has faced for a decade or more but the impact of the pandemic on normal shopping – outside of groceries – has had a deep effect on the Irish retail sector. The point to take on board is that neither of these two global events are truly over in terms of their ongoing economic legacy, certainly insofar as consumer retail is concerned.
What do Irish retailers need to know about the latest commercial trends and how will they affect the way they do business? Read on to find out.
Discounting Will Be On-Trend for the Rest of the Year
To begin with, it should be pointed out that discounting prices is nothing new in Ireland. It has been one of the mainstays of shopping for several decades, especially where seasonal items are sold and retailers want to make space for their new lines. However, what 2022 has shown thus far is that discounting is no longer so seasonal. To attract the footfall they want to sustain wider trade, retailers need to think about discounting throughout the year. Of course, there are also seasonal factors to take into consideration, such as pre-Christmas spending, New Year sales promotions and discounted items for the Easter holidays. However, the most successful retailers will be the ones that always – or nearly always, at least – have a good discount offer on that gets more people into their stores. Without this approach, even very competitively priced retailers can see customers heading elsewhere. When that happens, you have to be even more aggressive in your pricing to win them back.
Container Shipping Is Finally Getting Cheaper
The retail sector is often justly focussed on sales but there is an important supply side trend to take into consideration, especially among sellers of consumer goods. Having seen soaring logistical costs to get goods out of South Asia and the Far East for the last three years or so, retailers can start to expect significant drops in shipping prices as 2022 progresses, something that many logistical experts think will continue long into 2023. Of course, this will depend on the price of fuel to a great extent. However, shipping firms will now provide containerised movements of goods for significantly lower sums than they would have done a year ago. This is due to the world’s intermodal container system resolving many of the issues that it faced during the pandemic when there simply were not enough workers at ports to handle demand.
Shoppers Want to Buy Early and Locally for Christmas
Over the least few years, Irish retailers have faced a great deal of interest for what would be termed as Christmas goods – decorations, novelty items and gift sets – much earlier in the winter than used to be the case. It is often down to the way the big, international internet brands market their seasonal deals that leads consumers to want to buy in November when they might have traditionally only started to get into Christmas shopping habits by mid-December. City dwellers tend to be the most tuned into this trend, so it doesn’t affect retailers in all parts of the country equally. However, just because internet giants hype Christmas purchasing earlier than used to be the case, it doesn’t mean Irish shoppers want to buy all their goods online. If they can get the Christmas experience a bit earlier in bricks and mortar stores, then the evidence is there to suggest that is where they will go.
Staffing Costs Will Rise Among Retailers
When there were fewer people shopping in stores, the need to employ so many retail workers was diminished, sometimes even being just a small fraction of the staffing level of pre-pandemic times. This has meant that lots of retail workers have now left the sector, some of them for good. As such, recruiting new staff into the sector will cost more than it had previously done. To begin with, there are inflationary pressures in the wider economy, not just in Ireland but throughout Europe, of course, something that all payroll managers cannot have failed to have noticed. There again, competition for experienced retail staff, especially managers and supervisors, is intensifying, causing greater recruitment costs among the most sought-after stratum of workers. Furthermore, retailers will need to recruit people into the sector who have no prior experience of shop work. Although this has always been the case in retail, training costs to turn first-jobbers into reliable workers who add value to retail businesses are likely to rise significantly.
Online Demands Will Continue to Grow
Earlier, we looked into the idea that shoppers want localised retail experiences. This is certainly true in 2022 but it doesn’t mean that online shopping is slumping – far from it, in fact. If 2022’s figures are anything to go by, then you would have to draw the conclusion that shoppers still want the experience of selecting goods from bricks and mortar retailers, especially when they’re trying things out in showrooms, such as audio equipment, TVs or even sports equipment. However, if they are simply reordering something they’ve bought before, then many Irish consumers – particularly those under 35 years of age – will find it more convenient to buy online. As such, Irish retailers simply cannot do without an online store to which their customers can turn when they want run-of-the-mill items. Retailers shouldn’t think they are in a death spiral with e-commerce platforms but use them to their own advantage by having a presences on them to promote sales and discounts while still offering in-store expertise.
Customer Care Programmes Will Break New Ground
Although many retailers still refer to their engagements with shoppers as customer service, more and more Irish firms in the retail sector now adopt customer care programme models. Customer service can be a straightforward as offering product specific advice in store, or it could mean registering sales through the till, or even mean dealing with returns and complaints. To be clear, all of these things are included within the best customer care programmes. What they offer in addition, however, are a wider set of services that aim to make each customer feel better cared for. These can be part of loyalty membership schemes that track all previous interactions with customers, for example. Customer care has been adapted by retailers globally to create more of a community atmosphere between a retail brand and its customer base.
Employee Engagement Is a Key to Lower Overheads
CEOs of retail firms need to understand just how important human resource development is nowadays. Shop workers at all levels must feel better engaged in their work or they will end up being stressed and, in the end, leaving the sector, something that adds to staffing churn and, ultimately, rising employment overheads. Instead, measure employee engagement and contentment with regular surveys. Many retailers find that keeping shop workers on side has less to do with the amount they receive in remuneration and more to do with the way they’re communicated with. For example, self-service holiday booking and automated secure payslip access are often cited as good things by employees. Adopting such systems is often much cheaper than simply paying shop workers more and hoping that does the trick.
Feel free to contact Snow if you have any questions about our highly customisable payroll software and what it can do to streamline operations for retail sector businesses throughout Ireland.