Helen Dickinson: ‘Don’t build back better – build forward’

We shouldn’t speak too soon. The summer of 2020 saw far fewer cases, albeit without a vaccination programme, and hopes of recovery were soon dashed.

Nonetheless, this time I will dare to be optimistic. The rapid rollout of vaccinations, coupled with home and workplace testing and a more cautious approach to the reopening of the economy, offers hope that this time we will succeed.

“Let us work with the direction of travel, rather than trying to reverse trends that are already deep-rooted in the behaviour of the modern consumer”

The retail industry, and the wider economy, now have the much-touted opportunity to ‘build back better’. But the aim should not be a return to a ‘better’ retail industry of 2019, but rather to build forward to a retail industry of 2021 and beyond. 

Retail was in transformation pre-pandemic and that has only accelerated. Let us work with the direction of travel, rather than trying to reverse trends that are already deep-rooted in the behaviour of the modern consumer. 

Retail is important. It is the largest private-sector employer in the UK, directly providing 3.1 million local, flexible jobs, as well as many more in supply chains, warehousing and logistics. 

However, Office for National Statistics figures show the lowest number of people employed in retail in the golden quarter since 1999 – and there were 67,000 fewer jobs in December 2020 than at the same point the previous year. 

“The reduction in retail jobs is perhaps not as high as the headlines might have us believe, but it is not altogether surprising and may even be necessary”

Some of these job losses are part of a longer-term trend. Since 2015 there has been a 3.9% drop in retail jobs, more than 120,000 in total, while the UK workforce has risen 3%.

The reduction in retail jobs is perhaps not as high as the headlines might have us believe, but it is not altogether surprising and may even be necessary. 

Technological innovation has driven efficiencies and automation and has the potential to impact or displace up to a third of all tasks in retail by 2030. This includes automated bookkeeping and data analysis in the cloud, replacing armies of accountants, through to warehouses using automated bots to fulfil orders. 

In the highly competitive world of retail, where delivering the best value is at the forefront of most customers’ minds, achieving the same output with fewer people is a benefit. Indeed, it helps explain why productivity rose 12.3% between 2015 and 2019.

However, there are many viable jobs in retail that are under threat from the pandemic. 600,000 retail colleagues are currently on the government’s furlough scheme.

While many will be back over the course of April, we estimate that 250,000 staff have not returned to work since the pandemic began and are at risk of being permanently lost when the furlough scheme is wound down. 

Government interventions, from business rates relief to furlough to rent debt moratoriums, have all been essential to protecting jobs in the industry.

But with ‘non-essential’ retail stores missing out on almost £30bn in lost sales during lockdowns, government will need to maintain support for the industry until consumer demand returns. 

“This should not be a threat, but an opportunity. We must get to a place where there is no meaningful distinction between physical and digital retailing”

We cannot simply build back better, despite the nostalgia it might bring. Pre-pandemic, only one-fifth of sales were made online, but that has risen to a third during the crisis – and is much higher when food sales are excluded. 

Undoubtedly, some of these sales will return to the stores that reopen in April, but some will not. More of us than ever before have made online purchases in the last year; many of us will stick with it. 

This should not be a threat to the industry, but an opportunity for both retailers and their people. We must get to a place where there is no meaningful distinction between physical and digital retailing. Most retailers will do both and customers should be able to interact seamlessly across channels to get the best of both worlds.

It is not just warehousing and delivery jobs that are being created. There are thousands of highly skilled roles being created in web design, digital marketing, AI and more.

Such jobs are key to making retail a career of choice for thousands of people in the UK. 

The UK really can leverage our position as one of the most advanced ecommerce markets in the world. To thrive, retailers must invest in technological transformation and enable AI, the Internet of Things, virtual and augmented reality, robotics, blockchain and 3D printing to find their USPs in widespread application.

Such innovation should not only enhance the capabilities of retail, but support the UK’s strengths as a centre for technological development. 

But to take advantage of this, we have to improve digital skills and wider capability across the industry. We have to retrain the people the industry already has, rather than shedding jobs in one area and hiring anew in another.

We need the government to step up and ensure retailers can use their apprenticeship levy at least to fund a part of this.

As the UK begins the slow process of recovery, we must build forward.

The retail industry may not employ as many people in 2030 as it does now, but it has the chance to remain one of the most important employers in the country while cementing its position in one of the most advanced ecommerce and retail markets in the world, and continuing to play a crucial part in communities.

We must now forge a path that allows that to happen.