The Role of Retailing in the Modern Scottish Economy · • Verdict 2010 £21.5bn sales which is...

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The Role of Retailing in the Modern

Scottish Economy

Professor Leigh Sparks,

Institute for Retail Studies,

University of Stirling


The Role of Retailing in the Modern

Scottish Economy: Structure

• Retailing in Scotland

• Drivers for Change

• Blended Retailing

• The Recession is Over

(Not)

• Retailing in the Modern

Scottish Economy

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Retailing is Proportionately More

Important in Scotland

• Retailing in Scotland:

– c24K shops

– Sales of c£25bn

– Employs c240,000

people

– GVA 15% of Scottish

economy

– 43m sq ft space

Source: British Retail Consortium


The Scottish Consumers

• Locals• Tastes and products

• Rhythms of life

• Trading and shopping times

• Visitors• Perceptions of Scotland, its

land and its products -

castles, festivals, whiskies,

jewellery

• Expectations of Scotland

and Scottish retailing

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Drivers for Change

• Political Structure and

Trends

– Scottish Parliament and SNP

Government

– Scottish Planning Policy: town

centres and retailing

– Town Centre Regeneration

Fund and BIDS

– “Supermarket tax” and

“Health” Levy

– Taking on the Scottish Evils of

Tobacco and Alcohol


Economic Structure and Trends

Source: Scottish Retail Sales Monitor

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Economic Structure and Trends:

Credit Crunch

Source: Scottish Retail Sales Monitor


Drivers for Change

• Socio-cultural and

lifestyle aspirations

– attitudes and beliefs

– work and leisure

– public/private balance

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Drivers for Change

• Demographic structures

and trends

– Households increase

– Population predicted to

rise

– Ageing population

– In-migration important

(reversing long-term

trend)


Drivers for Change

• Product and process

innovation

– Digital revolution

– Business transformation

– Blended channels

– Social media

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Drivers for Change

• Environmental changes and

trends

– Become carbon neutral

– Send no waste to landfill

– Extend sustainable sourcing

– Help improve the lives of

people in our supply chain

– Help customers and

employees live a healthier

life-style


The Blended Retail Revolution

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Quick History of the Internet

Year Launch

1990 WWW invented

1995 Amazon.com

1996 Dell.com

1997 First m-commerce (SMS)

1998 Google; PayPal

2000 Tesco.com; Asos

2001 Wikipedia; Blogs

2003 MySpace

2004 The Facebook

2005 YouTube

2006 Twitter


Dimensions of UK Internet

Shopping

• Verdict 2010 £21.5bn sales which

is 6.8% of retail market

• £35bn pa by 2014 (Verdict);

£68bn in 2011 (IMRG)

• Year on year 16% increase in 2011

(IMRG)

• 2000 to 2010 IMRG index up

5,772%

• 31mn online shoppers in UK

• 2009 Christmas Day £132m,

Boxing Day £281mn (IMRG)

• 1 bn parcels shipped from online

sales in UK in a year

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BRC-Google Online Retail Monitor

(Year on Year Change)

Note: Mobile is now c20% of total


Social Media

• Consumer co-creation

• Communities

• Consumers we trust and

respect

• Insider involvement

• Immediacy

• Enhanced customer

service

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Marks and Spencer: “We Boobed”

• £2 extra for larger bra

sizes

• “Busts for Justice”

Facebook group

• 13,000 members in less

than a week

• Media pick-up

campaign

• Policy reversed


The Blended Retail Revolution

• Has changed:

– How we shop

– How we think about

shopping

– How we tell others

about shopping and

retailing

– How retailers sell

– Retail operations and

practices

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The Recession is Over (Not)

• Structural Issue

– Population in wrong

place, of wrong type and

with less money

– Dereliction, blight and

arrested decay

– Tipping point for

locations and what is in

them

– Cost pressures piling on,

short and medium term


Change in Multiple Stores, Top 500

Town Centres, 2011

Source: Local Data Company

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The Recession is Over (Not) –

Asda’s Income Tracker (UK)


Asda Income Tracker

Region/Country Q1 2010 Q1 2012 % change

Northern Ireland £98 £83 -15%

Scotland £157 £144 -8%

UK £160 £145 -9%

London £287 £266 -8%

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Changing Landscape - Retail Think

Tank


Let’s Pause …

• Long run change in what we think retail is about

(agents of social cohesion and change or agents of

social harm?)

• Long and medium run change in retail operations

and practices (how many shops do we need?

where?)

• New channels and issues about blending (collection

and returns for example)

• The worst (rec)(depr)ession we’ve ever seen (and it

could go on a decade longer in Scotland)

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Retailing in the Modern Scottish

Economy

• Strategic Objectives of

the Scottish

Government

– Wealthier and Fairer

– Healthier

– Safer and Stronger

– Smarter

– Greener



Economy

Objectives Retail Issues

Wealthier and Fairer Vitality of places and wide social access to retail spaces,

across Scotland

Healthier Retailers as agency of change

Safer and Stronger The need to develop communities and places

Smarter The role of retailing in providing education and careers

Greener Reducing the social and public impact of retail activites

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Economy

• New versus Old Space –

how do we get a balance?

• Towns and High Streets and

the Modern Consumer –

what do we want from a

town centre?

• Entrepreneurial Activity and

Diversity – need to enable

local development,

especially in places away

from “destinations”


• www.irs.stir.ac.uk

• www.stirlingretail.com

• [email protected]

• 01786 467384

Contact Points

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The Role of Retailing in the Modern Scottish Economy · • Verdict 2010 £21.5bn sales which is...

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