In order to increase productivity, the retail sector will need to focus on digital skills

The retail sector has seen year on year growth since 2008, and contributed £90bn to the UK economy, according to a report by the UKCES. 

This, the UKCES suggested, was due to Britain’s extension of broadband services and fast take-up of mobile devices having had a “profound effect” on the retail sector. In 2014 internet sales accounted for 11 per cent of all retail spending and by May 2015 this had risen to 12 per cent. 

In comparison with other European nations, the UK has the highest proportion of online market share. Customers’ shopping habits are changing in response to these technological advances, the UKCES stressed, bringing about “a very substantial growth in ecommerce”. The “research online, buy offline” phenomenon was used as an example of how consumers were becoming better-informed and more discerning about their purchases. As a result, the report indicated that businesses needed to adapt sales and customer service strategies to retain customer loyalty

The UKCES also pointed to the “research offline, buy online” trend, which has required businesses to integrate technology with bricks and mortar stores. 

“This has meant that managers and shop owners have been required to develop new skills,” it said.

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However, with the government’s recently released productivity plan “Fixing the foundations” identifying that wholesale and retail was one of five sectors in the UK representing a “productivity shortfall”, the UKCES claimed that need more skilled workers. 

Vicki Belt, assistant director at UKCES, said: “The wholesale and retail sector is the largest sector in the UK economy by employment, but sector productivity is relatively low. There is scope to improve productivity by making full use of existing talent and ensuring that workers have the opportunity to build their skills and experience, and progress within the sector.”

In order to meet the predicted skills demand retailers will need to up-skill existing workers and attract skilled new entrants, she said. Belt noted that as older workers retire they are not being replaced by younger workers at the same rate as in previous years.

UKCES’s research said that the sector needed to improve its image, develop clear progression routes and promote opportunities to use technology-based skills in order to attract undergraduates and graduates. This is particularly so, the UKCES report suggested, given that the wholesale and retail sector “has a comparatively low-qualified workforce.” 

This means presenting retail as an attractive and promising career to those who may be overlooking it in favour of other options, Belt said. She added that in order continue to attract younger workers, the opportunity to use and develop technology-based skills and knowledge within a retail career should be promoted.

To this end, the UKCES is working with the Department for Work and Pensions to develop progression pathways for low paid workers in the retail and hospitality industries. The recently proposed increases to the national minimum wage may also make the sector more attractive to entry-level workers and encourage employers to train and retain experienced staff.

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