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Technology and retail must work hand-in-hand

Traditional High Street brands that have been struggling due to COVID-19 need to partner with those who have embraced technology, or they are likely to fail.

There is an accelerating shift in power which was evidenced last week, when online supermarket company Ocado became the UK’s biggest supermarket in terms of market capitalisation. Ocado has no physical presence on any High Street, but it is now worth £21.7bn. That makes it bigger than Tesco, and bigger than M&S, Sainsbury’s and Morrisons combined.

Established brands are now collaborating with relatively young but well-known tech and online businesses. Recently, Marks & Spencer teamed up with Ocado – after they bought half of Ocado’s retail business last year for £750m, and shoppers are now able to purchase clothes as well as groceries through the Ocado platform. Given Ocado’s emergence as a market leader (certainly in market cap terms) this should also be a big boost for M&S.

Recently, we also saw online fashion giant Boohoo, which also has no physical presence on the High Street, take over former High Street businesses Oasis and Warehouse. We are going to see more and more big brand e-commerce businesses taking over well-known, but failing, brands that have not caught up with the modern world. Without a strong online brand presence, businesses will struggle.

Without a strong online brand presence, businesses will struggle. 

Although we have seen lots of job losses in recent months, there are new jobs being created. They are not the same types of jobs, but retail is changing. Discount supermarket Aldi has said it expects to create 4,000 new jobs in 2021 as part of a £1.3bn two-year investment plan. The investment would include new and upgraded stores and distribution centres as well as a recently announced ‘click and collect’ service and plans to deliver groceries through a partnership with Deliveroo. In addition, Morrisons is hiring more than 1000 new permanent staff to fulfil online orders through Amazon Prime. After expanding its partnership with Amazon in August, seeing its entire range of goods sold via the ecommerce giant’s website for the first time, Morrisons is now embarking on a recruitment frenzy to meet demand.

For businesses that are behind the curve in their digital presence, collaboration with a strong technology partner could be seen as a good strategy to fast-track their omnichannel offering and even perhaps, switching to an online platform. Regardless of the sales channels, it is vital for all retailers to have a strong and distinct brand, especially at a time when the digital space is allowing new and younger companies to promote themselves globally.

Would you like to know more?

If you would like to discuss any of the above guidance or have other queries about how you can make the right decisions for the future of your business and your income, please contact your usual Blick Rothenberg contact or Daniel Burke, whose details are to the right.