Three Sea Changes Happening in the Industry24 Mar 2022 14:25
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Next’s Simon Wolfson: 3 ‘sea changes’ happening in the industry
Next’s CEO Lord Simon Wolfson has outlined three ways in which the retail industry is changing as the world begins to emerge from the coronavirus pandemic.
“The pandemic accelerated the transformation of our industry, delivering in a couple of years, changes we expected to take five or more,” Wolfson said. “As we emerge from the pandemic, and despite the political and economic uncertainties, the future shape of our industry is becoming clearer.”
He said there are three related “sea changes” appearing that are central to the way in which the industry is moving. These included:
An abundance of choice
"The change to our industry is more profound than a simple shift from high street stores to shopping online. The internet has served to dramatically increase shoppers' choices; bringing consumers more designs, more brands, more colours, more sizes and broader price ranges.
"So today, consumers in even the remotest parts of the UK can enjoy a choice of products that would put to shame the very best of the world’s high streets in the early 2000’s."
The growth of online aggregators
"In the last five years the competitive environment has changed beyond recognition. Online aggregators, websites that sell many different third-party brands, have become increasingly important (Asos, Zalando, Tmall, Myntra, and many others, including Next); while many businesses, that seemed part of an immutable retail landscape, have all but disappeared."
New world for new brands
"It has never been less expensive or faster to set up and roll out a new brand. Gone are the days when new brands needed to spend decades developing a store network.
"Today, brands can deliver their own fully functioning website, with national reach, in a matter of months (albeit the complexity and cost of website functionality are rising rapidly). More importantly, online aggregators can enable new brands to gain access to millions of customers worldwide and overnight."
Wolfson said that as time goes on, it "appears likely that there will be a greater number of brands, with wider geographical reach, served by a smaller number of aggregators".
He said that in this environment, Next's aim is clear: (i) to extend the Next brand’s breadth of offer and international reach and (ii) strive to build an aggregation business that is the natural first choice for fashion, homeware and beauty customers in the UK and Eire.
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