The top trends affecting the retail industry: a guide for graduate job hunters
Retail is a changing sector. To succeed in the recruitment process for a graduate role it is vital that you are aware of the trends affecting the industry and consumer spending. You will need to know how these trends affect:
- the retail industry as a whole
- the retailer that you have applied for
- the retailer’s competitors.
Why do graduates need to know about retail trends?
On an application form or in an interview for a graduate retail role you are likely to be asked commercial awareness questions. These might include outlining the challenges and issues that the retailer or industry is facing, or making suggestions about how the retailer might improve its store. Further down the line, assessment centres commonly use case study exercises and presentations to assess candidates. Again, this will require you to demonstrate your commercial awareness. You will need to have researched trends thoroughly in order to give informed answers at every stage during the selection process. Recruiters want candidates who can show their understanding of and interest in the sector.
Retail commercial awareness: things to look out for
If you’re trying to develop your retail commercial awareness, below are some of the things that you should be brushing up on. Use these as starting points for your own research into the sector.
Retailers and their competition
Retail is a highly competitive area and you must be aware of which retailers are in competition with one another. In particular you need to know who the main retailers are and have an understanding of their similarities and differences. Bear in mind that retail is very fast moving so just because one retailer is in the lead today, it doesn’t mean that they always will be.
Current example: the rise of the discount supermarkets
Discount supermarkets, in particular Aldi and Lidl, have grown rapidly in popularity across the UK over the past few years and they are continuing to pose a threat to long-established retailers. In response to this, retailers are having to adapt and develop new strategies to challenge the success of the discounters. This has so far included things such as implementing a ‘price war’, creating new product ranges, and focusing more on smaller, food-based outlets to meet the needs of commuters, such as in train and petrol stations.
Challenges to/developments in the retail sector
If you are applying for a graduate job at a retailer, recruiters will expect you to be aware of what is affecting the sector in general as well as what is affecting the particular company that you are applying to. You should also have some idea of how retailers are adapting to overcome any changes or difficulties and the impact that this is having on their success.
Current example: the new National Living Wage (NLW)
As of 1 April 2016, everyone aged 25 and above earns a minimum of £7.20 an hour, which is 50p more than the previous rate of £6.70. Those retailers that do pay non-managerial employees the minimum wage will need to absorb the extra costs of the higher wage bill. They could do this in a variety of ways: by raising the prices of products in-store, by accepting the loss that they are likely to make, or by reducing their expenditure elsewhere within the business. Savvy graduates should be aware of developments such as the NLW and consider how different retailers might respond.
Current example: the continued growth of online shopping
Online shopping, on computers, tablets and smartphones, has long been on the rise and the impact that this is having on retailers is increasingly visible: if fewer customers are buying goods in-store, this can result in retailers focusing more on their online presence and scaling back plans to open new stores. In February 2016, for example, Morrisons teamed up with Amazon and later this year will begin supplying it with groceries to be sold to Amazon customers. Amazon’s move into the UK’s online grocery market could pose a threat to the sales of those retailers that have so far dominated it, such as Tesco, Sainsbury’s, Asda and Ocado.
Changing concerns of retailers
Retailers are almost always in the news and their prominence in public life means that their actions are often heavily scrutinised. As such, retailers have to be aware of the concerns of their customers and work in line with them. They also have to work hard to promote a positive image within society. If they don’t, it could damage their reputations and cause them to suffer financially as a result.
Current example: the ethical sourcing and manufacturing of products
Where and how products are made has been a prominent issue within the retail industry. As a result, retailers need to be increasingly transparent about their relationships with suppliers and many have sections of their corporate website dedicated to providing information on the sourcing and manufacturing of their products. Waitrose, for example, has for a long time made its support for ethical sourcing and British produce a unique selling point.
Current example: social responsibility and food waste
In March 2016 Tesco announced that it will no longer be throwing away unsold food, but will instead be giving it to charity. This came shortly after the introduction of a new law in France in February 2016, which requires all French supermarkets to give unsold food to charity rather than disposing of it.
Doing further research
You need to thoroughly research these trends as well as any others you come across before applying for a graduate role in retail, and especially before any interviews you might have. Retail trends and stories about particular retailers are often covered in the mainstream media, as well as in specialist news outlets. You can also research retail trends by looking at retailers’ websites – keep an eye out for information and press releases detailing any significant changes such as store closures or the introduction of new initiatives.