Retailers ‘need to adapt for an urban future’

way ahead: Andrew Revel of the Retail Institute talks at the Innovation Network event.Picture: Simon Hulme.
way ahead: Andrew Revel of the Retail Institute talks at the Innovation Network event.Picture: Simon Hulme.
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Increased urbanisation is changing the way retailers think about consumers, an industry expert has said.

Urbanisation is a mega trend that will affect retailers of all sizes, according to Andrew Revel, commercial manager of The Retail Institute.

Speaking at an Innovation Network event looking at the consumers of the future, Mr Revel said more people living in cities is having an affect on all businesses.

Mr Revel said: “Approximately 55 per cent of the world’s population currently lives in cities or in urban areas. That’s expected to be two-thirds of the global population by 2030.

“In 1900 it was about ten per cent of the global population living in urbanised areas.”

As a result retailers will have to think about how they get goods to consumers. This boom in urban living has seen a rise in more convenience stores and click and collect offerings.

“This is having a really, really big impact in terms of where the opportunities are at a commercial level but also in terms of the impact it is having on a social level,” Mr Revel said.

Many grocers are already focusing on small format stores but chains from other sectors, such as DIY retailer Screwfix, are also eyeing up convenience stores as well.

Vending machines and drones could play an increasing part in particularly dense populations with Google developing its own delivery drone.

Mr Revel added that single occupancy rates was having an impact on the way consumers shop.

He said: “Other big impacts of urbanised areas is single occupancy living.

“There’s been 80 per cent increase globally in the number of people living by themselves between 1996 and 2011. This has a big impact in terms of what we buy.

“We tend to buy smaller portions of things if you’re buying food and drink, we tend to buy things in smaller quantity but also we want more choice.

“We’re likely to have a wider variety of things so this creates challenges.”

Mr Revel added that it wasn’t just young and old people who accounted for single occupancy, but single occupancy rates are reflected across all demographic groups.

“Added to that is that you get people living with their parents longer simply because they can’t get onto the property ladder. But when they do get a property they live by themselves,” Mr Revel said.

Family groups are also becoming smaller and that impacts on what people are buying and how they are shopping.

Mr Revel said: “The average size of a family in the EU is 2.3 children. The key thing that is driving this is the age at which women have their first child. Women are having children later, this means that they are spending more money on themselves for longer. Then when children come along they tend to have a higher level of disposable income. People are focusing more money on children. They’ve got less children so they focus more effort on the children as well.

“In the UK the average age a lady has her first child is 29.8 years. That’s having a massive impact on what people are buying and how they are buying.”

The ageing population will also have an impact, with Mr Revel saying that there will be a “significant” increase in items such as medicinal products.

The Innovation Network event was hosted by The Yorkshire Post in partnership with Leeds Beckett University’s Enterprise and Innovation Hub.

Internet of Things on its way

The consumer of the Future event also looked at the potential impact of the Internet of Things.

Simon Charlton, commercial director at software systems company – Columbus Global, spoke about the real world benefits of the Internet of Things to businesses and consumers.

Mr Charlton said awareness around data and how it is used by businesses is growing.

He added: “It’s fantastic having big data and lots of it but traditionally we’ve done very, very little with it. All we’ve done is let the systems collate all that data and then struggled to get that information out of it at the end of the month.”