“Chief executives often say to me that because disposable income has been under pressure for three or four years that people need to be encouraged to spend,” Dickinson said. “I don’t think there is such a thing as a normal sales cycle anymore. That’s good for business as it means there is all to play for. Get the rest of your proposition right and you will not have to offer so many promotions or discounts. ”
On deflation in the wider economy Dickinson believes the UK is unlikely to suffer the fate of other well-known stagnated economies such as Japan.
“If deflation also results in a dampener on wage rises then it can leave you like Japan. But I’m not seeing this in our economy,” she said. “We have low inflation but income and wages are picking up. That should be a driver for prices to start rising again. They can’t keep going down. There has to be an end!”
Dickinson said it may take some time for the increase in disposable income to translate to even higher retail sales growth. “It will take time to change ingrained spending habits. Because of technological changes the focus will remain on price,” she predicted.
She believes retailers don’t need to ramp up investment to try and take advantage of better economic times as they have not been afraid to splash some cash during the recession.
“We’ve spent a lot of time talking to Government about innovation and investment in retail. It may not be as obvious as a pharmaceutical firm spending multi-millions on a new drug but retailers are constantly looking to change their propositions,” she stated. “Money is being invested on meeting tablet consumers demands and home-delivery rather than physically building stores.”
She ends by returning to the beginning and the hopes of a digital high street revolution.
“So much of this is about hearts and minds and retailers seeing digital as an opportunity not a threat,” she said. “Those that do have a great opportunity.”
Tomorrow in the last instalment of the series we take a look at an e-commerce action plan for your company…