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Retail's digital transformation

Speaking at the British Retail Consortium Annual Lecture, our UK Country Manager, Doug Gurr, identified five ways in which digital is transforming retail and called on the industry to work together to help prepare the UK for the future world of work.
on 21 June 2018
This month, Doug Gurr gave the BRC Annual Lecture about the future of retail in the digital era. He said this new era has the potential to provide new, exciting opportunities for industry, consumers and society. As we enter a moment of huge transformation, not just in retail but across all industries, the pace of change can not be underestimated.

Here are Doug's five main observations on digital transformation made at the BRC Annual Lecture, regarding the digital revolution:
  • 1. Democratisation of Retail
    Female entrepreneur at work in her crafts studio
    Digital transformation has provided hundreds of thousands of businesses, small and large, with access to global digital infrastructure and logistics, which have democratised the ability to start and run a business. It’s not just pure online retailers benefitting from this but small and large bricks and mortar retailers are also benefitting from the digital opportunity, too. As they embrace the digital era, businesses are exporting more, boosting productivity and growing revenue to the point where, in some cases, they can expand their physical retail presence as well as grow online.
  • 2. Rural set to gain most from the digital revolution
    Unlocking the digital potential of rural areas
    A beautiful sunset on the Peak District
    Photo by Getty Images
    Digital transformation provides an opportunity to revive the rural economy across Britain. So that, for the first time, an industrial revolution can start to reverse the process of urbanisation and bring prosperity back to rural communities. Amazon commissioned research from Rural England and Scotland’s Rural College to look at the digital opportunities in rural areas, and found up to £26bn a year could be added to the economy and £15bn a year to business turnover, if there is greater digital adoption in rural areas. Small businesses selling on Amazon realise this opportunity every day. More than 10,000 businesses selling on Amazon are based in rural areas, selling their products and services to millions of customers around the world.
  • 3. Omni-channel retail is the new norm
    Shearer Candles
    Increasingly the default setting for success is to be wherever your customers want to find you. With all the focus on digital retail, it’s important to remember that the vast majority of retail spend in the UK is still offline. Bricks and mortar is here to stay, but is changing and evolving to include a mixture of both online and offline. Thanks to easy access to innovation, omni-channel retail is the new norm. Retailers are constantly finding ways to use technology to improve experiences. We’re seeing this for both large and small players – whether it is major brands increasing online sales, or small high street retailers like Shearer Candles, a 120-year old family business in Scotland employing a team of about 50, the trend both on and offline is consistent.
  • 4. Retail is finally becoming global not local
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    Daily activity at Amazon's Prime Air hub at Cincinnati/Northern Kentucky International Airport in Hebron, Kentucky. Photographed June 27, 2017. (JORDAN STEAD / Amazon)
    Photo by JORDAN STEAD / Amazon
    The digital era is finally enabling retail to become global. Tens of thousands of small retailers in the UK use digital tools and services daily to reach a global audience and achieve billions of pounds in export sales. We see this in our own business – over half of our total global unit sales come from independent third party businesses. Over 60% of these UK based Amazon sellers export too, last year achieving £2.3bn in export sales.
  • 5. Machine learning will let us run better businesses
    With better access to AI and machine learning, the digital era has opened doors for businesses large and small to innovation that delivers greater selection, value and convenience to customers. At Amazon we use machine learning to help retailers export, working with hundreds of millions of items in a multitude of languages, using natural language processing and supervised machine learning to ensure customers get the products they want and sellers can predict what customers will need.
  • In short, there could be a lot of change coming, but the fundamentals of retail have not changed.
    Customers still care about the same things and great retailers will need to focus as hard as ever on the three basic needs of selection, price and convenience. And that means that the future for retail is bright. The retail industry has adapted to three industrial revolutions and is now poised for the societal and economic changes of a fourth, and the digital opportunities it brings.

    To fully grasp these digital opportunities, our focus must be on developing core skills in STEM, coding and engineering in our workforce for the retail industry to flourish.

    As we say at Amazon, it’s still Day 1.
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