Business rate debate points to unevenness of offline profits

Business rates changes, to be finalised in tomorrow’s budget, threaten to increase the digital divide between online retailers and bricks-and-mortar shops. Stores in the capital may see their rates rise by up to 42 percent, whereas retailers such as Amazon, whose warehouses are far from urban centres, will benefit from business rate reductions

But as Amazon closes a deal with Morrisons to place delivery collection lockers across their stores, the ongoing importance of physical stores as part of the retail mix is clear. The upshot of the business rates debate should be to convince retailers of the importance of maximising the impact of their stores.

Ben Boswell, UK & Ireland Director of World Wide Technology, comments: “There’s been a long campaign over the proposed changes to business rates, but what’s clear is that many fear the precariousness of their store-based profits. There have been some interesting attempts to bring the offline store up to date, such as Morrisons’ latest deal with Amazon. But the impact of technology such as IoT-based innovations can give a whole new purpose to the bricks-and-mortar store.

“For instance, retailers are finding that even the most ‘digitally-savvy’ of millennials are willing to engage with store employees if it delivers a better experience. Technology which identifies regular customers as they walk through the door gives retail employees the chance to personalise their service based on past purchasing decisions, adding value to the offline experience.

“Applying technology to the offline store must not become a vanity exercise. Retailers must look to identify real use cases that deliver measurable business value, as they seek to make their offline stores more sustainable into the future.”


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