The retail sector plays a major role in the UK economy, providing jobs for millions and making up 5.2% of the UK’s total economic output as of 2020. A key part of both the UK’s economy and its culture, the retail sector must continually respond to changing consumer preferences and other economic factors. The COVID-19 pandemic has been a major factor driving the sector to investigate new practices to ensure they provide a safe environment for their customers. This has come alongside an increased demand in online shopping and click and collect services.
The constantly shifting landscape of the retail sector provides great opportunities for R&D, and some particular examples are provided below:
Data Collection and Analysis
In recent years, online cookies have transformed how retailers collect and use customers’ data. Improvement in the methods used to target specific groups for advertising will continue to provide opportunities for R&D in the retail sector.
Adoption and development of greener practices
As consumers become more environmentally conscious, the retail sector will be pushed into adopting greener practices. This could be in reducing the carbon footprint of their products by reducing packaging or by researching alternative materials to use in their products that produce less carbon.
Online storefronts have become more important than ever before during the COVID-19 pandemic and have provided a vital resource for many business that otherwise would not have been able to continue trading during lockdowns. Building new or improved online systems to assist customers or retail staff will continue to be an area open to new R&D in the retail sector.
One of our retail clients have had a complete overhaul of their business since the pandemic, and are making the following changes:
They had an existing website, however it was outdated, slow and customers had reported issues with their online orders due to technical errors. The company decided to re-build their CRM system with improved integration to their backend ordering and warehousing system, and also incorporate an updated front-end.
The work undertaken to improve the latency and performance of the system may qualify for R&D, even if the project were to fail. The development of the front end and the appearance of the website would probably not qualify as a qualifying R&D activity, unless the work involved extensive overhaul of the system to achieve.
The company also set out to remove ‘virgin’ plastics from their in-store point of sale (POS) displays. The company worked to develop new material-hybrids to ensure that displays would have the same aesthetic quality whilst retaining their strength and durability, and without the use of plastics. Even though a portion of the work relates to the aesthetic of the display, the work may still qualify, as there are structural considerations which may not be straightforward.
A key part of both the UK’s economy and its culture, the retail sector must continually respond to changing consumer preferences and other economic factors. This has come alongside an increased demand in online shopping and click and collect services.
Ben Conry previously worked for one of the largest financial services consultancies, working extensively throughout Hertfordshire, Cambridgeshire and East Anglia. He has experience working with companies in the retail and fashion industries, as well as in warehousing and distribution. Book your free consultation to discover qualifying activities in your business and see how much your claim could be worth.
R&D Tax Consultant