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Retail challenges you'll face in 2020 - and how to overcome them

It’s no secret that these are challenging times for the retail business - but is it really all doom and gloom?

It’s sometimes said that the bigger the challenge, the bigger the opportunity. And it’s true that adversity often creates a great breeding ground for growth and innovation.

In this article, we’ll take a look at the main retail challenges that are awaiting retailers as we head towards 2020, and discuss some of the opportunities that await those who meet them head-on.

To make 2020 even smoother for your retail business, why not look into how SumUp can help.

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Channel shift

One of the most commonly cited reasons for mounting pressure being applied to the high street is the rise of eCommerce. Deloitte research suggests that online sales now make up 20% of all retail sales in the UK – a number which is nowhere near saturation point and continues to grow rapidly.

It’s worth considering why eCommerce is so popular, and why its growth continues to outstrip brick-and-mortar retail. Among other things, it’s about convenience, the ability to access essential information like product descriptions and reviews, and the power it gives consumers to shop around for the most competitive price.

Online retailers also have the advantage of being able to use sophisticated digital marketing tech like display ads, retargeting and email. These all help amplify the number of touchpoints with a customer, nurturing them towards a sale, further funnelling business away from the high street.

The good news is that there are ways to bring these benefits into the physical store environment, creating the best of both worlds.

How to overcome: Actually encouraging your customers to go online in the store environment – embracing showrooming and web rooming – is a simple first step. Some retailers include tablets in their store, others simply offer free Wifi. If you choose the latter option, you should also consider Wifi marketing - providing wireless internet access to shoppers, and then using that as a channel to send them messages and promotions.

According to data from Cisco, 96% of consumers prefer to shop at stores that have free Wifi, and they’re also more likely to return. What’s more, Wifi marketing gives you an opportunity to follow up with personalised messages and promotions. You can share targeted emails and social ads with your store customers and, over time, use their in-store browsing behaviours to further personalise the content.


With widespread talk of store closures and empty retail units, you might think that competition would be lower rather than higher.

On the contrary, what we’re seeing is the evolution of ‘fewer, but better’ retail stores. Stores are increasingly working harder to generate footfall and create amazing experiences that their customers absolutely love.

So what does this mean for you? Well, as more brands invest in technology and stellar customer experience, things that were once seen as luxuries – or ‘nice to haves’ – quickly become staples and expectations among customers. The benchmark for in-store customer experience is on the rise, perhaps faster than at any time before. It needs to be slick, seamless, quick, easy, exciting – and it needs to make them feel special.

How to overcome: More than ever, it’s important to keep an eye on the competition and make sure you’re doing everything you can from an in-store experience perspective. Keep up to date by reading relevant blogs like:

(Of course, you should also definitely keep up-to-date with the latest posts right here on the SumUp blog!)

As well as reading up, make sure to watch what your local competitors are doing, and, perhaps most importantly, speak to your customers. This is the best possible way to keep your finger on the pulse of what others are offering, as well as what your customers want and need.


Technology is one of those rare things that somehow manages to be both a gigantic opportunity and a huge challenge.

There’s such a dizzying array of retail-related technology available, it can be difficult to know where to start. Retail businesses increasingly depend on technology tools to manage a wide variety of business processes. This includes tools like mobile payments, accounting, expense reporting, point of sale, stock management, marketing, loyalty and more.

To further complicate things, it’s not just choosing which technology to use - but choosing technology that can work together in one integrated ecosystem, making sure that information is shared and a single source of truth is maintained.

How to overcome: If there’s one general piece of advice to pass on here, it’s to move as much of your business workflow into the cloud as possible. Make sure that your chosen tools can integrate and work together.

Queue busting

A lot of the challenges we’ve outlined have revolved around positive customer experience.

And, as we’ll all probably know from experience, nothing hurts that customer experience quite like standing for an age in a concrete-footed queue waiting to complete purchases.

Now, faced with the convenience of eCommerce - and with competitors striving to optimise customer experience to meet that challenge - queue busting is an issue taking on ever greater prominence moving into 2020.

How to overcome: Some queues are inevitable in retail, but there are certain things you can do to minimise them. Firstly, it’s important to identify your busy periods, and ensure that your stores are properly staffed when they need to be.

Another possible action point is to improve your transaction time by making checkout and payments quicker and simpler. Choosing the right payment partner is a huge step in that regard.

Again, technology is playing its part here, with companies like Starbucks implementing mobile ‘order ahead’ technology, much to the delight of their customers. While other queue busting applications like scan-as-you-shop technology are also coming to the fore.


We’ve talked a lot about tech, disruption and societal changes, but not all the challenges retailers will face in 2020 are new ones. Many of them are age-old, like talent acquisition, retention and training.

A recent Indeed survey revealed that 70% of retail employers have difficulty finding in-store candidates with the appropriate technical experience, while 82% struggle to find candidates with cross-functional experience.

The challenges don’t end there. Retail also has a notoriously high turnover rate, particularly for part-time employees. And a CAP study found that it costs, on average, $3,328 to find, hire and train a replacement for a $10/hour retail employee.

Any store’s front-line employees are fundamental in driving efficiency, productivity and customer service. They are, after all, the ones your customers see, hear and interact with.

That’s why such a great deal of your success will depend on giving them the tools, knowledge and enthusiasm to be at their best every day.

How to overcome: It’s more important than ever to build your business around ‘why?’ This means making it as clear as possible what you’re trying to do as a business, and how each person fits into that goal. Make sure there are career pathways in place, too - as your business grows, recognise the people who’ve made this happen.

And don’t forget, knowledge is power. The more time and resource you can invest into building your team knowledge, the better. Again, technology is on hand to help - tools like Myagi, for example. Myagi is a training platform built specifically for retail, with video content available on-demand for your employees, so they can learn during their downtime.


We are quickly approaching the ‘cashless society’ we’ve been promised for so long. Cash payments made up 62% of the total in 2006, 34% in 2017 and are predicted to be just 21% by 2026, which is a staggering drop.

This is of course driven by consumer preferences, with contactless payments more than doubling from 2017 to 2018, but the benefits of offering cashless payment options are far from limited to customer convenience.

The costs associated with cash and traditional credit are also being rapidly undercut by solutions like our own.  A Visa study actually estimates that some businesses could save up to £6,000 by switching to card payments only.

How to overcome: Again, customers are fickle and demanding and competition is sky-high. Offering flexibility around payment types is non-negotiable. If you don’t already offer quick, seamless card payment options, you need to start. If you already do, then you should shop around to make sure your per-transaction costs are as low as they possibly can be.

Another great way to overcome this challenge is by choosing to work with SumUp.

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Rising costs (and politics)

Tied into the above, there’s no getting around the fact that things are getting more expensive. Wages - which make up 46% of operating costs for retailers - hit a ten-year high in the UK in November 2018.

But there’s also business rates, commodity prices, pensions and plenty of other costs that are up - all set against the backdrop of reduced customer confidence and increased competition, both online and offline.

And, despite being so close to making it through the whole article without mentioning it – we need to talk about Brexit. The UK’s planned departure from the European Union has already put retailers under pressure, with a weak pound driving up import costs.

Of course, it's all speculation at this point, but British and European retailers certainly need to keep an eye on the news in this regard.

How to overcome: It’s really important to leverage every possible saving to remain as lean and competitive as possible. This means speaking to your existing partners and suppliers to get the best possible rates they can offer, but also looking into the actual tools and technology you’re using.

In closing...

2020 looks set to be another challenging and uncertain year for retailers. But to quote John Masefield, "To most of us the future seems unsure. But then, it always has been..."

By approaching these challenges with energy, optimism and commitment – while recognising that the benchmark is going to be higher than ever – retailers stand the best possible chance of growing and thriving as a new year unfolds.


Ashleigh Grady