It’s been a tough couple of years for retail. Boarded up windows, CVAs (company voluntary agreements) and restructuring programmes aplenty. With almost 3,000 store closures in the first half of 2019 alone, you wouldn’t be wrong for thinking there might not be a high street left in the near future. Ted Baker just reported a dramatic 193 per cent drop in half-year profits and it’s not just the UK – across the pond the US just witnessed the collapse of yet another fashion retailer, Forever 21, which failed to adapt quickly enough to changing consumer habits. And when the dust settles it’s always online shopping that takes the brunt of the blame.
But is it that simple to blame e-commerce? Can we really chastise consumers’ love affairs with their smartphones for killing the high street, when really they provide shoppers with the best access to your brand at their fingertips?
It’s easy to understand why traditional retail would moan and groan about the driving force of digital – fulfilling e-commerce orders and managing online rewards have a high cost which was never even a consideration on financial statements a decade or so ago.
But the store definitely still has a place in our communities. Many say they shop online because it’s convenient, but it’s also convenient to grab a pint of milk on the way home from work – it just depends on the shopper journey in that moment. The beauty of online is that it can remove the boring and mundane from a consumer’s everyday life. Now, I’m not saying that pint of milk is an exciting shopping experience, but neither are items like washing tablets or sanitary products, which can now be easily be purchase through online subscription services. And take Amazon – I ask you, is shopping on Amazon really that exciting? Of course it’s not, that’s why they have to throw millions of marketing dollars at Prime Day every year. Amazon is simply convenient because you can have your parcel delivered to a click & collect locker to receive the very next day?
Physical stores need to work harder
This is where the retail store needs to really shine – enticing customers in by giving them a reason to get off their sofa and take their eyes away from their Whatsapp conversations, while also offering the slickest online experience for those mundane, everyday shopping tasks, which keeps the brand front of mind for when they want to visit a real store.
And there are clever examples of this already, Sainsbury’s is currently developing an update to its Smartshop pay-and-go app which will soon provide personalised in-store offers as well as the ability to direct customers to products on a shelf while surfacing live stock levels. This shows how a retailer is encouraging customers to use their devices in store to improve the experience of popping in for that boring pint of milk on the way home.
But other retailers are thinking even more innovatively when considering the use of physical space. Take Vodafone as an example: the retailer understands that customers may only interact with the brand every two years or so when they need to upgrade their phone. In response to this, the mobile operator’s new store on Oxford Street offers a co-working space in the basement meaning shoppers have Vodafone on their mind more frequently than every 24 months.
Ikea and B&Q are also shaking up their in-store experience, realising that out-of-town shopping is declining just as fast as the high street, they are hoping to stand out with small-format stores in town centres. Ikea’s new high-street stores offer a limited range of products to take away, while customers can order larger furniture items using in-store tablets for home delivery. “The retail landscape has changed, and we’re adjusting with speed,” said Gavin Shetly, VP of product engineering, speaking at the Tech. Festival in London. “We have a winning formula prices, products, store experience, but we need to put digital in the heart of everything we do.”
And you also have sports brands like Nike and Sweaty Betty offering in-store fitness classes, or at-home work-out videos which are shared over social media. Meanwhile, the famous London department store, Liberty – which is so beautiful it hardly needs to encourage visitors – offers customers creative workshops such as hand lettering from its stationery room.
All of these examples provide a reason to visit a physical store. But what we really need to keep in mind is that experience is very much a perception, as Brooks Clemens who dabbles in advanced analytics for Adidas also pointed out at the Tech. Festival. “The store of the future will hopefully start to understand what the needs are of the customer, and predict what they might be, meeting whatever demographic turns up at their door.” He said that a store which is better informed using data from the outset is more likely to survive today’s turbulent times, because it can adapt quickly and not waste money on experiences that won’t resonate with its customers.
“Take that [data] in, learn from it, surprise and delight.”