A week doesn’t go by without another retailer hitting the headlines. M&S, Poundworld, Carphone Warehouse, Mothercare and House of Fraser have all recently announced store closures, rocking the already fragile high street.
The dominance of online shopping has been cited by many as the reason for the closures, with the allure of cheaper prices and armchair shopping leading to a decline in footfall on the high street. So what next? While the future remains uncertain, one thing is definite, ‘business as usual’ is not an option.
We are living in ‘the age of the customer’ – a world where customers leave feedback, are guided by others’ feedback and aren’t afraid to try somewhere new. With this in mind, here are the three top ways retailers can ring in the changes and fend off the competition:
The physical store has different value
Retail real estate is a very costly asset for a company. Often in prime locations, space here is at a premium. Some retailers might consider reducing their footprint and use their physical store in a different way to engage with shoppers. Indeed, the store may become more of a showroom for products – something the online world has done with great success.
Indeed, furniture retailer Made occupies prime London locations to enable potential customers to view its products before purchase. Additionally, the store could provide customers with a place to access experts, learn about trends and threats – like O2’s concept stores in Manchester and London.
The traditional store now has to be part of a wider ecosystem
The ‘Amazon effect’ has certainly had an impact on the high street – customers like the convenience of shopping online – enjoying quick check-outs with no queues, competitive pricing, access to reviews – all without leaving their house. On the flip side, the high street offers buyers the chance to touch and feel those items and to look for things that you can’t think to search for.
However, to truly succeed physical stores must be part of a wider offering to customers. Those brands with an omnichannel presence (mobile, web, store) are more likely to attract and retain customers than those who focus on purely a physical only presence. Indeed, a Medallia study of 46,000 consumers found that omnichannel customers spend 17% more on average over a six month period and purchased 15% more items compared to single-channel customers. So it’s worthwhile investing in the infrastructure to better engage with your customers on multiple platforms.
Think experience and personalisation
It is no longer enough for retailers to differentiate on product or price point. Today’s customers want an experience. They want to engage with a brand. They want to be heard and want their frustrations and desires to be addressed. Customer experience is key here, something which hasn’t gone unnoticed by high-street heavyweight John Lewis. It’s recent flagship opening in Westfield London has been designed around customers’ desire for ‘experiences’ with 23 different services available to book through its dedicated experience desk.’
In the age of the customer, retailers can’t afford to rest on their laurels. Innovation and experience are key and are what will ultimately keep this vital sector afloat. The high street has the power to offer customers something new, something personalised and an experience that no online-only outfit can provide. The opportunity is certainly there for the taking, but only time will tell if retailers will take heed of the warnings and embrace change.
Kareena Uttamchandani is a senior manager and solutions consultant at Medallia, which aims to help businesses ‘win’ by improving customer experiences.