Fall of the high street — can retailers survive?
The UK’s high streets are under attack. From the continued rise of online shopping, which has led to a reduction in footfall, to increases in business rates and the Living Wage, Britain’s retailers are struggling. The decline of the British high street has dominated the headlines in 2018 with in excess of 1,000 store closures already and tens of thousands of retail jobs either lost or at risk.
Debenhams recently reported a record annual loss of £491.5m, leading to the announcement of the closure of 50 of its 165 stores. But Debenhams is just one of a growing list of retail brands that ran into trouble in 2018, with others including House of Fraser, Toys R Us, WHSmith and Carpetright. I fear they may not be the last of the casualties we will see.
But what’s driving this decline? Looking at Toys R Us specifically, we know the business was heavily in debt and while the encroachment of online retailers wasn’t necessarily the sole cause of its issues, its lack of investment and innovation in its ecommerce platform probably played a role in its demise.
The rise in popularity of online shopping has certainly been blamed for much of the high street’s woes. We know that consumers are increasingly spending their time online, especially the younger generation, but is online shopping really to blame?
A quick scan of the news headlines over the past few years and the reasons behind the high street’s challenges are many; the increasing dominance of Amazon, changing consumer behaviour, our addiction to smartphones, a lack of support from the government, the UK’s unpredictable weather… the list goes on.
Whatever the reasons, we know that shoppers are abandoning the high street. But retailers can’t continue to do business in the same way they have been doing and expect to see a different outcome. They need to adapt. I truly believe the high street can be revitalised but it’s up to retailers to spur that change and draw shoppers back into stores.
Play to your strengths
One of the greatest advantages bricks-and-mortar retailers have over their online counterparts is their unique differentiators, the most important of all being the sensory experience physical retail offers. Shoppers want to see, touch and feel the merchandise in-store.
Whether that’s trying on a pair of jeans to check the fit; or feeling the quality and comfort of a new sofa; these are experiences that simply cannot be replicated online.
The customer experience is another important differentiator, making the product almost secondary to the overall shopping experience. Physical retailers can design the in-store environment to be as appealing as possible, through design and layout, and clever technology that enhances the experience, to ensure shoppers spend more time browsing and come back time and time again.
There’s also the human factor to consider. Despite the fact that many of us choose to buy online for convenience, we still enjoy interaction with other people. Sales staff can be empowered through technology (think mobile payments like Apple stores have) so the shopping and payment experience is streamlined, but still add the human touch to the process.
Make shopping an experience
We’ve already seen retailers turning shopping into more of an experience. But retailers are taking things even further and venturing into experiential marketing or ‘shoppertainment’.
This can range from making small changes in-store, such as adding digital signage throughout departments, to creating full-on theatrical experiences, such as the John Lewis store in Oxford.
The store, which opened in 2017, features an Alice in Wonderland theme, and the venture resulted in more than 300 staff receiving acting lessons. The retailer’s MD Paula Nickolds said it was all part of a plan to “reinvent the department store for the 21st century”.
The brand isn’t alone in using experiential marketing to change the way shoppers are shopping and viewing the high street.
Nike’s new flagship store, due to open in New York in early 2019, will feature sporting experiences, customisation opportunities and style advice. In London, the Oasis store on Tottenham Court Road offers shoppers manicures and pedicures, designed to add value and give customers a reason to stay longer.
Another retailer investing in experiential retail is Selfridges, who recently opened a free indoor skate park, complete with skating lessons, which coincided with the launch of its new designer streetwear department. The initiative was introduced as a result of customer research and insight into the way menswear categories are shopped today and would increasingly be shopped in future.
Shoppertainment grabs headlines and can certainly draw people into stores, but these more experiential initiatives must also deliver commercial value to the business and encourage shoppers to spend money while they’re there.
Many of these experiences have been implemented in flagship stores, but the principle remains the same for retailers across their estate: give shoppers an incentive to visit stores, stay in them longer, and then want to return. And importantly, incentivise them to spend more when they do.
The bigger high street picture
The revival of the high street should not solely be the retailer’s responsibility. Of course, they have a crucial role to play in bringing the high street back to life, but we should also be looking at how we can revitalise the high street as a whole. That means more favourable tax rates for businesses, safer spaces like pedestrian-only marketplaces, cheaper parking facilities, and including more cultural and social events.
Moving forward
The retail landscape will continue to change, but there should be an increased effort on all sides to tempt shoppers back into stores. The key to survival is change; just what kind of change and to what degree? That’s up to retailers. The high street isn’t going anywhere, so long as we all work together to ensure it is transformed into a destination that people actually want to visit.
By David Buckingham, CEO, Ecrebo
