We’ve been hit with a barrage of reports that suggest big box retail is struggling to keep up with changes to the high street. In July, the British Retail Consortium released data that found retailers experienced their worst month of trading since records began, as Brexit, consumer spending and discounting strategies combined to make difficult trading conditions. It’s part of the reason why brands like Primark, Jack Wills and Schuh, amongst others, are petitioning landlords to cut their rent prices.
And while the British Independent Retail Association has signed the petition, and the independent retail community would appreciate rent cuts, the tale from the high street is different.
Why performance differs
In the face of a challenging economic climate, boutique retailers are increasingly creative and innovative with their store approach, working hard to attract regular and loyal shoppers, and increase high street footfall. They are the community anchors, cornerstones of commercial space that allow shoppers to make conscious purchasing decisions – ensuring their survival with unique retail-tainment strategies that mean shopping remains fresh and exciting.
An example of a retailer following this approach is Cositas, a home interiors and gift store in St Albans. Owner, Emma Bustamante, saw the opportunity that retail experiences provide, so beyond just selling unique, handcrafted items, Bustamante also invites local people into the store to learn everything from screen printing to lampshade making.
Brits love independent shops. Recent research carried out by Vend found that four in five buy in independent shops, with more than a third saying they value the role of independent retailers on the high street, and a similar amount saying they actively choose to support their resident entrepreneurs.
To put this performance into context, we compared the UK’s independent retailers with their global peers in our Retail Benchmarks Report. Providing a deep dive into the performance of 13,000 independent retailers from around the globe, the report provided a snapshot of how the world’s boutique shops measured up region by region.
The most notable comparison was that monthly transactions in UK boutiques were 31 per cent higher than in Australia and 23% higher than North America. Much of this trend is being driven by Brits cherishing the personal service, the impressive product knowledge and shopping advice at the boutiques.
Yet while transaction numbers were higher than their international peers, independents in the UK are tracking monthly revenues at an average of 5.1% lower than equivalents in North America, Australia and New Zealand. Brits pay an average of £34.37 at the till, while Americans splash £44.55 – a real sign of how they are operating in different, difficult economic and political circumstances.
Invest in customer loyalty
Indicating how retailers could climb the international index, the report identified an opportunity to invest in customer loyalty – and the technology that helps to track customer spend. A UK retailer tracks 458 customers through the doors which is significantly less than North America (809), New Zealand (606) and Australia (565).
It’s clear that increasing the number of tracked customers through the door will boost sales. Comprising 20% of your customer base, on average repeat customers generate around 70% of your revenue – and increasing this loyal customer base is going to improve your bottom line. The average repeat customer also spends nearly two-thirds more with a business in their third year of knowing the company than they do in the first six months – clearly illustrating that once you’ve got a customer through your door it’s worth keeping hold of them.
The good news for independents is that thanks to intelligent retail technology running a customer loyalty programme is easier than ever, and much more efficient and effective than the stamp cards of old. Intelligent retail management systems like Vend now have the capacity to keep track of every customer and record their past purchases, offering promotions based on previous buying patterns and even providing special discounts around a customer’s birthday. The system will also show your most loyal customers and allow you to reward them appropriately.
Higor Torchia, managing director, Vend EMEA