Article

Charlotte Mcmurray
Charlotte Mcmurray 12 August 2016

Fashion Vs. Function: Has Online Retail Caused The Death Of The High Street?

Many initiatives designed to save the Great British High Street are focused on entirely the wrong areas. Online Retail isn’t the foe here, believe it or not. Here's an outline of the reasons our traditional High Street has taken a nose-dive, and what savvy retailers can do to make headway on the problem…

Have you heard? The High Street is in terminal decline. Former retail giants like Woolworths, Austin Reed and BHS are leaving behind empty units which aren’t being refilled, and smaller stores are struggling in the face of reduced footfall. Attempts to reinvigorate Britain’s high streets have so far been unsuccessful, even in cases for Mary Portas, and many high street brands are unsure of how to compete with online retail giants to ensure survival.

However, many initiatives designed to save the Great British High Street are focused on entirely the wrong areas. Online Retail isn’t the foe here, believe it or not, so I’m here to outline the reasons our traditional High Street has taken a nose-dive, and what savvy retailers can do to make headway on the problem…

“The Parent Trap” Fallacy

Of the current recommendations for saving the high street, there are two broad areas of focus:

  1. Encouraging businesses to fill empty retail units by reducing or subsidising business rates
  2. Encouraging consumers to visit high streets by reducing parking charges or offering other incentives, such as markets or special events.

While neither of these areas are bad ideas, they make a fatal assumption: that customers don’t shop on the high street because it’s too much effort, or because they’ve gotten out of the habit.

Town planners are basically kids trying to trick their divorced parents into getting back together – if they see each other, they’ll remember the good times and everything will be fine again!

However, just as setting up a romantic dinner won’t really cause a divorced couple to get back together in real life, the cause of the high street’s troubles is more fundamental.

Shops aren’t delivering enough value anymore

In its current form, the high street is not delivering the right value to users, and as we’ve already discussed at length, customers tend to ignore things which do not deliver value to them.

In the case of the high street, it’s easy to see why this point has been missed. Shops are the same as they always were, and haven’t stopped delivering value. However, the world and customers’ expectations have changed, so the high street’s value proposition is not as attractive or as relevant it used to be.

Changing Utility

The high street used to address customers’ needs pretty well. It offered convenience, choice and good pricing.

However, customers how have options that they didn’t before – online retail offers greater convenience via next-day (or even same-day) delivery, virtually infinite choice, and prices which bricks-and-mortar stores often struggle to compete with.

This leaves shops in a very difficult position – the internet has beaten them at their own game. They can’t be more convenient than the smartphone in their customer’s pocket. They can’t offer more choice than THE ENTIRE INTERNET.

Many areas where the high street used to excel have now been permanently overtaken by online retail. There is no going back. Shops will never again offer the most choice, or the highest levels of convenience.

To reinvent themselves and once again start to deliver value to customers on their own terms, shops need to pivot.

But how?

First, they need to let go of the following pipe dreams:

Don’t expect customers to pay more offline than online

If you charge a higher price in-store than online, your customer can literally stand in front of an item on a hanger and order it cheaper from one of your competitors, walk out and have it delivered the next day.

And they will. 83% of smartphone users check their phones before making an in-store purchase, and 30% of those will visit a different retailer’s website for comparison purposes. Ignoring the trend will only result in disengaged customers and reduced performance.

Don’t judge stores by offline sales alone

The revenue generated by stores might not give a full picture of their performance, and it’s possible that they could also support the wider business in other ways.

Judging individual stores on their direct sales alone is short-sighted in a multi-channel environment. Research by the IDC shows that customers who interact with brands both online and in-store have a 30% higher lifetime value than single-channel customers, so it’s important to try to understand the impact stores have on online sales, and vice-versa, to get a more holistic view of performance.

Tracking this is a challenge many brands have yet to crack (the semi-mythical “single customer view”), but is a core priority for both online and offline retailers.

Stop making your employees compete with your website

If you target your employees on in-store sales in such a way that they lose out if customers later buy from your website, you’re likely losing sales and putting customers off.

Employees should represent the interests of the brand as a whole, and help customers interact with the brand in whatever way is most convenient, whether that’s buying in-store or ordering online for delivery later.

Setting digital and store teams against each risks damaging employee engagement, and is just plain bad for business.

The New High Street

If the high street is to survive, it will be in a different form, delivering value to customers in different ways that online would struggle to replicate.

Show-rooming

A core benefit of the in-store experience is the ability to see products “in the flesh”, and that’s a benefit that’s still valued by shoppers of all ages.

However, brands must accept that sometimes shoppers won’t be ready to purchase, even if they’re standing in store with a product in their hand, and might well prefer to come back later, or order online.

While this may not be a lost sale, it does introduce more risk into the equation as users shop around for a better price, so it’s important for brands to understand how and when they can add more value to in-store users and tip the balance in their favour.

The ability to match online prices, ship in items from other stores, arrange delivery of products, or encourage sales of alternatives via your brand’s website should be standard elements of your in-store experience.

Brit fashion brand All Saints kicked this custom off quite a while back, introducing their in-store digital pods and iPads to help encourage online sales in the absence of stock or styles. Since then, other savvy retailers including Topshop, Topman, French Connection and Warehouse (and many others!) have followed suit to bring online retail in-store and create a seamless experience for the customer.

Attribution

The rise of show-rooming should be an obvious sign that a bricks-and-mortar store’s impact on your business cannot be solely measured by what’s in the tills.  Obviously, a core performance measure for a store is the revenue it generates via selling products, but the wider implications of that physical location to the business shouldn’t be ignored either.

For example, if a store sells less physical product, but is an extremely popular location for Click and Collect, it’s clearly delivering value beyond what goes through the tills, and this should be accounted for. A broader understanding of the ways a physical store can affect online sales, and vice-versa, will be key to measuring success on the new high street.

Experience

To deliver real value to customers, shops should be a physical manifestation of your brand experience, not a warehouse of stuff.

This might mean carrying fewer, highly curated lines and encouraging customers to access the rest of the range via the website. It might also mean foregoing product sales as a core purpose of the store, with greater priority given to customer support and creating a unique in-store experience.

It will almost certainly mean investing in high quality point of sale and employee training to ensure that the offline experience reflects your brand in the right way.

Logistics is also a key part of delivering an excellent brand experience via physical stores.

Collections, returns and exchanges should be seamless, and customer data centralised and shared between stores and online. Click and Collect is an established favourite of the online retail world, with 18% of shoppers saying it influences the way they shop.

Reinventing the High Street

Your customers care about what delivers value to them. If your shops don’t, consumers won’t be too sorry to see them go.

To survive in this environment, the high street needs a reinvention, based around the new best ways it can deliver value to consumers. This will require giving up on some areas, where it’s clear that there’s no real chance of bricks-and-mortar stores competing.

More than anything, reinvigorating the high street means no longer treating online as a competitor and a threat, or as a funnel driving footfall into stores. Online and offline can have a symbiotic relationship in much the same way as “competing” digital channels can, if their individual value to users is properly understood and exploited.

Oh, and one more thing…

Online can be used to in fact boost footfall to your store, business or shop, but you need to compose and implement an effective Local SEO strategy to reap the rewards. Luckily, we’ve pulled together this 3-part guide to maximising offline sales through local search optimisation, yours to download for FREE right here. For anything else, drop us a line on LinkedIn, Twitter, or via our Contact Page, and we’ll do our best to assist.

Original Article

Frank Viljoen
Frank Viljoen

The biggest killer of brick and mortar stores' demise is customer service. Optimise the in-store experience, deliver great customer service and the consumer will soon feel appreciated, wanted and remain loyal.

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