Marketing the high street
- 29 June 2018
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Each week brings more news of British high street retailers shutting up shops. What role can marketing play in responding to this downturn? How are shops combining technology with human interaction to turn the tables?
The year 2018 is shaping up to be an annus horribilis for Britain’s high street. On Monday, creditors for House of Fraser approved a plan to cut 31 of its 59 premises in the UK, with a total of 6,000 job losses.
House of Fraser is just the latest example of a retailer struggling to stay afloat amid challenging conditions. Mothercare, M&S and Waitrose are just a few of the big brands to announce store closures in recent months. The fact that Toys R Us and Maplin both entered administration in February shows how serious the situation has become.
What role can marketing play in alleviating the impact on retailers and preparing their brands for this new reality? The first step is to understand the dynamics at work.
The rise of online shopping
For many, the culprit is hiding in plain sight. According to the Office for National Statistics, internet sales increased by 20 per cent in the year to May 2018. Online shopping now accounts for 18 per cent of total retail purchases, up from 14 per cent in 2015.
Behind this growth is the steady improvement in data connectivity, allowing customers to use their mobile phones to make more purchases out of the house. According to eMarketer, almost 60 per cent of e-commerce sales took place via mobile in 2017. Improved user interfaces have made the customer journey seamless, preventing drop-outs and boosting conversation rates. Meanwhile, retailers such as Amazon have overcome many of the fulfilment issues that blighted the early days of internet shopping.
However, according to Andy Tow, managing director of Retail Marketing Group, the rise of e-commerce doesn’t tell the whole story.
“As more and more British retailers announce nationwide store closures, online shopping looks like a rising juggernaut destined to demolish the high street. But with 81 per cent of UK consumers identifying the physical store as vital to the shopping experience and 70 per cent still enjoying the full encounter, traditional retail shopping remains a steadfast British pastime.”
Chris Daly, chief executive of CIM, agrees that we’re witnessing a split between ‘traditional’ and ‘digital’ customer behaviour: “Retail is increasingly becoming a tale of two halves: online versus in-store. Online shopping offers consumers the freedom to choose the best deals at their fingertips, with shoppers of all ages becoming more comfortable at purchasing online.”
How marketers can navigate the new normal
Tow believes that, in order to maintain a presence on the high street, brands need to be smart enough to make digital and physical shopping work together for the customer.
“To future-proof bricks and mortar, marketers now need to develop a strong store engagement strategy to champion the experience and real ‘human’ interactions,” he says. “Transitioning the store into a destination is crucial in order to adapt to the consumers’ increasingly digital lifestyles.”
For example, Tow suggests in-store brand ambassadors who can “empower the consumer to make the right decision for themselves by eliminating confusion and doubt, because they intimately understand both the product and individual shopper demands”.
For him, this combination offers the best of both worlds, mixing “the irreplaceable emotional connection and the convenience of a seamless, interactive and digitally intelligent shopping experience that today’s shoppers demand”. He adds: “This human/tech interface is the future of high street retail.”
Some forward-looking stores are beginning to embrace augmented reality as a way to attract curious shoppers, solve genuine customer problems, and bridge the gap between physical and digital shopping. Not only does this grab attention, it can help differentiate a retailer’s offering, and help retain customers. Many firms are finding that AR is more flexible for this purpose than virtual reality, which some customers find to be almost too immersive.
Westfield London recently unveiled a retail concept environment, Destination 2028, which demonstrated what the future of shopping might look like. The idea features indoor farms, waterways, mindfulness workshops, and paths embedded with artificial intelligence. This illustrates how the concept of shopping could morph into an experience that combines eating, wellness and relaxation.
Meeting the challenge
For retailers, these issues represent an existential threat. However, ensuring the future of Britain’s shops goes beyond one narrow sector. Alex Schlagman, co-founder and CEO of savethehighstreet.org, recently told the BBC’s The Big Questions his rationale for campaigning to preserve Britain’s stores.
“We have half a million retail outlets, over half of which are run by independent business owners. Hundreds and thousands of livelihoods are at stake. The high street feeds a vast interconnected network of supplier industries and fuels the local economy. The high street is a hub for our local communities to interact.”
For Schlagman, although physical shops are under threat, the fact that Amazon has invested in Whole Foods gives the industry room for optimism. “The largest online marketplaces have been built by leveraging the high street – whether that’s Rakuten in Japan or Alibaba in China – they all have high street in their online strategies.”
It seems that for those retailers agile enough to back the right technology and strike strategic partnerships, the future isn’t necessarily doom and gloom, as long as they can meet consumers’ expectations. Even in this year of retail storm and tempest, the old adage might still be correct – the customer is always right.
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