“Brick and mortar stores still have a very real, and profitable place within the overall proposition offered by retailers.”
Retail Apocalypse, now?
Whilst I am sympathetic to the plights of retailers across the UK, I can’t help but feel calling recent events an “apocalypse” seems a little sensationalist. Not dissimilar to retail banks, I believe brick and mortar stores still have a very real, and profitable place within the overall proposition offered by retailers.
We have all seen the analysis on the big high street names that have been lost this year, with Toys R Us possibly being the most shocking. However, if you look behind the headlines you will notice one striking commonality; a delayed reaction to the changes in consumer buying behaviours. With 24.1% of non-food spend now online, significant and continued growth is clear, and for every traditional retailer struggling through there is another one riding the crest of the wave, be that Smyths Toys taking over some of the Toys R Us stores, or Amazon’s recent takeover of Whole Foods.
Argos reacted to the challenges of online competition by incorporating a customer friendly online experience that can be delivered to your home in as little as four hours, or for collection from one of their stores in under one hour. Customers within the store can use the same technology to complete their purchase, thus making the transaction as smooth as possible. In a similar vein, John Lewis has expanded over the past year bringing their total stores up to 50, with more planned over the course of this year.
By investing in their partnerships and putting self-serve click and collect points in Waitrose stores, as well as introducing two-hour delivery slots for home delivery alongside standard delivery terms, John Lewis have been able to offer unrivalled choice for their customers’ needs. Further investment in “experience desks” across five stores, a ‘concierge style’ service to help customers organise their day, gives customers another reason to visit.
Paula Nickolds, John Lewis’ managing director, has said:
“As part of our plans to differentiate the John Lewis brand and to reinvent the department store for the 21st century, our shops continue to be a place where customers come and experience our brand – the physical manifestation of what we stand for.”
Over recent years, customers have really had their heads turned to convenience and practicality of online shopping. Commodity purchases, with low emotional value are treated like transactions to get done and out of the way, not dissimilar to checking your bank balance via your smartphone, or pinging money through your favourite app. It is obvious to all that high streets are changing and retailers are consolidating, relocating to purpose built shopping centres that provide a more ‘complete experience’ and the opportunity to ‘touch and feel’ products while receiving advice.
Gone are the days of busy working families piling in to towns on Saturday mornings to rush around the shops picking up the necessities to get them through the following week. One click on their mobile phone and the shopping is ordered, the fancy dress costume is on its way and birthday presents wrapped and delivered. This has freed up weekends for another purpose; physical shopping has shifted from a practical activity to an emotional one.
When we talk about the digitalisation of retail I think we are really discussing what customers now want from a store, and I don’t believe this is technology, it is the time technology has provided back to us that we can now invest into leisure and entertainment… so why not make your stores more entertaining and emotionally engaging?
I was recently in the market for a new phone, having jumped ship from Apple to Android (unsatisfactorily), the iPhone X was the technology of choice, but before committing I wanted to physically feel the phone and interact with it. I needed the certainty and to create the attachment, and I couldn’t do that online. After reading reviews, searching through Twitter comments and asking friends about it on WhatsApp and Instagram, I headed off one afternoon to the local Apple store. These stores still draw me in like a kid in a sweet shop; I pawed over the phones, asked questions, look at the accessories, fell in love and then ordered it online over lunch. I clearly used the store to satisfy the emotional requirements of the purchase, arguably some advice too, and then went online for the practical transaction.
Customers want and demand unique experiences that feed their emotions. The challenge high street retailers face will continue, and doing nothing is simply not an option. My good friend Duena Blomstrom discusses this at length in the context of retail banking in her new book, Emotional Banking. Technology has its place and our personal digital devices are playing an increasingly larger role.
Few of us have the interest to study data analytics, or spend any of our time wondering how AI can help improve our purchasing decisions, but a VR experience instead of physically trying on clothes might be appreciated, as would an online concierge service that brings perfectly matched products to you, based on prior choices and learned preferences.
For retailers, banking or otherwise, the survivors will be those with the creativity and insight to react to what their customers want; an honest and engaging brand experience in store that is integrated with the convenience of online sales and service.
It is often subconscious, but loyal customers have come to expect that their favourite retailers know them and will present them with the right services at the right time.
Meeting this desire for experiences and expertise in store, customers will once again have reason to visit.