The UK High Street: It’s Not An Apocalypse, It’s A Revolution
Look back 12 months ago and the British high street would look very different from what it does today. Fast forward another 12 months and you can be certain it will be near unrecognisable.
2018 so far has been characterised by some of retail’s biggest names falling by the wayside. Toys R Us, Maplin, Mothercare, House of Fraser and Carpetworld are just some of the big name brands to have announced major store closures. And the recent profit warning from Debenhams suggests we haven’t seen an end to the casualties just yet.
Many column inches have been dedicated to trying to understand why it’s happening and, if we were to sum it up in three words it would be economics, e-tailers and experiences.
Purse strings are tight – a weak pound and the uncertainty around Brexit isn’t giving the UK’s consumers a lot of confidence to spend right now. And of that limited spend, more and more is heading online.
Some 17% of purchases in the UK are now made online – that’s up 1% on last year – and the momentum towards online isn’t going to slow down any time soon. For all the nostalgia of the classic British high street, nor should we want it to – online retailers have led the way, disrupting the model and providing unrivaled convenience, choice, and experience to shoppers. That is only going to continue.
And finally, experiences. It’s been a red thread running through everything from the downfall of Toys R Us to the restructuring of House of Fraser that will see it’s flagship Oxford Street store close its doors.
Experiences are the one factor that retailers can control in all of this – they can’t change the economic conditions nor, try as they might, hold off Brexit or stop the growth of online retailers.
But they can revolutionise the in-store experience to draw shoppers in and encourage them to spend more time and money in the store.
What is Retail Experience?
The experience in retail goes beyond just transactions and taps into the emotions, sentiments, and beliefs of customers to create an environment in which people actually want to spend money.
There are the little things, like in-store amenities for example. In our most recent retail study, we found that in-store amenities like coffee shops, computer games or virtual dressing rooms were incredibly successful at driving the in-store experience.
Over 60% of shoppers said they spent more time in stores that had amenities like coffee shops, TVs, and video games and around half said they would also spend more money in store as a result.
Similarly, adding personal touches such as personalised recommendations when in the store is another way to add value and some 50% of shoppers said it was likely to make them visit a store again.
Then there’s the revolutionary, such as creating showrooms or virtual stores where the purpose is not to sell clothes, but to create an experience around trying clothes on only to order them to be delivered to your door.
43% of consumers said they’d be likely to shop in such stores and, perhaps more importantly, ‘big spenders’ were 5X more likely to want to visit these stores than other groups.
Understanding Consumers = Competitive Advantage
Creating compelling experiences is all about understanding your target customers better than anyone else. The most successful retailers – and there are many that have done well despite the tough trading conditions – are those that have used customer intelligence to create better shopping experiences.
Disney has got it right. Over the past 5 years, the layout of Disney Stores changed dramatically – gone are the piles of plush toys and instead, they’re now built around distinct character and franchise sections. They understood that their customers gravitate towards specific characters – if you’re a Moana fan (and who isn’t?!) you shop Moana, rather than the category (say soft toys, t-shirts or DVDs).
By re-organising their stores to gather all a character’s merchandise into specific sections, they’ve created an experience where Moana, Buzz Lightyear, and Lightning McQueen fans can immerse themselves in their chosen character’s section, spending more time and money in store than before.
John Lewis too has doubled down on experiences. Staff now have smartphones on them at all times, preloaded with a Partner App that allows them to effortlessly provide personalised recommendations to customers.
At its new store in Oxford, John Lewis unveiled its first ‘experience desk’ – a concierge service right in the heart of the store managed by the brand’s first ever store experience manager. It also introduced a whole host of new services an in-store amenities from nail and brow bars to technology centers where customers can get to grips with their latest tech purchase before they go home.
It’s a lesson for every retailer in these uncertain times and John Lewis’ managing director Paula Nickolds nailed it when she described the future of their physical stores as ‘a place where customers come and experience our brand – the physical manifestation of what we stand for.’
The revolution is underway. Those retailers that fail to capitalise on the experience economy will continue to fall by the wayside and be replaced on the high street by barber shops, cafes and nail bars. But the most successful brands will continue to grow by making sure the experiences they offer in-store are tailored to their target customers and designed to drive increased footfall and spend on the high street.