It’s been a tough year for the high street in the UK. According to a recent research from the Telegraph, it’s estimated that 1,267 shops have closed, or a tagged to close since January this year -- from Toy's R Us to Poundland to Maplin to Mothercare to House of Fraser and also the continuing woes around retailers such as Debenhams, Next and Marks & Spencer. On the other hand, ASOS, BooHoo and Amazon are seeing record sales.
The Future of Retail panel at The Drum Future of Marketing conference talked about this tough sector and also the growth opportunities in the future.
“Everywhere you look, we are affected by increased competition,” said Yo Sushi marketing director, Luisa Fernandez. “Add Brexit uncertainty on top of that and it's tough. Hopefully we're doing better than most and riding the wave. For a lot of restaurants out there, who are over exposing themselves, we are seeing a number of chains having to close many of their sites and unfortunately we'll see more over the next six months.”
The experience of the high street
Independent retailers are also not immune to this struggle and pain, said the founder and chief executive officer of loyalty marketing app, Pixie, Greg Barden. However, he added, there appears to be real desire from local communities for the experience of the high street to return. According to Barden, there is a huge appetite for artisan shops to thrive on the high street “with people really wanting that experience of bricks and mortar.”
He added that this is “the perfect storm formula”. Most councils, he bemoaned, don’t not having the foresight and then there are greedy landlords – all of which means that there is little thought given to the caring about the future of the communities.
Talking about the future of how the high street might look, David Kassler, group chief executive of Williams Lea Tag said that retailers are looking to give customers the omni-channel experience. “It doesn't matter where the transaction takes place - the physical store is now part of the overall journey rather than the final point of contact. You're getting more of the experience and the environment, online and offline,” he explains.
“Adaptable and engaging brands will understand how to integrate all points of contact to make it easy for shoppers to browse, learn, interact and buy” added Kassler. “The key is making the physical store a part of the process that facilitates this journey.”
The retail relevance
The high street means different things to different people, suggested Peter Shackleton, vice president of the travel-based loyalty platform, Upgrade Pack. Two decades ago it was the place where you bought everything, now it’s not. Product purchase can be anywhere, anytime. Shakleton responded: “There are experiential stores and retailers that understood their place in the customer journey, far more effectively, and they actually grow at a far greater rate. Part of that is going to be the human aspect of it. Which is physically relevant in the way we decide on what to make that purchase on.”
The big challenge for the retailers is marrying the online experience to the offline, however, according to the panellists. They agreed that it comes down to figuring out where the customers are finding the products and experience, and that in itself is a huge challenge. Kassler’s favourite example of this is Nike, who recently opened their ‘House of Innovation 000’ in New York.
The six-storey, 68,000 sq ft shop on the corner of Fifth Avenue and 52nd Street includes one floor dedicated to the local community, where – using online shopping data analysis – footwear and apparel products are stocked based on local shopping trends, and then quickly restocked as the taste of customers evolves.
“It's quite extraordinary how the use of the Nike+ app comes into the store,” said Kassler. “It's a fun journey within the store. It’s about experiences like booking personal training sessions, tutorials instore. For instance, there's a club on the 6th floor where you can only get to when you have the app.
“It's bringing the online world into the store and making it all part of the same experience.”
He gave another example – Made.com - it works online but there’s no way of trying anything on before it physically arrives at your house. “They identified that as being an issue and so set up a store, in Soho, Notting Hill etc but not on every high street because that's not the way forward. What they needed to do is have some further engagement with their customers to buy and have a brand affiliation.”
Yo Sushi have been approaching and trying new tech, while balancing and hitting quarterly targets. Fernandez explained: “We're looking at a number of different ways in which we can engage with customers. Whether it's digital menu projections, robots or brining back new tech that used to be great but disappeared.
“The problem we have at the moment is that it will work and be brilliant for 20% of the UK population and the rest will be put off. It's finding that balance.”
The sushi chain has been working through number of different things over the past year. Some will be great, and some won’t Fernandez expressed. “Brands need to move into the world which digital innovators have been in the last 10 years where you've got to iterate on the spot.”
Retailers are in a massively challenging position says Paul Lyonette, commercial director of the Kelkoo Group. “They're under constant pressure, month to month and quarter to quarter to deliver on numbers, and that would mean only more challenges to face going forward.”
The playing field has changed, and people need to learn to adapt, concluded Fernandez. “There will be brilliant brands that will come out of this [turmoil]. They will have worked hard to be cleverer than everybody else and learned how to navigate into the future.”
The Drum Future of Marketing took place on 22 November at The Crystal in London. To register you interest for 2019, click here.
Williams Lea Tag is a premium sponsor of this event.