How ecommerce can save the high street

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Tech and collaboration will help to evolve the high street experience for consumers.

Much of the news coming out of the high street is one of woe. We’ve seen Debenhams and LK Bennett recently call in the administrators, on the back of Maplin, Toys R Us and Poundworld in 2018.

The store closures that have ensued are highlighted in the latest research from PwC which reveals a record net 2,481 stores disappeared from the UK’s top 500 high streets in 2018 – 40% more than in 2017.

The often-blamed culprit for the situation the high street finds itself in is the ecommerce sector. Not only do they offer very competitive pricing, largely because they have significantly less overheads than bricks and mortar stores, but offer the convenience of delivery, often next or even the same day.

But those key differentiators alone don’t mean that we are set to see the death of the high street. After all, there are benefits of a well-positioned and thought through physical high street presence to deliver sales and a strong customer experience.

Even the world-leader in ecommerce, Amazon, recognises the importance of operating offline. They have Amazon Go that uses new technology which does away with an in-store checkout to speed up and improve the customer experience in their stores. It’s something offline retailers can learn from and highlights how the high street can evolve to improve their offering and standout. Sainsbury’s has made learnings and recently launched the UK’s first till-free grocery store.

Creating partnerships

Bricks and mortar stores and ecommerce businesses working closely together for mutual benefit will play a vital role in saving the high street. A key area could be with returns, with research highlighting that today more than 20 per cent of all purchases made online are returned, more than double the return rate experienced by high street stores. And with research by YouGov communicating that 74 per cent of consumers are likely to switch retailers due to poor returns management, it’s vital those in ecommerce make the returns process as easy and straightforward as possible to ensure their customers remain loyal.

By entering into a partnership with a bricks and mortar retailer an ecommerce business could offer customers the convenience of returns for unwanted items in a high street location. This arrangement would be a win-win for both parties, with increased footfall and sales for the physical retailer; and improving the customer experience, as well as potentially reducing the cost of returns for their ecommerce partner.

Both could also collaborate on the growth in popularity of click and collect which, according to GlobalData, is set to see a 45.8% growth in the UK over the next five years. Physical stores could place lockers from their ecommerce partners in-store, which enable online shoppers to pick up their orders in the high street. As with returns, this relationship will allow those in ecommerce to deliver greater convenience to their customers - for instance the option of being able to collect their purchases from a shop near their place of work in their lunch hour. Whereas the bricks and mortar retailer will benefit from increased footfall and therefore a potential increase in sales.

Asda is one retailer that recognises the benefits of working with those in ecommerce. Via its ‘to you’ service Asda allows consumers to return or collect purchases at its stores from far-sighted third-party online retailers with whom it has a partnership.

Collaboration between physical stores

Those with physical stores can learn from the approach of the larger ecommerce retailers and increase the range of products they sell, as consumers get used to the convenience of ordering a diverse range of products in one place. To achieve this high street retailers should look to partner with others in a different and / or complementary industry sectors to share stock and therefore offer more choice and value to customers. This increased range from across the partners could be sold via in-store EPOS points or directly to consumers online, with the opportunity for customers to pick up the goods in-store or have it delivered to their home address.

The high street needs to work with those in ecommerce to grow and prosper, and vice versa, as both off and online have their strengths in the fast-evolving retail world. It’s important both quickly realise the mutual benefits such a partnership could bring, something Asda and its partners in the ‘toyou’ service already profit from. Additionally, those in the high street should seriously consider partnerships with their neighbours to effectively compete with pureplay ecommerce businesses and drive sales.

Mark Fitzsimmons is managing director at Xigen

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