The retail landscape is shifting fast, how can the high street keep up?
The UK high street has been hitting the headlines, for, what many would argue, all the wrong reasons. Retailers such as Toys ‘R’ Us and Maplin are but a few of the major UK retailers that have gone bust in the first quarter of 2018.
Are we witnessing the beginning of the end for bricks and mortar stores? Or, do we need to think a little more carefully on how retailers must instead change their approach to selling goods and engaging with customers in the digital age. The phrase ‘adapt or die’ has never seemed so prudent.
Retail giant, Amazon, proves that constant innovation and changing of the shopping experience is needed to keep customers happy. For example, the retailer recently did away with checkouts in its first bricks and mortar shop whilst also seeing its sales soar in 2017 by almost a third. This was thanks largely in part to the growth of its Amazon prime delivery service.
So, how can other retailers follow suit and assess if a physical store will result in business success and customer loyalty?
The physical store: what’s in it for me?
UK retailers need to ensure they understand why they need a physical store in the data-driven age. The digital era we are living through presents endless opportunities, so it is time to fully take advantage of them for business benefit.
However, grasping these opportunities should not come at the risk of forgetting about the emotional connection with customers, and the high importance of face-to-face interaction in the shopping experience. Get this balance right and you can offer a truly innovative in-store experience.
With the rise of social media, today’s consumers are better informed and more demanding than ever before. The expectation is for the fastest, most seamless shopping experience with more choice on the market. Retailers must meet this demand by being as best informed as possible and this means restructuring significant parts of their supply chain.
A failure to do this could soon mean that other retailers like Toys ‘R’ Us and Carpetright, all of which did not respond to a more fast-paced shopping landscape, follow the same path.
But it needn’t be doom and gloom for UK retailers, despite what the papers might say. Rather, the market is currently experiencing a state of transition and needs to re-adjust to meet ever-changing consumer demands. For other retailers, it’s now about looking and learning at the recent mistakes of major retail outlets and creating a strategy that will retain customer loyalty.
Breathing new life into the high street
Today, the retail experience is all about creating something truly bespoke and personalised to each individual customer. This needs to manifest itself either on a brand’s mobile app or physically in store.
It’s too simplistic an argument blaming giant online retailers such as Amazon for undercutting the prices of high street competitors. There was a 2.3 percent growth in new bricks and mortar store sales in 2017. Moreover, a high street on the decline would not be one where the likes of Amazon are opening up physical stores.
The future of an innovative shopping experience lies in getting the balance right between the physical store and e-commerce via apps and mobile devices. Getting this balance right is integral in providing retailers with a more insightful and profitable understanding of consumer behaviour and what triggers purchases, through the patterns that can be analysed from big data.
Understanding where your consumers go to make shopping decisions and how fast their minds can change based on prices, web or store design, can offer a much better understanding of what they want and don’t want. This knowledge can then be used to create the best in-store experience out there.
Emerging technologies like cloud-based artificial intelligence (AI) and the Internet of Things (IoT) means that retailers can make contextualised decisions, mapped to precisely what the shopper wants at any given moment in time.
AI applied to retail means more interactive and engaging customer service chatbots, coupled with the reactive and speedy automation of supply chain management.
In all of the press hype around the future of UK retail, we must remember that human interaction and the sensory experience of shopping for goods is still at the heart of what many consumers want.
By truly understanding what your customer wants, how they make their decisions and where they go to make their decisions, you can be sure to retain customer loyalty and enjoy continued sales success. Technology doesn’t mark the death of the high street, it marks its revival.
Anil Gandharve is global head of retail, CPG and manufacturing at Mindtree.
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