A recent report from PSFK has urged traditional brick and mortar retailers to revolutionise their stores or prepare to face dwindling sales.
The market intelligence agency, which carries out research on behalf of some of the world’s most lucrative retail corporations, reported that the UK’s growing preference for online shopping has left customers feeling that physical stores are increasingly irrelevant to their lives – with the experience of shopping the high street now considered more a burden than a treat.
As the acclaimed soothsayers of Silicon Valley predict the demise of physical retail altogether, those who are invested in the high-street will be forced to pull out all the stops if they are to continue to flourish.
“Retail guys are going to go out of business and e-commerce will become the place everyone buys. We’re still pre-death of retail and we’re already seeing a huge wave of growth,” said Marc Andreessen back in 2013.
Certain industries, such as fashion, will survive on the high-street for longer. That’s because, for those businesses, physical shopping remains an important part of the consumer experience, their enjoyment of the brand and a driver of sales. But even clothing retailers are going to have to provide innovative experiences in-store, in order to keep their physical presence relevant. As we have seen, businesses with a focus on bringing people together have begun to take over the high-street, with coffee shops and betting shops quietly becoming more prolific.
More entrenched brands and those who started out on the high street (as opposed to online) will have to do more than ever to remain relevant to “hyper-connected” consumers, explained the report titled “The Future Of Retail 2015“.
PSFK’s director of research and strategy expressed concerns that traditional retailers seem to be sticking with their existing ways of doing business and have neglected to keep track of changes in the three P’s- people, product and place.
The agency recommended that even the most well-established retailers should begin initiatives to rethink the way in which their online and offline businesses interact and overlap.
“The most successful retailers will integrate their online and offline businesses and understand how these two different channels drive sales in tandem,” said Piers Fawkes, founder and editor-in-chief of PSFK. “Some will turn their stores into showrooms, others into delivery spaces, some into lifestyle experiences. There’s no right answer.”
The idea of retailers turning their stores into lifestyle spaces is an interesting one, and is something Foyle’s bookshop has attempted with some success on central London’s Charing Cross Road. The flagship store now hosts book signings, literary events, live jazz and exhibitions. Meanwhile, Foyle’s competitors (such as Waterstones) continue to operate stores in the traditional manner. In doing so, they lose out to both Amazon’s seemingly-infinite product range and unbeatable prices – all while failing to provide an alternative reason for customers to visit the store.
The report insists that interaction with staff members in physical stores will be a key element in creating an offline experience that has something more to offer than the online store. It’s authors suggest that retailers ought to leverage their retail workers by arming them with new technology that would make them as helpful as the advanced web technology that powers their online stores. For example, giving your floor staff iPads allows them to check stock, capture data and provide technical or personalised recommendations using information that would otherwise not be available to them on the shop floor.
A separate study by A.T. Kearney found that 95% of online purchases are with retailers who also have a brick and mortar store, meaning the question around integrating online and offline will be important to the vast majority of those who are currently successful in e-commerce.
Examples of how to bring the online and offline experience together included interactive dressing rooms, deeper lifestyle experiences in store and communal interactions. A way of phrasing this could be “becoming marketplaces for relationships, not just products”. A time-worn example of this includes author signings at bookstores or live performances at record stores.
Retailers should also use technology to re-create e-commerce like features, such as personal product recommendations (successfully being implemented by Boots, via their Advantage Card booths), as well as one-click payment and extended delivery options.
“Imagine the expectations people have with their online shopping experience. They expect personalization, recommendations, recognition, recollection, access, service. People want that same seamless experience when they are in the real world, often through their personal device,” said Fawkes.
However, Fawkes also warned that using these new technologies was still a comparatively new approach and that there would be an element of trial and error in introducing them. He urged senior decision makers to give their teams permission to experiment, and permission to fail. “You can’t find out that people won’t use your electronic mirrors by watching how they use them in your competitor’s store”, he said.
But as Woolworths, HMV and many others have found, being scared to experiment with your business model and embrace new technology can spell disaster. Inaction is far riskier than a few failed experiments, especially when new competitors are approaching business with this ideology as their default.
“If retailers continue to fail to connect with the modern consumer, the shopper will simply give up waiting for the revolution and buy everything and anything through the personalised, synchronised, multi-device, communal retail experience that many online retailers already offer.”