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As the High Street Re-opens its Time for Retailers to Align the Store with the New Era of E-commerce



Sophie Daranyi, CEO at Omnicom Commerce Group shares thoughts on the challenges ahead of the high street as Covid-19 restrictions begin to lift

As the High Street Re-opens its Time for Retailers to Align the Store with the New Era of E-commerce

We know that Covid has exponentially fuelled the rise of e-commerce sales and February this year saw the highest percentage of online sales ever recorded in the UK at 36.1% (ONS). But in the week when non-essential retail re-opens we need to ask how the physical store can benefit from the rise of digital.

The headlines are full of the ‘end of the high-street’ and of course there has been the tragic demise of many loved high street brands, but many of the casualties were businesses already struggling to re-invent and re-imagine their offer in the rapidly changing retail landscape often with poor product offer, over leveraged debt or lack of digital transformation. The reality is that most of us want to shop both online and in store which I believe means that there is room for physical and digital commerce to thrive.  

Recent research shows that four in five UK consumers see the physical store as vital to the shopping experience and 70% say they enjoy the full experience of going into stores to browse, see what’s new and buy what they like. (Vista Retail, Nov 20)

There is a reason that many digitally native brands like Amazon, Tezla, Peloton and Casper end up opening physical stores. Essentially convenience and ease don’t always top-trump experience and interaction. The joy of browsing, the opportunity to feel and test products, customer service and advice in addition to the lack of physical shipping cost mean that consumers enjoy the experience, and of course we can’t ignore that fact that both in-store and omnichannel shoppers fundamentally spend more.   

In the US, Target’s focussed ‘store centred strategy’, coupled with digital investment and click+ collect services has been driving impressive dividends. The grocery brand’s data suggests that a multi-channel customer spends four times as much as a store only customer and 10 times more as a digital purist. 

And here lies an opportunity for retailers - to bring blend the ease and navigation of e-commerce into its physical stores. The Amazon Store in New York’s Soho is a prime example – it brings the principles of search to its merchandising, reviews and recommendations next to its products and up-to-date ‘most bought signage’ to its displays. Simple and effective consumer navigation to drive incremental conversion.  At their recently opened UK Fresh Stores, Amazon’s ‘walk-out technology’ brings seamless ease and user experience of their online environment to life coupled with the rich inspirational environment to buy fresh produce.

John Lewis was quick to the opportunity of omnichannel retail. It may have had to recently make the difficult decision to shut some of its regional shops but the reduced store portfolio together with increased e-commerce will continue, both clearly focussed on quality, value and service. Its recently published 5-year plan commits to continued focus on its core differentiator ‘first class service’ online, on the phone and in-store. We all know that people do not buy exclusively online or offline so this ‘omnichannel’ approach glued together by the John Lewis’ differentiating offer will be key to its success.

But the high street still needs to work hard to encourage its customers into its store in the first place. Driving footfall and increasing in-store dwell time will be increasingly driven by introducing new reasons to visit, added value and rich immersive experience. In the US, the leading department store, Kohl’s, embraced the enemy by introducing Amazon return stations in its stores – it saw two million new customers as a result. London’s Nike Town flagship store has long been a pioneer of best-in-class consumer experience to make it a destination – from an in-house DJ, a basketball court, personalisation and running assessments - it brings its products, expertise and ethos to life which its customers heartily buy into. The queues outside Nike Town last summer, post lockdown speak for themselves. Shoppers are hungry for content and entertainment and the physical store gives retailers a unique and engaging platform to meet that need. Advanced technology, interactive merchandising and innovative experiential platforms will only accelerate the potential of the future of instore entertainment and engagement.

It’s not all down to the retailers to drive footfall however – city councils can play a crucial role in driving footfall and creating experiences. County Durham introduced Lumiere shows in 2015 and despite extreme weather in the latest festival in 2019 they calculated an economic impact of £11.5m plus 165,000 visitors. No wonder a new festival is planned for November this year.

The Bank of England recently estimated that UK households have built up in excess of £100bn during Covid-19 lockdowns. Those full wallets, coupled with the opportunity to get back out to our high streets and enjoy physically shopping again must be good news for both retailers and shoppers. But to keep our high streets alive and healthy, retailers need to embrace the seamless physical and digital integration as well provide their customers with service to differentiate and an experience worth going back to. 

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RAPP, Fri, 09 Apr 2021 13:02:18 GMT