The media has long been sounding the death knell for the high street. Sales at bricks and mortar retailers are on a seemingly endless downward trajectory. It is now accepted that the Christmas till receipts – once the measure of a retailer’s overall health – will be worse than last year’s. The highlight of the festive shopping season is no longer witnessing a celebrity turning on the Christmas lights. Instead, it’s the countdown to ‘Mega Monday’; the busiest online shopping day of the year.
Of course, a recessionary climate has been a significant influence. The online retailer’s USP – cheaper, more convenient, more choice in less time – has proven even more compelling in straitened times. Pressure on time and disposable income will naturally drive consumers to the best deal. Equally, boarded up retail premises and deserted shopping centres don’t have the same ‘pull’ as a warm laptop. So why haven’t all retailers simply shut up shop, given their premises over to housing and retreated to the virtual world of paypal and next day couriers?
According to the British Retail Consortium, 83% of retail sales were on the high street in Christmas 2011. While the consumer may have a sharp eye for a deal, there is still the need to touch, taste and try before you buy. But while that figure is encouraging among all the doom-laden media hyperbole, it is not a given for Christmas 2012 and beyond.
The Centre for Retail Research anticipates a modest volume increase in sales of 0.9% in real terms in 2012, most of which it expects to be generated around the Christmas period. But most of which it also believes will be driven by online sales. The end may be in sight for the double dip recession but it is expected to deliver only small relief to the pressure on household income over the next 12 months. Analysts predict spending in bricks and mortar retail to continue to decline.
To swim where others sink, high street retailers are going to have to adapt to the new shopping animal. For too long they’ve kept their faith in the ‘Field of Dreams’ approach: If you build it, they will come. The last few years have proven that this is all too often not the case.
Today’s shopper wants high street retailers to combine the practicality and economy of online with the theatre and
entertainment value of an outing. Where ‘going shopping’ on a Saturday was once an event in itself, today it is not enough. Only retailers who fully understand what it means to be truly multichannel will reverse the decline.
What does truly multichannel mean? Perhaps the term itself needs redefined. Multichannel simply means lots of different channels: bricks and mortar, catalogue, web, email, mobile. Multichannel in the case of retail should never be mentioned without the word ‘integration’. It is the integration, not the variety of channels that drives success.
What m-commerce delivers is the ability to marry the on and offline worlds in a way that delivers added value to the consumer. While in-store retail delivers the experience and e-commerce provides the value proposition, m-commerce adds a layer of information from in-store comparison to canvassing opinion via social media. Through the use of product apps, augmented reality and location-based services, m-commerce adds value to both the on and offline retail experience.
Retailers such as Diesel who use m-commerce apps to help shoppers interact in-store with absent friends (that quite literally should have been called the ‘does my bum look big in this’ app) to the use of tablets where shoppers can try on a style in one colourway and then order from the wider range online to be delivered to home or in-store.
Supermarkets are delivering not just multichannel integration, but cross-sector multichannel integration. Waitrose’s ‘Click and Collect’ service works in tandem with its brand stablemate, John Lewis.
Customers can shop both online at John Lewis or in-store, or both simultaneously. Items are then shipped from warehouse or storeroom to the customer’s most convenient Waitrose supermarket for next day collection. This delivers the value of the online price promise as well as the shopping convenience; removes the pain point from online of waiting in all day for a delivery and introduces cross and upsell possibilities across both Waitrose and John Lewis brands as consumers make the most of their trips to both stores, real or virtual.
For high street retailers to navigate Christmas 2012 and beyond, the need to integrate the strengths of each element of multichannel has never been more pressing. Bricks and mortar must deliver the pull, the theatre, the event that drives consumers in-store while leveraging their e-commerce benefits, enhanced by the potential for added customer engagement through mobile media. This Christmas will not kill the high street, but retailers must think creatively if they’re going to cure it.
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