Can anyone or anything be the saviour of the High Street?
Let’s begin by qualifying this question and whilst we are at it, dispel a few myths and untruths.
The High Street is operating at approximately four times the size of online. However, with significant improvements in technology, speed and availability we are increasingly making informed decisions, better choices for ‘us’, almost anywhere.
This has led to a marked change in the number of purchases we would have ordinarily conducted in person in-store. This shift has had a highly destructive effect – for high street retail – during the most important buying periods. Namely before Christmas and after the New Year when some stores depend on achieving (up to) 40% of their annual takings.
There is no industry which could have been expected to survive unscathed from an onslaught that drains your most profitable season from sales without consequence. And this caught many retailers off-guard, especially those who felt protected by having ticked the ‘multi’ then ‘omni’ channel boxes.
What is the cause?
Technology it seems is the cause… but actually it’s only the enabler. Communication has changed our shopping behaviour through the delivery of knowledge. I ‘know’ I can buy this product elsewhere, cheaper, home delivered, bundled, no matter what or how the fact is ‘I know’ because another retailer communicated it - simple. Or is it?
Over the last few years we have seen a few TV shows and a celebrity or two take pot shots at ‘helping’ retailers. Whilst for many viewers (read: shoppers) this presented a peek into the world of retail, once a mainstay of work for hundreds of thousands of people, the slow decline in the noughties has become a fast-moving tide which is redefining our very streets!
With decades of retail experience the show’s host garnered the support of towns, councils and government. Sadly, the one over-riding fact of business, the need to sell products which means finding the price shoppers are willing to pay, using whatever methods possible to attract consumers, was missing or at the very least overlooked.
Is customer service the key to success?
Surviving or becoming a huge success, whatever products are sold to whichever part or end of a market, is a numbers game - ask any accountant. But that’s becoming less true as we see shopping centres and stores like John Lewis and Debenhams turn their attention to giving us an experience to enjoy when shopping.
Sure many of us will love the idea of being entertained but we don’t typically stop and listen to street buskers or choose to include a visit to the cinema when out to shop. A clean, dry and pleasant centre, street or store goes a long way but ask anyone a few weeks later about a shopping trip and it wont be about the offers or the décor! It will be about their engagement with staff, selection of products and whether they were able to come away ‘satisfied’ with purchases - which in turn causes the release of those wonderful endorphins. This is what we remember because we want to return to having those experiences.
So, to answer the first half of the question, ‘can anyone… be the saviour of the High Street?’ the answer is yes, the staff. Assistants and Managers who need to be empowered so they can better ‘communicate’ with what the modern shopper has already found online. And for all their success, starting with merely surviving, we need to celebrate their achievements.
But why bother? According to some recent references ‘…the High Street is dead’. I have no idea where that came from because its blatantly not true.
The future of retail.
As markets evolve so too will the players. They must. The growth of online brought us convenience after which the inevitable increase in retail websites brought the price of goods down and down and down - supply and demand, lesson 1. Naturally with improvements in mobile communication and tech finding more opportunities, such as winning ‘the box’, clinching a sale at the last second it’s been easier to find someone, somewhere who will buy a product if the price is right. Whether this is right for the seller depends on if the price secures a profit or gets rid of a product that’s costing money to store. If it’s the latter another retailer may have lost the prospect of a profitable sale!
And this is happening many thousands of times each day as online uses ‘loss leaders’ to secure their positions in search results.
The result, however it came about, ends up with a sizeable proportion of our buying decisions now directed online. With greater fixed costs, not least in rents for a bricks and mortar business that hasn’t been able to act quickly, the high street has suffered most losses - simple. Or is it?
The economy of high street retail is incredibly complicated, but one truth remains and once again; it relates to supply and demand. There are too many stores chasing fewer sales at prices consumers are willing to pay where they could have been achieved cheaper online. In other words, people are less likely to buy a product when they know it’s cheaper elsewhere. As such, stores need to make an adjustment in both the physical number of stores and/or bring their prices in line with the competition.
The first and perhaps most important adjustment MUST come in how retailers see ‘channels’. The approach through multi-channel and omni-channel are no longer relevant. A consumer will see any channel a store uses as the face of that retailer and will therefore expect the same experience and information. Translated this means having the exact same offers and promotions (albeit it will serve the retailer to allow stores and staff to address and serve the local market in ways that would be different from county to county).
Ultimately however the adjustment must come in the form of ‘price’. We buy to serve our lifestyles but our choices (where we buy, and of course what we buy), are significantly influenced by price. No matter how good the experience, the selection, how wonderful the staff, if a shopper sees it cheaper and cannot bargain (aka with empowered staff) it’s likely the shop has merely served to assist another retailer to win the sale.
But, is it possible for an industry so big and made up of so many players to adjust its trading style? For an answer we can turn to the airline industry who around the same time as Amazon and eBay birth were about to face two upstarts…. one who was new, Easyjet and another Ryanair who was driven by a ruthless and determined CEO – not to be unkind to Stelios, he was equally as determined.
Based on the blueprint of an American airline the prospect of selling seats at variable supply and demand (there it is again) prices, starting low and increasing brought prices down and took passengers away from the national flag carriers, such as BA. With prices that were significantly less, in some case 200% or more it was understandable for observers to think that these upstarts wouldn’t survive.
As we all know, it was the national carriers who had to adjust their prices but in most cases only to achieve a ‘near-match’… which was enough. A different product (not least the destination where flights land) and the overall experience would be reflected in a slightly higher price. But the adjust was achieved and besides computer glitches(!) the airlines have all found a profitable and sustainable market.
To survive retailers must adapt to offer shoppers a unified experience, delivering information as they might expect online but in-store, how they want it, when they want it and with prices to satisfy their needs, basically to win the sale.
This is jisp - the saviour of the High Street - solving a complex set of issues for retailers simply and freely!
Julian Fisher CEO, jisp