'Price and convenience' - How traditional retailers can fight back against online competition
Published 14 June 2018 | Julian Fisher
We are living through difficult times in the world of retail, with store openings down and closures on the rise.
The number of new high street stores opening in 2017 fell to 4,083, from 4,534 in 2016, according to research compiled by the Local Data Company (LDC) for PwC, which studied the top 500 town centres across Great Britain. Some 5,855 outlets closed on the nation’s high streets in 2017, at a rate of 16 stores a day, a slight increase on the 15 stores a day closing in 2016.
With the move to convenient and cheap online shopping one of the key factors behind this squeeze on traditional high street shops, it is more important than ever that ‘bricks and mortar’ stores evaluate how they interact with customers.
A Valued Destination
It is worth remembering that high street shopping still has significant advantages over its online variant. Local authorities are reluctant to see shops converted into homes.
After all, occupied stores typically pay more in rates than homeowners do in council tax. Moreover, consumers continue to appreciate the chance to physically go shopping; try out products; and walk away with the items they have purchased there and then.
After all, we are still essentially a nation of shoppers rather than Internet buyers – and there is every indication that this will continue.
That is not to say retailers should be happy with the status quo, though. High street stores must up their game if they want to ensure future success. Online shopping offers customers convenience; a wealth of information and personalised offers – and paying for a product is often quick and easy.
There is a lot traditional retailers can do to change, however. We are already seeing shopping centres introduce more of a lifestyle leisure focus to attract people as we can see by the proliferation of everything from coffee bars to gyms and cinemas across our town centres and retail parks. The pace of that change is likely to accelerate over time.
Price and Convenience
To compete effectively, high street retailers need to match, or get close to, their online competitors in their two areas of greatest strength – price and convenience. They need to make prices as good as, or at least close to equal, to those available on the Internet. And high street retailers can find that ‘sweet spot’. They have to pay rent but so too do online retailers with warehouses. They have to pay staff but online businesses also employ thousands in their distribution hubs.
The other area where they struggle is in understanding their customers’ requirements while they are in-store, and in providing them with the convenient shopping experience that encourages those customers to buy.
Consumers today typically visit stores with their mobile phones, which provide them with reams of product information the retailer is not privy to. In contrast, when a potential customer visits a company online they can track their every move, including whether they have looked at products or added items to a basket that are subsequently abandoned. Both the retailer and the customer benefit from the enhanced convenience this delivers.
Bricks and mortar stores don’t have access to this information and so they need to invest in other ways of understanding customer behaviour and providing a convenient shopping experience. Stores need to get up to speed with the latest in digital and mobile technology in order to deliver this.
Why Mobile Matters
Innovative mobile app-based technology coming on stream today gives customers the opportunity to obtain details of products in the store they are visiting, together with promotions relevant to them. Stores in turn can see, and better understand, the behaviour of their customers, provide them with relevant information about stock, and target them with offers and discounts.
So, in this way, mobile technology is already helping stores match the online experience in terms of convenience. This is just the beginning. Mobile solutions offer retailers the opportunity to deliver an even more far-reaching transformation of the traditional shopping experience.
Already, the most forward-looking are looking at radical ways to eliminate the need for traditional PoS stations. The latest available near-field communication (NFC) technology allows customers to view relevant product details by tapping their phone on a sticker located next to the product and then pay for the goods by tapping the same phone against a check-out pod before leaving the store.
It is an approach that has the potential to eliminate many of the barriers from shopping, helping reduce congestion and the need for equipment and floorspace. Shoppers benefit not just from the streamlined payment process but from access to more space in the store, giving them a sense of freedom.
Removing the paydesk also removes the barrier between shopper and shop staff, helping facilitate enhanced interaction and engagement. After all, in this mobile age, shop staff should be just that; mobile, roaming the shop floor, interacting with, and helping the customer, and taking the hassle out of payment.
Reports of the death of the high street have been exaggerated. The lure of shopping in town remains too strong for many consumers. But to drive long-term success and sustainability, adjustments are needed. By harnessing the latest in mobile technology, retailers can make those adjustments and fight back strongly against online competition.
Credit: Internet Retailing