This article was first published by IMRG, the UK's Online Retail Association.
If you’re an active news-reader, or even just a headline-glancer, you probably haven’t escaped the rather morbid retail topic which has been doing the rounds for the last year or so: the ‘death of the high street’.
It’s been a bit of a catch-all snare; a conduit whereby fingers can be pointed accusingly at all manner of likely culprits in the slow-but-steady downturn in high street footfall. There’s never really been a question on whether the morphing nature of the high street is, in fact, a death at all: the notion has (at least in the mainstream) simply been accepted.
However, delve a little into the fact of the matter, and an entirely new story presents itself: one not concerning the death of the high street, but rather the evolution of the high street in response to the digital age. We approached our community of industry experts for their insight on the current and future state of the high street. Here’s what they had to say.
The high street is a curious and versatile beast. Its existence is by no means stringent, and it has the capacity to change and adapt to customer expectations as required. What those expectations are is up for debate (and something we’ll cover a little further down), but for now, let’s look at the entire high street as a whole.
People like the high street. Recent Doddle research has shown that, while ‘80% of the UK population concede that the online experience is quicker and more convenient’, ‘only 14% find the concept of physical shops outdated. Over a third (38%) still enjoy the social experience they offer and two-thirds (62%) value being inspired (Doddle / YouGov data, Jan 2019)’.
Tim Robinson, CEO of Doddle, continues: ‘Whenever I’m asked about the death of the high street I point to cinema. Its demise was predicted with the arrival of online streaming and yet it’s thriving. Because cinemas have understood that people are social animals with a desire to make an event of activities.
‘The high street is under a similar threat from digital advances but has a chance to carve out a long-term role for itself by undertaking a re-energising assessment of strengths to play to.
‘Nike and Ikea have been quick to recognise that playing to the unique strengths of both worlds is the clue to brand loyalty and longevity. Nike has made online shopping fulfilment part of its in-store theatre in its new Speed Shop whilst Ikea is developing a stronger e-fulfilment proposition alongside investing in a new experience rich on-site Learning Lab and free roof garden space at its new Greenwich store.
‘All proof that the clue to reversing the demise of the high street lies in a re-framing of the debate. It’s not about a battle between the virtual and physical worlds and the rise of one at the expense of the other. It’s ultimately about the needs and wants of the consumer and the exciting sector re-energisation that can happen when you prioritise those across both worlds.’
Ultimately, it’s the customer which drives retail. After all, with no shoppers, there are no buyers. And if this year’s shoppers are still invested in the high street, then the high street still has a valid stake in retail as a whole.
Nothing highlights the ways in which online and physical work in conjunction better than the fact that online giants are moving into the physical space.
It’s another credible argument for the high street: the way in which successful online retailers have identified brick-and-mortar as an advantageous route to expanding their businesses.
The likes of Amazon and Google, amongst others, have recently begun to dabble with the physical space, a move you’d imagine wouldn’t have taken place were a positive ROI not anticipated with the expansion.
Tobias Buxhoidt, Founder and CEO of parcelLab, explains further: ‘Many well-known bricks-and-mortar names have gone under recently due to a lack of innovation both in store and online. Yet, signs of the enduring value of traditional retail can be seen in the trend for purely online retailers to set up physical stores. The biggest of them all, Amazon, again opened pop-ups in major cities, including London, over Christmas 2018. It also invested in a traditional retailer when it snapped up Whole Foods in 2018. Plus, recent reports suggest it will be opening grocery stores in the US. Other retailers born online, like cosmetics mail order business Birchbox, have also begun opening physical stores.
‘So why is this happening? It enables customers to gain a deeper experience of their brand and this helps retailers differentiate themselves in a crowded market. But to achieve this, online retailers are leading the way in terms of making stores more of an experience than simply a place to browse and buy.
‘It’s this kind of ‘omni-channel’ experience – bringing online and innovative tech in store and offering click and collect online – that will be the future of retail.’
So, if the high street is indeed not dying but rather a core part of the future of retail (pending a few tweaks to its current proposition), how can it adapt?
Restaurants and shops have lived side-by-side for many years now. However, to drive footfall into stores, some experts have identified the shops themselves as becoming the new social rendezvous of choice. To be clear, this differentiates from the concept of a shopping centre comprising many retailers contained underneath one roof: this refers to restaurants in the outlets themselves.
Chris Long, Managing Consultant at Capgemini Invent, explains: ‘This year will mark the survival of the fittest amongst department stores, as high-street players are forced to quickly evolve in order to remain relevant. Intrinsic to this transformation will be the need for stores to determine a clear brand identity and service offering. Taking notes from either top-end retailers (e.g. Fortnum and Mason) winning through quality products, services, and experiences and bottom-end retailers (e.g. Primark), department stores stuck in the middle will need to pick a side in order to differentiate themselves.
‘Building on brand identity, department stores will also need to experiment with new products and services in 2019 in order to offer their customer base something different. This might be the year that we see department stores become a destination to get your haircut, go to the gym, meet friends for dinner, and shop for groceries all in the same place.’
In fact, this concept has already begun to be put into place with the new Primark store in Birmingham.
Chris Attewell, CEO, Search Laboratory: ‘By satisfying consumers’ demand for experiences, retailers can fight back against the declining high street.
‘Primark is an excellent example of how this can be done. The ‘world’s biggest Primark’ is set to open in Birmingham in April, and the store’s add-ons upgrade it from a fashion retailer to an entire day out. Consumers can buy an outfit, charge their phone, buy and eat lunch, get their hair cut, and have their makeup and nails done, all within the same four walls.’
It’s a farfetched concoction, perhaps: enticing shoppers in with the promise of a meal or a social evening and hoping that the increased number of eyes on the merchandise will result in an uptick in products being bought.
And yet, this year more than ever, shoppers are discussing the experiences they can have with the brands they buy from, with some even prizing the experience over the product itself. For the high street to survive, Attewell argues, retailers need to be refining their physical presences with an emphasis on the experience, be that through integrating a restaurant into the store or any other myriad ways.
Attewell: ‘Bringing in online elements to offline shopping is another way to improve the customer experience, without the need for thousands of square metres of space. High-tech solutions like virtual reality changing rooms and artificial intelligence personal shoppers can make shopping more novel, but also more convenient; however, lower tech and easier to implement solutions can work just as well to create a seamless experience for shoppers.
‘Being able to look at and buy store inventory and stock in real-time through an app and then collect in-store provides a quicker and easier shopping experience for customers who don’t want to spend time browsing; free standing tablets in-store that offer the same service provides customers who do want to browse with a more efficient way of doing so, as well as allowing them to easily order products online that are out of stock.’
Let’s not beat around the bush here: as Attewell pinpoints, it’s in the marriage of the digital to the physical that the high street can truly evolve for the modern day. And there are a few ways retailers can go about doing that.
Some would deem this as the ‘omnichannel’ store, but let’s not get snowed under in terminology: in today’s connected, instantly gratifying world, customers want the choice in how they buy. One of the most pertinent of these is for the product list online to be exactly matched to the products in-store, so that the shopper can do a little research before heading into the store to try on the product and make a final decision.
Indeed, Sander Roose, CEO of Omnia Retail, goes so far as to say there are a few products that customers will always go into stores to buy, and easing that process for the customer (that is, by allowing them to see the product online first), is recommended.
Roose: ‘Certain kinds of products will never move entirely online. Imagine that you're looking to buy a pair of running shoes. You'll probably research the product online and know exactly which shoes you want to buy...but you probably won't order them online. Instead you'll search the shoes, then go to the nearest physical store that carries the style you want to you can try them on before you buy them. This is called the ROPO (Research Online, Purchase Offline) effect.’
Another refinement for the high street is in allowing for the online research section of the customer journey to occur in the store itself. That way, if a customer notices an unforeseen item they’d like to buy in the store but would like to put in a little online browsing beforehand, they can do so without leaving the store.
Brian Green, Senior Director at Magento, An Adobe Company elaborates: ‘Ultimately, businesses need to make sure that their in-store experience is moving into the digital age – one way to enable this is to introduce digital platforms. In-store digital kiosks or handheld tablets with virtual product displays and digital experiences are fast becoming a key ingredient to business growth. This provides the retailer with the capacity to never lose a sale, as they can mimic the full online product catalogue within the store, and as a result, they will they see profitability increase.’
And, as a small aside from that, having a personable staff presence who are clued in on the brand’s product offering are a staple of physical stores that online has yet to ably replicate, and thus shouldn’t go overlooked.
Green continues: ‘In the long run, the in-store experience offers something which an online experience cannot – interaction with a personable sales-person and an opportunity to interact with the product – just so long as it is in stock. So, delivering excellent customer service is always the final detail that drives profitability up or down.’
With thanks to advances in technology, there are now ways to tailor this digital integration to the specific customer, provided retailers are willing to invest in the technology required for this kind of visibility.
The high street is a far hazier area for data capture than online. While websites allow retailers to track when certain customers log in, what they’re looking at, for how long, when they bounce out of the website, and a host of other things, these don’t translate to high street shopping.
However, with a digitally-integrated store come the perks of digital visibility, which would then allow customer service assistants to provide more relevant aid to browsing shoppers.
Katie Woodhead, Head of Experience Optimisation at Attraqt, states the case for digital integration: ‘In this digitally connected age, where consumers can make purchases across diverse channels, including shopping on in-store iPads and shopping on their desktops or mobile phones, capturing data on how customers are engaging with each shopping touchpoint is the key to a retailer’s adaption and survival.
‘By analysing customer browsing and shopping behaviour using technological innovations like artificial intelligence and machine learning, retailers can gain ground-breaking insights on how consumers are shopping across each individual reference point. This gives retailers immense power to tailor their shopping experiences so that they suit the specific needs and wishes of diverse customer segments, who are likely to be shopping in a multitude of different ways thanks to the options that digital technology has unleashed.’
One final area of the high street which can be optimised (and a concept which has already found a firm foothold) is enabling click and collect.
Click and collect is an initiative with numerous benefits: it drives footfall into stores, allows the customer the agency to choose when to collect their product, and (in substantial cases) can lessen the amount of delivery vans out to make home deliveries.
Click and collect has had a positive reception among customers, and as click and collect requires a physical store, the inductive leap can be made that customers are still keen for retailers to have a physical presence which can provide this freedom of item collection.
As Neil Ashworth, Chief Strategy Officer of Yodel and CEO of CollectPlus explains: ‘What we’re seeing is a retail revolution, which may lead to the emergence of fewer but better stores.
‘Customers today still want physical stores, but their relationship with bricks and mortar is changing. Click & Collect for example, which relies on the high street, is becoming an increasingly popular choice for busy consumers who want the convenience of online shopping but might not be at home to take a delivery. This helps to drive consumers onto the high street and into stores.’
In fact, with click and collect having established the purchase that it has, IMRG have devised a plan to evolve the practice, and have proposed the idea to the government, which was subsequently listed in their review of the high street.
Andy Mulcahy, Strategy and Insight Director, IMRG: ‘[Our proposal] was to look at converting empty stores into digital inventory hubs. In essence this would mean a network of brand-agnostic retail properties in every high street that enable any shopper to have any item from any retailer anywhere delivered to these locations.
‘It’s an evolution of click and collect, which is the only way that offline and online have worked together successfully at any kind of scale. It solves the problem of restricted choice on the high street (as everything conceivable is available online, stores simply cannot compete) as well as reducing the environmental impact of online shopping – through greater consolidation of orders into single locations and immediate returns if facilities such as changing rooms are built-into them.’
For retailers, there are a multitude of ways to upgrade their propositions for the ‘new’ high street, and, really, it’s up to the retailers to identify the best ways for them to integrate the changes which cohere with their current brand experience.
However, the survival of the high street is not solely on the doorstep of retailers: it also requires initiatives from local councils to facilitate footfall.
The make-up of the high street and its general use is a strategising conundrum which is in the hands of local authorities, and in order to cause a revival of shoppers onto the streets, these councils need to back the high street.
This is detailed by David Morris, Legal Director and Charles Davies, Trainee Solicitor, at Ashfords: ‘More than one response is needed to boost the high street and local authorities must show a willingness to act flexibly to accommodate the changes required to resurrect consumer interest. Permitting a more diverse collection of businesses on the high street, supporting independent retailers and offering fringe benefits such as free parking will serve to encourage shoppers in-store as part of a wider high street experience. Without support and a willingness to adapt from local planning authorities, high street retailers will struggle to accommodate consumers’ changing demands.’
Gavin Masters, Industry Principal at Maginus, agrees, stating the need for town centres to once again become social hubs. He says: ‘The death of the traditional high street model seems inevitable unless something is done to shift consumer retail preferences and improve footfall. This cannot be achieved by a single retailer in isolation but instead needs to be achieved through the combined work of the retail industry as a whole and local government. The high street shopping experience needs to be transformed in order to augment and complement what they get online. This is likely to come from the return of the town centre being a community hub and giving people a reason to make the trip and visit the high street.’
And on the subject of free parking, Stuart Patterson, UK/IRE Sales & Operations Director, FACT-Finder, notes how out-of-town retail parks can be just as lucrative as a town centre presence.
Patterson: ‘Out-of-town retail parks offer a more consumer friendly and value-for-money experience. For one, they mostly have free parking. Parking in a multi-storey has become a skill in itself at the best of times and the parking charges are generally very high. And you will be lucky to park near to the stores you wish to shop. For sure, retail parks offer a quicker in-and-out transaction and that’s what we want, right? That’s what online offers us mostly (or should do) - a quick simple interaction that’s both convenient and makes us feel good. Retail parks are far more accessible, choice, better laid out and are more in tune with the consumer of the 21st century.’
So, be it a revision of the town-centre high street, or doubling down on the out-of-town retail parks, local governments need to include retail into their strategy if the high street is to have its best chance of evolving.
The high street isn’t dying. Far from it.
Certainly, the high street as we know it is disappearing, but it’s being replaced with something more digitally integrated and customer-centric, once again giving shoppers the experiential day out which allowed the high street to thrive in its heyday.
It requires a strategic reworking from both retailers and local governments and will take something of a concerted effort on both sides. But the task is far from impassable and has all the hallmarks of regenerating the high street into a beating hub for the 21st century shopper. All that’s left to do is sit back and watch the revival.
For more information please contact David Morris on d.morris@ashfords.co.uk or Charles Davies on c.davies@ashfords.co.uk from the Commercial Team.
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