The High Street isn’t dead
25th June 2019 | Tim Mason
Lessons from Birmingham’s new Primark megastore.
Primark’s new Birmingham flagship proves that stores still have a vital role to play in shopping journeys. But one store opening – albeit a great one – doesn’t spell the beginning of the end of pressure on the High Street.
The discount fashion retailer’s megastore opening drew big crowds in April and demonstrates its view of the future of physical retail, which offers customers more of an experience, but still at fantastic prices.
It should be commended for this approach, as shoppers today are showing that discounters, like Primark and Aldi; convenience, such as the Co-op; and, contemporary shopping centres, like Westfield, are all winning. All of these physical retail spaces are thriving, either by positioning themselves as everything-you-could-want-under-one-roof destinations and/or unbeatable on price. Those that can’t lay the same claims are struggling.
The rise of ecommerce is, of course, adding to pressure on the High Street, where shopping online often enables the consumer to avoid any potential store crowds, queues and out-of-stocks altogether.
So, today, flagship stores are one, albeit massively expensive, option open to retailers with physical sales outlets that are looking to survive a period of unprecedented, technology-driven change. But not many retailers have the means to design and build grand stores of the future in the current climate. Yet most can also ill afford to do nothing in the face of stiff competition from both off- and online.
Digital black hole
Indeed, customers want stores that are connected to the digital world. This is especially the case when every online experience is relevant because it is informed by what the online retailer knows about its customers.
While Google can help find and navigate to the nearest store selling a product that a consumer has searched for, once inside that digital capability ends because it currently lags far behind the opportunity.
The average store is tantamount to a digital black hole, and nothing exists in a black hole. So, competing with online by being digitally connected and data-driven is what will separate the winners from the losers.
The High Street shop suffered at the hands of the car, hypermarkets and retail parks in the 1980s, but was reinvented by convenience stores in the 1990s. Now it needs to embrace digital with a “mobile makeover”.
Refitting for the digital age
Stores need to adopt digital and mobile to offer experiences that can rival online convenience and choice as well as relevance. Many also have an ecommerce sales channel they can expose in-store to “save the sale”.
In this way, retailers can refit their stores for the digital age in a far more cost-effective way that can also boost footfall and sales with data-driven capabilities that new fixtures and fittings investment could never achieve. To do this, they must empower customers to digitally connect in stores, via secure public Wi-Fi and mobile-accessible offers, services and content; exposing these capabilities via interactive digital touch points.
Discounters, like Primark and Aldi; convenience, such as the Co-op; and, contemporary shopping centres, like Westfield, are all winning.
Traditional marketing has always been limited by the amount of space available in-store. But stores that are digitally enabled and data-driven can highlight products and services that are not only relevant to the majority. Encouraging digital customer connection in the store makes it possible to devote share of voice to the likes of gluten-free food or specialist-sized clothing ranges and demonstrate relevance to individual customers.
If retailers can give customers, who are willing to engage and share some information about who they are and what they want, something of value and relevance, shoppers will be more likely to spend and return more often.
Another option is to eliminate queues by collecting online purchases in-store or use scan-and-go payments. Even bars and food outlets are implementing order ahead or pay-at-table systems to speed checkout. Retailers can then tie their view of customer activity in-store, in terms of traffic flow, dwell time and marketing engagement back to a sale and further, back to their cross-channel preferences and purchase history.
There have always been winners and losers in retail, and the winners today are digitally enabled and data-driven. They are able to use digitally generated data to inform insight that is used to better serve customers.
They can use this customer insight to inform pricing, ranging, merchandising and marketing decisions that will appeal to and add to the biggest group of their most lucrative and/or loyal customers in order to grow sales.
This is exactly why digital-first retailer ASOS has prioritised subscription-based delivery discounts over a loyalty scheme, or why Amazon wants to join up its Prime customer view online to physical stores with Amazon Go. It isn’t even possible to enter the Amazon Go store without first identifying yourself by scanning a mobile app. But barring those who are not already registered into your store is a luxury very few other retailers can afford.
Best of both worlds to thrive
The irony is that that these ecommerce players now need to learn the physical smarts that Primark and its physical store-based counterparts take for granted, while Primark et al need to harness their digital expertise.
Applying the best of online and offline worlds to improve the customer experience consistently across all sales channels is called “omnichannel”. It is also the best way to build winning stores in a digital world. So, retailers that can bring this ability to bear in physical stores alongside great prices, by digitally augmenting them to provide experiences that can rival those available online, are most likely to not just survive but thrive.