Modern Retail

Future-proofing Retailers

Future

2019 was not a good year for every high street brand. Debenhams, Mothercare, L.K and Bennett are just some of the big names to have either disappeared or been rescued during the year. While issues like mismanagement, challenging retail environments and high business rates have all played their part, there is also no denying that shopping habits have evolved and many retailers have not kept up. Retailers then cannot afford to stand still and instead need to ensure they are still delivering the experience that customers demand for a successful future. 

One of the biggest areas of change for retail has been in the usage of bricks and mortar stores. Traditionally, the measure of success for most stores was in the takings they delivered from in-person transactions. Consequently, price became the primary way retailers looked to attract customers. This has led to growth in big sale events such as Black Friday, Cyber Monday and the like. However, while these events may have delivered short term gains it also fired the starting pistol on the race to the bottom. With some retailers focusing on offering products for as cheaply as possible, the long term health of many businesses was put at risk. In fact, when surveyed, nine out of 10 heads of commerce at major retailers agreed that sale events have devalued products in the minds of consumers. The knock-on effect of this practice is that consumers become less likely to shop during non-discounted periods, while the value they place on a brand drops too.

To break this cycle, brands and retailers need to look at how they improve the customer experience. With brand value and customer experience so intrinsically linked, improving the customer experience will equally raise the value of a brand in consumers eyes too. As recent research commissioned by Valitor found nearly two-thirds (60%) of heads of ecommerce see the traditional high street as ‘dying’. However, they equally see that if retailers are to survive over the next 10 years then they will need to focus on the customer experience. With customers shifting habits to buying products online, retailers need to ensure their customer experience matches these habits. 

The omni-channel approach

The best way then to meet customer expectations is with an omni-channel approach. The advantage that omni-channel offers brands and retailers is that it allows the data from both instore and online channels to be combined together. This creates one complete view of a customer that can then be used to hone the experience for them. For instance, using transactional data, brands can understand which products customers purchase, how often they purchase them and which channels they use too. These insights are then used to create the personalised experience that consumers are asking for. As revealed in a recent report that looked at privacy within the retail sector, three-quarters of consumers are happy to share their data, while 58% want a long term relationship with a brand. It is clear then that consumers want a deeper relationship with brands and retailers and are happy to share their data to achieve it.

However, while many brands and retailers may feel they already offer an omni-channel approach, the reality is often quite different. For instance, some have done well in promoting and encouraging shoppers to use both online and instore retail, they have failed to connect the two together and put the customer at the centre of the experience. The result is that retailers are stuck being multi-channel and lacking the full picture of their customers that an omni-channel approach offers. To survive and future proof themselves, retailers need to have one consistent view of the customer and not two or three glued together. 

Rethinking the physical store

To prevent this, brands need to re-evaluate the relationship between physical stores and online environments. In fact, when surveyed, heads of commerce overwhelmingly reported back that they expect stores to support online retail, with a third seeing stores as becoming showrooms and a further 31% expecting stores to become online distribution hub. By combining these two use cases into their omni-channel approach, retailers can make stores themselves into destinations. This both puts customers at the centre of the retail experience and helps strengthen the relationship between brands and consumers too.  

One example of this approach is Joules. By focusing on its customer experience, it has thrived at a time when its competitors are struggling. Simple measures such as offering a click and collect service have added additional value to its physical stores. At the same time, the data it collects on consumer shopping habits can be developed into highly targeted marketing campaigns. By combining its physical stores with a strong online offering, it has improved the customer experience and built a strong relationship with its customers. 

Looking back now, we can see that 2019 was a tough year for many in the retail sector. However, that does not mean that the future needs to be the same. By adopting a fully omni-channel approach and putting the customer at the heart of it, retailers can build the long term relationships that consumers want. To do this though, brands and retailers need to ensure they have one, clear view of their customers.

Credit: Angus Burrell, General Manager UK, Omni-Channel Payment Solutions, Valitor