Retail Crisis or Evolution: How to Thrive

Retail evolution

Modern Retail are proud to share the ‘Retail Crisis or Retail Evolution’ series, by Naeem Arif, Vice Chair of the Midlands Retail Forum. Naeem shares the ways in which successful high street retailers are adapting to overcome new challenges and thrive, proving the importance of evolution in retail.

To read from the start of the series, click here.

What Are the Big Dangers on the Horizon?

What are the big things on the horizon that could threaten the high street if retailers fail to adapt?

  • AI and Augmented Reality will move the majority of retail online
  • Companies will replace staff with robots (consider McDonalds’ ordering kiosks)
  • Staff will be replaced by click & collect services
  • Access over ownership, ‘we don’t need to buy, we can just share’
  • A few online suppliers (like Amazon) will simply supply everything

In the UK, Brexit continues to be a major source of uncertainty and an easy scapegoat for businesses to blame. What we have seen in this report is the evolution of businesses, evolving and winning market share, working to successfully grow their business regardless.

What Are the Lessons Learned?

So, what are some of the lessons to be learned?

  • Don’t fear technology; embrace it
  • Treat customers like guests, think about what they want and need and they will give you their attention
  • Don’t forget about retaining and gaining repeat customers, you don’t always have to focus on chasing new customers
  • We constantly tell our clients ‘If you are able to not only make your customers happy, but get them raving about you, they can become your best marketing engines.’ Review it, measure it and benchmark against the rest of the marketplace
  • Focusing on cost and price is something that is important, but you have to combine it with giving that great customer experience which leads to customer loyalty

Following the era of “value for money” and “brand identity”, customers now demand personalisation and experiences. Whilst SEO and big data are important, they won’t replace a friendly welcome and personal attention. Excellent customer service is how the high street will dominate the marketplace; customers will remember your service much longer than your price.

A term that is becoming increasingly common is CVA – Company Voluntary Arrangement. A CVA is a legal route which a business can use if they face bankruptcy. This is an approach that Mothercare, Carpetright and most recently House of Fraser have declared they are looking at. A CVA requires Creditor approval, i.e. the Creditors believe this is the best way to recover some of the amounts owed, rather than risk losing everything. 

The problem I see with a CVA is that there is a chance that in saving your own business, you are going to have a knock-on effect on someone else’s business. There needs to be some negotiation between failing businesses and their creditors, landlords and the local authorities on what can be done. The October Budget has announced some relief with a business rate for SME’s, focussed on helping smaller business owners. 

What Else Can Be Done?

In some situations, we see premises boarded up for many months as the legal formalities are concluded, before the former tenant can be replaced with a new tenant. The site of a closed store is a negative reminder for people visiting the high street. But while a closed shop spells failure for one company, it often signifies the lack of adaptation to fit customers’ adapting preferences.

Business Improvement Districts (BIDs) are being set up. Alongside Chambers of Commerce, these should get more involved at a grassroots levels to work with business owners who are often much more excited than qualified to run their own businesses. They need more support.

There is also a case to regulate the ‘Business Consultant’ and ‘Mindset Coach’ industry who are often accused of selling dreams without substance – but this is a whole deeper discussion. 

What we really need to do is develop and promote ‘failing’ high streets to lessons learned from successful high streets. The high street is not dead… it is evolving and we have to study and learn the conditions in which it will thrive.

In Summary

Having considered all the information available to us through our own research and that of other organisations the single advice that I would offer is as follows;

“The reality is, that this is not a crisis. This is a natural evolution of the high street and businesses need to adjust their thinking accordingly to survive. It is essential to be able to read the market and adapt your strategy on a more frequent basis than you may be used to.”

Naeem Arif – Vice Chair, Midlands Retail Forum

To read from the start of the series, click here.