By Ben Stagg, Head of Client Management at Barclaycard
Fri Nov 9 2018
With the likes of Debenhams and House of Fraser facing difficulties, and more established players such as M&S and John Lewis struggling for sales1 and even issuing profit warnings, the British high street isn’t exactly buoyant at the moment.
However, some retailers are responding intelligently to this downbeat environment by providing customers with more of a compelling reason to spend big at their stores rather than shopping online.
In this article I'll look at some of the ways retailers are evolving the in-store customer experience.
You can find a lot of inspiration from the grocery sector, with the discounters Aldi and Lidl continuing to operate from a strong position. The key to their success has been offering an efficient, streamlined offer, where time-strapped customers are able to easily find core everyday items at a reasonable price and are not forced to spend hours aimlessly wandering the aisles of a hypermarket.
Moving to smaller stores with limited stock gets rid of clutter and provides customers with more of what they want. Therefore, it’s no surprise to see M&S stripping out various sub brands and products. M&S CEO Steve Rowe made shrinking the number of clothing lines a central tenet of his strategy and decreased store space devoted to clothing by 10%. The retailer seems to have woken up to the reality that customers simply don’t have the appetite to walk through aisle upon aisle of outfits, with online retail making fashion purchases a lot easier to carry out.
Tesco CEO Dave Lewis has also discontinued thousands of unpopular food lines, with analysts believing the supermarket’s new approach, which only prioritises popular products, is a driving force behind its turnaround and return to sales growth.
Providing customers with a compelling reason to return can also be boosted by offering one-off experiences.
John Lewis is now looking to add special film screenings to some of its stores in the hope this will keep customers inside for longer periods of time and more likely to make other purchases. Meanwhile, Harrods recently had chef Tom Kerridge host a residency in its food department which created excitement among shoppers and more of a reason to splash out.
Pop-ups can also be desirable. The car industry in particular has done a great job of utilising one-off locations to create sales opportunities, with Jaguar using its sponsorship of Wimbledon to offer a limited virtual reality experience at Waterloo Station, where commuters could use an Oculus Rift headset to step into the shoes of Andy Murray. It told Marketing Week this was “incredibly successful” in driving purchases of its cars.
The fashion sector also has its fair share of success stories of beating the current slump in British retail, with this largely driven by innovative in-store technology.
Clothing brands such as Ted Baker and Zara have each seen rising sales largely due to their seamless multichannel approach, which offers customers greater levels of personalisation and utilises smartphone apps such as augmented reality (AR) and chat assistants to improve the in-store customer experience.
This means you can find out additional information on products right in front of you by looking at your phone or even see advertising campaigns come to life in front of your very eyes via AR. And even though M&S may be struggling to shift general merchandise, it’s still innovating, with apps that offer you a virtual fashion assistant, who can help you pick out the right clothes.
Arguably, tech is at its best when it simplifies or enriches the in-store experience. Travel agent Thomas Cook has stepped into the 21st century by offering virtual reality previews of holidays to customers inside some of its branches and making what is traditionally a pretty dull retail location feel much more alive. Thomas Cook says one in 10 customers who try the headset at its Bluewater store then go on to book a holiday with the travel agent immediately after.
Meanwhile, Barclaycard is simplifying the in-store experience by trialling our new Grab+Go technology. It enables retailers to offer a shopping experience where consumers simply scan their products while on the move and pay via an app; this means they can leave the store without queuing for a till.
Big four supermarket Sainsbury’s has done something similar with its scan and go app, which also means you never have to queue for a checkout till and can just leave once you’ve selected your items by paying digitally.
The reality is high street retailers can no longer rely on traditional sales. Thanks to the rise of eCommerce retailers like Amazon and ASOS, returning an item has never been easier. New research from Barclaycard shows that a quarter of retailers (26%) have seen a rise in returns in-store and online over the last two years, with the number of returned items up by 22% on average.
This has understandably had an impact on profitability. Therefore, making sure your store has alternative sources of generating revenues is imperative. Debenhams hopes it has got this sorted with a new trial of in-store gyms in select retail locations. The thinking is that this will add a new year-round revenue stream that isn’t completely reliant on shifting products.
Whatever your approach, there’s no shortage of brands innovatively fighting against the current slump on the British high street. By joining them, you could just end up safeguarding your business for the future and defying industry expectations.