- New statistics reveal a record 2,870 UK stores shut down in the first six months of 2019
- Online spending in retail has increased to one in every five pounds
- Majority of customers still prefer purchasing items in-store
- Retailers need to invest in ‘brand interaction hubs’ to stay competitive.
When so called mom-and-pop stores that once dominated the retail market took a serious battering during the second half of the 20th century, retail giants and department stores were given the brunt of the blame. But at a time where Amazon Prime Day is a much-anticipated event on the global economic calendar, the all-consuming dark void that is the internet now seems intent on creating a virtual ghost town out of high streets near and far.
New research by PwC and the Local Data Company has revealed 2,870 UK stores shut down in the first six months of 2019, equating to a devastating 16 shops every day.
While an additional 1,634 stores opened during the same time period – a 4% increase from last year – the overall net figures landed on 1,234 store closures on Britain’s top 500 high streets from January to June, a significant rise from 1,123 in 2018.
Fashion retailers were the hardest hit, with Arcadia (owners of Topshop), Debenhams, New Look, Karen Millen and Coast announcing widespread closures – restaurants, estate agents and pub chains also experienced significant closures.
While a number of factors are contributing to the decline in high street footfall, online buying behaviours have undoubtedly left the biggest dent. But as retailers continue to restructure their business models to appeal to online appetites, a new approach is also required when it comes to driving more customers in-store.
Is brick-and-mortar retail all doom and gloom?
Despite today’s increasingly complex business landscape, in many ways, the rules of retail are still relatively straight-forward: to make a profit, you have to sell things for more than you paid for them.
But with the e-commerce industry continuing to cut into high street retailers’ pockets, big brands are now fighting battles on multiple fronts.
One in every five pounds spent with UK retailers is online, according to the Office for National Statistics (in 2013, one pound was worth every ten spent online).
To add fuel to the fire, the minimum wage is rising, business rates are increasing, and new data protection laws are impacting marketing reach – and now, with fewer sales taking place on the shop floor, profit margins will no doubt be tight in months to come.
So, should high street retailers pack up shop now – or shift their attention to fighting in an online environment that’s dominated by the likes of Amazon, Asos and Boohoo?
Consumer behaviours have no doubt changed, and online shopping has played a crucial role in that shift, but people still enjoy shopping in-store. A survey by Marketingsignals.com found that 85% of consumers prefer physically purchasing products in-store, despite the convenience of shopping online. What has changed, however, is the expectations consumers now have when visiting a store.
Mediocrity is no longer good enough
A worrying number of empty shops now line the high street. In July, the percentage of empty stores climbed to 10.3%, the highest it’s been since January 2015.
But this in no way indicates that the high street has become obsolete; consumers are already spending an increasing amount of their disposable income on in-store experiences and lifestyle-related products.
To remain relevant, retailers need to make their stores relevant to today’s consumers – and that means establishing a compelling reason for them to visit your stores.
Retailers need to ensure their in-store customer experience is first class by investing in ‘brand interaction hubs’ – where consumers can interact with your brand, your products and your staff in a meaningful way. It needs to be visually engaging, inspirational and focused on the needs and interests of the customer – whatever they might be.
But the customer experience also needs to be seamless, with the necessary queuing systems, appointment scheduling software and event management software in place to make the in-store experience time-efficient and stress free. And to create a compelling reason for customers to come back, retailers also need to ensure in-store operations and staff resources are streamlined with task management software, and business intelligence that continuously captures data to create an even better in-store experience.
While the retail market has a number of challenges on its hands, what has become clear is that brands that choose to embrace digital innovation in-store and refine their omni-channel offering will have a much better chance of surviving the retail rat race in years to come.
For more information on how Qudini can help retailers to engage modern consumers and build long-lasting relationships, click here.