In light of the challenges facing retailers now many of their customers are in lockdown, and high streets are closed, Paul Kirkland, Retail and Hospitality Business Development Director, Fujitsu, looks at why an omnichannel presence has become more than just a novelty – but essential to staying buoyant in this new retail landscape.
The retail sector has been in a state of flux for some time. With almost weekly store closures, higher fixed costs for stores and staff, and coronavirus lockdown measures uprooting consumer demand and reducing high street sales to a 25-year low, the pressure to increase margins has never been greater.
For retailers to survive, they need to focus on developing new revenue streams to improve profitability. That means investing in different channels in order to compete with the online industry behemoths.
After all, the modern buying process is a complicated one; and it’s made more complicated with consumers now stuck indoors. With multiple touchpoints in both the digital world and the physical one, it’s easy to see why some retailers are struggling to navigate the complexity. But for retailers to thrive, they must understand how the two channels work together; and the role that each must play in consumers’ end-to-end shopping experience.
Future-proofing bricks and mortar
Despite the endless tales of high street woe from the media, it’s worth remembering that footfall figures spiked in the last week of February – showing that the demand is there, albeit on hold through lockdown. In fact, bricks and mortar retailers were set to profit the most from Valentine’s Day spending this year according to reports. It seems that when it comes to buying cards, flower and chocolate for one’s other half, many consumers still head to supermarkets and department stores; and it goes to show just how important peak shopping days continue to be for high street retailers.
It’s no secret that there has been a resurgence of subscription services over the past five years too and subscriptions to online grocery deliveries have arguably proved the most lucrative of all for online giants. But it’s important to remember that bricks and mortar grocery shopping still has an 85% hold on all UK grocery sales – something that online competitors know only too well from the surge in supermarket demand during lockdown – so the major players are likely to continue prioritising their in-store offerings and find ways to use technology to further improve the in-store experience for shoppers.
Digitise to survive
The most successful online retailers have been investing in their online infrastructure for some time and rightly so. While bricks and mortar retailers chase footfall and product sales, online giants have an added advantage – being able to entice customers towards online shopping through the use of targeted advertising and services like on-demand delivery.
With almost half (40%) of UK citizens finding that retailers have been too slow to make the most of new technologies, competitive differentiation in the retail space can only come from innovation. It’s less about having a URL and great LinkedIn, and more about harnessing new technologies like chatbots and the Internet of Things to improve the overall customer experience – wherever they’re shopping.
After all, it’s not just about websites and social media savvy. Some innovation is taking online retailers all the way back to the grass roots of retail, with the development of Amazon Go Stores and more engaging shop which utilise digital catwalks to attract consumers in store and not just online.
Ultimately, retailers looking to future proof their businesses long term will successfully blend both – the customer experience online and in store. Busy customers are in search of convenience and have more channels available at their fingertips than ever before. Consumers want online product reviews and web chat options as much as they want in-person customer service and the best retail businesses know that. If a retailer can provide its customers with fast information online which converts to a sale and – more importantly – can do the same in store, consumers will be ripe for the picking.