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High Street shops need to learn from online retailers if avalanche of store closures is to be reversed, experts warn

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High Street closures could be averted by change of mindset
High Street closures could be averted by change of mindset
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High Street stores are closing at record rates across the UK, but retailers can reverse the trend if they wake up and learn from etailers, experts say

Bricks and mortar retailers must “stop hitting snooze and hiding under the duvet” and learn from what online retailers are doing right if the avalanche of store closures hitting UK High Streets, experts warn.

 

As research by PwC and the Local Data Company reveals that 1,634 new High Street stores opened in the six months to the end of June – a 4% increase on the same period last year – 2,868 stores shut, leaving a net of 1,234 stores closing on UK’s top 500 High Streets in the first half of 2019.

 

The biggest net closure rate since the study began in 2010 saw fashion retailers closing in the largest numbers, followed by restaurants, estate agents and pubs. However, some of the empty units were replaced by takeaways, sports and health clubs, the study finds as the face of the High Street changes.

 

Lisa Hooker, consumer markets leader at PwC, told the BBC: "The decline in store numbers in the first half of 2019 shows that there’s been no let-up in the changing ways that people shop and the cost pressures affecting High Street operators. Retailers have to invest more in making stores relevant to today’s consumers”, but added that "new and different types of operators" needed encouragement to fill vacant space.

 

Yet, while industry watchers have been quick to blame Amazon and ecommerce for the decline, the retailers themselves need to shoulder some of the blame, some believe, and should be looking towards how to learn from what etailers do right to keep their businesses going.

 

According to Mike Callender, executive chairman at REPL Group: “[This should be] the final wake-up call high street retailers need to stop pressing snooze and hiding under the duvet. Bricks and mortar stores must stop seeing online retailers as direct competitors and start looking at what they’re doing right to learn from their successes. High street stores already have a big advantage as, particularly with expensive items, people want to touch and feel the products which they are unable to do with VR or online. However, they’re failing to capitalise on the assets available to them and instead look to activities such as discounting to try and increase profits.”

 

Stefan Spendrup, Vice President, Northern & Western Europe, SOTI agrees. “These retailers are struggling to survive because they are falling behind the tech trend,” he says. “Rather than competing against the online world of e-commerce, retailers should be adopting the right strategies to complement it and accommodate changing shopping habits. If store retailers want to remain competitive in today’s volatile climate, they need to be agile and adopt systems that make online to instore transactions seamless. Retailers must consider integrating a mobile first strategy across their entire on and offline operations to streamline the value chain, from supply to distribution to shop floor. They should be offering personalised services, and mobilising retail staff through technology to streamline intelligent customer interactions.”

 

But all is not lost. According to Spendrup: “Despite today’s damning news for the high street, there is still a clear opportunity for bricks and mortar retailers to innovate, harnessing all of the capabilities that technology now provides, such as artificial intelligence and the Internet of Things, to enhance the customer journey. This will also provide real-time, data-driven insights that retailers can use to improve their interactions with customers and ensure their stores remain competitive in the digital transformation age.”

 

 

Callender concurs, citing how bricks and mortar retailers can start to use data to improve customer experience, just as their online competitors have been doing for years. “Bricks and mortar shops collect just as much data, from the amount of people through the door, to the browse time on various products, to which items are most popular,” he says. “Supermarkets can even cluster or hotspot where customers walk or identify which routes they typically take. The problem is, they’re not analysing this data or using it to improve. If high street retailers begin to use the tools at their disposal and learn from their online counterparts, they could start to buck the trend of store closures.”

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