Stores still very much have a role to play in retail, they just need to be part of the overall omni-channel mix. That is the message from a global study by Periscope By McKinsey, which finds that at least 60% of consumers in Germany, the UK and US say they engage equally with online and offline shopping channels.
More encouraging is that the physical store still remains king with 50% of consumers in all countries surveyed saying that the bulk of their shopping activity in the past year was in-store – which goes against what both Next and Ted Baker are saying, but overall, shoppers do want them.
With that in mind, why then are we in the middle of a retail apocalypse and poised ready to wield the shovel to bury the dead High Street?
The problem is that while many people still use them, they also use other channels as well and, with increasing costs of ground rents and stock, the resultant movement of some sales to other channels means that they can’t pay their way.
This is a very different situation to the accepted tropes of the High Street dying because it can’t compete with online. What is actually happening is that the High Street as is isn’t a compelling enough part of the omni-channel retail experience to pay its way.
So what can be done? Two things. Firstly, cheaper rents and costs of having a physical store are a must. This will no doubt be forced on landlords and local councils by the need to attract someone – anyone! – to occupy the town and city centre sites currently being vacated.
Secondly, retail stores need to reappraise what they do. While the Periscope By McKinsey study shows that people around the world still shop at stores, they need to adapt to be part of a greater, more digital whole.
To this end, analysts at Forrester believe they have the answer. They have concocted a five-stage view of what retailers need to do with their stores to make them fit with their digital strategies.
Naturally, this includes the physical-digital hybrid model, as well as the need for in-store experience centres, focussed on engagement rather than sales. But interestingly it also looks at how stores can also be drop-in distribution centres, the place where 30-minute online orders get fulfilled.
This, along with the move towards service rather than sales, is an interesting proposition, not least for stores in areas where there are also people working or studying.
While the accepted – though yet to be properly implemented – ‘store as experience and engagement centre’ model often touts stores as a destination, the idea of using them also for the practical purpose of aiding improved fulfilment adds a whole new, practical dimension to their remodelling. Destination retail is more immersive and often something for weekends and evenings – and not for everyone.
Fulfilment taps into another segment of shoppers – those that are on a mission. To save the High Street, both these segments need to be catered to.
And with the warm weather in Feb bumping up retail in the UK, we can only hope that, Brexit aside, things might be looking up for retailers.
