The clock is ticking for traditional shops as retailers rethink the relationship between selling online and the store, a leading academic has said.
Speaking as he launched an 18-month study into the future of retail, Richard Cuthbertson, director of the Oxford Institute of Retail Management at Oxford University's Saїd Business School, said the traditional retail model was “clearly broken”.
“The experience of high street chain Game [Game went into administration yesterday] is no longer unusual as we see the negative impact of retail sector change – redundancies, bankruptcies and takeovers as retailers try to adjust to new channels and formats, reduce costs, improve efficiency and survive,” he said.
“At the same time, emerging technologies are providing the best retailers with new opportunities to interact with customers, with greater potential to improve service and increase loyalty, sales and profitability.”
Cutherbertson said that rising retail costs, changing customer expectations and the need to reshape and rejuvenate both town centres and out-of-town stores all meant “that the clock is ticking for traditional stores.”
“Many retail businesses are actively reconsidering their business models and particularly thinking about the relationship between digital and traditional activities,” he said.
The new project aims to chart the retail landscape, through talking to people working across the retail sector and to policy makers. In particular the Intel-sponsored project will look at the relationship between digital and physical stores.
Both store and online sales will be ‘transformed’, said Cuthbertson, by digital media, with online moving into shops both through store-owned mobile devices and loyalty programmes and through customers’ smartphones, used to check alternative products before buying. The study would therefore also look at what information retailers should be providing in-store.
Cuthbertson said: “Few retailers have yet developed a convincing strategic approach to effectively marrying online and instore retail, and are failing to explore the opportunities the two platforms could present if aligned.
“For many retailers the two platforms are only loosely related at best, and at worse, they actually compete with each other. We anticipate much more alignment of the two platforms from the best retailers, with richer digital experiences in store as customers use these facilities to review and test products, perhaps purchasing online – even if in-store.”