Paul Skeldon, Mobile Editor, Internet Retailing, examines how mobile is changing the clicks versus bricks status quo.
The high street is suffering. Footfall is, well, falling and with shoppers becoming ever-more used to being sated instantly online, the lure of the real-world shop is waning. At the same time, online shopping is going from strength to strength. However, the picture isn’t perhaps as cut and dried as you might think, with omnichannel retail being a much more complex beast than many give it credit for.
Research from Qmatic UK of 100 retailers with between 501 and 3,000 employees, found that the majority of sales for multichannel retailers in the UK still come from in-store transactions. Furthermore, the research also revealed that brick-and-mortar stores are not at the end of their life, now or in the near future, with four in ten stating that their organisation’s physical stores will be just as important, if not more important in 2030, compared to only 23% who feel that by this time their organisation’s physical stores will be obsolete. This is backed up by a survey from ShopperTrak, which finds that more than a third of UK consumers (38%) still shop in-store as often as they did a year ago, while another survey from Omnico finds that 70% of shoppers aged under 35 would like to see store hours extended.
While it is easy to blame ecommerce for the death of the high street, what is actually happening to real world shops is that shopper habits are changing and the high street needs to change with them – and it needs to embrace technology to make it work. Shoppers see shopping as an event and as a destination. Gone are the days of heading out just to shop, now it also involves at the very least a coffee, if not a lunch or dinner and possibly all three – and a trip to the cinema or some bowling. Changing opening hours of shops and combining city centre and out of town shopping areas with these other entertainments is one of the main fixes for declining footfall. The other is to make shopping itself more of an experience. And this is where mobile comes in.
Retailers have long known that the answer lies in trying to combine the best of the online world with the best of high street – and the tool to do that is the mobile. According to Vanessa Walmsley, Managing Director at Qmatic, “The research clearly highlights the important role of the in-store environment, now and in the future. While online is snowballing, this channel will by no means replace physical stores. Instead, a blend of in-store, online and mobile will continue to shape retail’s future. However, with consumers now conditioned to heightened levels of convenience, retailers now need to adopt a channel agonistic, omnichannel approach to ensure the customer experience remains consistent across all channels, with the service received in-store matching that of online, and vice-versa.” Paul Lewis, Senior Director of Marketing at VoucherCodes.co.uk, agrees: “The high-street needs to take a smarter approach to counter tough consumer conditions and drive footfall onto the high-street. When shoppers are spending on food and drink, they are likely not spending on high-street items as they are enjoying the sunshine in the garden or at the park. He continues: “The digital and physical needs to work together to increase overall sales figures, shopping is no longer divided into clicks versus bricks and retailers need to be enticing consumers onto the high-street through seamless experiences.
Last year, VoucherCodes, part of RetailMeNot, discovered that greater use of technology to offer shoppers a more mobile-friendly shopping experience in-store is helping UK retailers to unlock an extra £200 million in sales each year and can help drive footfall. While half of UK consumers have admitted to ‘showrooming’; using smartphones or tablet devices to investigate reviews, product information and prices whilst in-store, research by RetailMeNot shows that 44% of shoppers in the UK are willing to spend more in mobile-friendly stores. VoucherCodes has been working closely with chocolatier Hotel Chocolat to drive sales both online and in-store.
Initially an online retailer, Hotel Chocolat has now opened more than 80 stores in the UK recognising that a majority of retail sales still happen on the high-street. Through VoucherCodes, Hotel Chocolat has been able to send targeted promotions to 8 million high-intent shoppers and 4 million app users allowing them to redeem those offers both online and in-store. Results showed that up to a third of customers chose the high-street, illustrating the strength of digital channels to drive footfall into stores. Michelle Corp, Online Trading Manager at Hotel Chocolat, said: “Hotel Chocolat has always recognised the importance of digital channels – and ever more importantly mobile– to drive footfall into stores. Multichannel promotions have proven a very effective way of encouraging discovery of our product range and brand experience, not only online but also in-store. As the shopping journey becomes more complex, we are committed to allowing customers to shop as and where they want and ensuring consistency of message and experience.” This experience is going to come from new technologies on mobile such as augmented reality and virtual reality – and my personal favourite, mixed reality.
“Only 3% of Britons say they no longer shop in-store”
Some 96% of consumers who have experienced Augmented Reality (AR) in a retail store say they found it helpful and report that it has improved their shopping experience, a survey by Vista Retail Support has found. Of the respondents who have experienced AR in a store, 96% say they have used an AR headset that allows users to view 3D computer-generated images of products as if they are in front of them. 92% of those respondents say they found the headset experience helpful. “New technologies that increase convenience are beginning to emerge in the retail space,” says James Pepper, Technical Services Director, Vista Retail Support. “AR brings the additional wow-factor for shoppers who are growing increasingly tired of stale shopping environments in the age of one-click ordering and next-day delivery.
Cleary in the cases where it’s been applied, AR has had a significant impact and there are huge opportunities for retailers seeking creative new ways to attract and retain shoppers”. Apple’s latest iOS mobile operating system does some incredible things with AR, offering the kind of experience fans of the technology have long dreamed of. Ikea is among the first to take advantage of the perspective and auto-scale iOS allows users of its app to place ‘furniture’ in their home and even see under it and around it. It is these technology-obsessed shoppers that retailers – in any channel – should be courting. One in five (23%) consumers is digitally obsessed, making almost all their purchases online, and inclined to shop with digitally advanced retailers, suggests the Buying tomorrow report from ecommerce consultancy Salmon, This group puts convenience and innovation ahead of the brand names, with almost nine in ten (88%) consumers saying that speed of delivery is more important to them than the brand being ordered (78%). The study questioned more than 6,000 consumers in the UK, US and Benelux countries, and suggests that 45% are either currently using or are likely to use Amazon Echo, Alexa or Google Home in the next 12 months. That’s ahead of those who are using or plan to use smart lighting (42%), smart fridges and other white goods (42%), virtual reality (40%) and Apple Home (37%).
A further 57% believe they are more digitally advanced than some retailers, while 60% say they would be more likely to shop with a digitally innovative trader. More than half (57%) say they can see why they might allow technology to buy goods for them automatically, based on their set of product preferences. That’s up from 53% the year before. Consumer hunger for new retail technology is growing: 23% identified as “digitally obsessed”, making almost all of their purchases online. But should retailers be that worried? To paraphrase Monty Python’s ‘Dead Parrot’ sketch: the high street is not “bereft of life,” “ceased to be” or even “just resting.” In fact, only 3% of Britons say they no longer shop in-store, according to Adyen. In fact, despite the prevalence of online – with 95% of people using it to shop in the UK – other channels are lagging behind expectations. Specifically, 40% of people have never shopped via an app and 75% have never purchased an item through social media. What this tells us about retail is that some shoppers are driven by digital and want the ‘new world’ experience. However, most aren’t. No, this doesn’t mean that the status quo will prevail, just retailers need to look at technology more seriously than they do currently.