Will digitalisation save the High Street?
By Chris Long, Managing Consultant at Capgemini
High Street retail sales have been at an all-time low for the past few years. Accountancy firm BDO recently confirmed that September recorded the worst consumer spending in eight years, and yet business rates continue to rise, and the slide of the Sterling is pushing up costs. All of this makes bleak reading for retailers…
Nevertheless, we shouldn’t write off brick-and-mortar just yet! Recent innovations like Amazon’s Go concept stores, Virgin Holidays opening a new chain of stores allowing customers to try out holiday experiences, and Action for Children opening a pop-up store to drive more participation for their Secret Santa campaign, shows that mortar isn’t heading the way of the dodo anytime soon. In fact, far from shying away from the high street, digital-native brands such as Warby Parker and Casper are actually moving from online-only to having a physical presence.
So, what is causing this renewed focus on brick-and-mortar and how can retailers create an in-store experience that can compete against the ever-growing popularity of online retail?
Customer expectations are constantly growing, with demand focused on convenience, speed, and the ability to choose where and which channel to shop through. In order to fulfil these criteria, retailers need to ensure they have both a physical and digital presence.
The main issue is that most retailers have been far too slow to adapt to this new shopping experience, resulting in sub-par service as customers move between the two. To solve this, retailers are attempting to leverage their stores to balance out the discrepancies between the in and-out-of-store experience; transforming their business to an ‘omni-channel’ experience.
However, many retailers tend to mistake ‘omni-channel’ with ‘multi-channel’. Whereas multi-channel relates to providing customers with the ability to shop and complete a purchase with a brand through more than one channel, omni-channel provides more of a comprehensive and integrated approach to retailing. Customers can start and stop their customer journey in one channel then pick up and complete it in another.
While customers still have a single view of a brand through an omni-channel experience, behind the scenes the picture is far more complex, with master data management required to piece together the jigsaw of orders, payments, products and inventory into a single view of the customer to offer a seamless cross-channel experience.
It is an ongoing battle and challenge that retailers are facing – but one that will allow retailers to derive real value. True omni-channel transformation will enable stores to act as fulfilment centres, creating hassle-free shopping for customers, whilst also increasing footfall and reducing the cost to serve.
Immersing yourself in the in-store experience
Omni-channel transformation provides retailers with the foundations and capabilities to transform their customer experience. But what does great customer experience mean and look like in the digital age?
Firstly, it should be centred on breaking down the barriers between a retailer’s online and offline offering through delivering an inspirational, immersive and interconnected experience for customers. At the moment, for example, consumers are increasingly shifting from wanting to buy individual products, to buying into the types of experiences and lifestyles that they view on online platforms like Instagram and Pinterest. Retailers must take advantage of this and reimagine both the in-store and online experience to showcase products that inspire and surprise, rather than stacking them in aisles or on traditional displays. Stores should also be trialling more immersive initiatives, such as 360-degree displays or product-testing areas in-store, to create a hybrid physical-digital experience that draws customers into the store and makes them want to connect with a brand.
The omni-channel also enables retailers to connect customers through technology, augmenting the store experience and empowering customers with all the information they need at their fingertips. Asking a chatbot which aisle the milk can be found in a sprawling supermarket, where the nearest store is that stocks your size of shoe, where to find your favourite store in a busy shopping centre; all these possibilities enable the customer to engage in a 1:1 conversation with a brand and help maintain and drive customer engagement.
So far so good, but the key to great customer experience isn’t just to offer each of these elements in isolation – it is to tie them together into an interconnected digital and physical experience that has been genuinely personalised for each customer.
The retail industry is in the midst of one of the biggest disruptions it has ever faced, and many businesses are at risk of reacting too late. Retailers must seek change now and address the barriers between their in and out-of-store experience by using omni-channel and customer experience transformation to rethink the store’s role.
The benefits of a balanced and optimised channel strategy will be the increased recruitment of customers across channels. This ‘omni-channel recruitment’ will be central for bricks and clicks retailers in the digital age. Store conversion rates can be up to 14x higher in-store than online, highlighting that if retailers are able to develop a compelling channel strategy that drives customers into key stores and retail locations, they can boost sales and growth.