Commentary

Should retailers give up on UK's High Street?

Andy Wood, chairman, Go Inspire, explains why a mix of innovative and traditional channels is the ideal way of engaging with today's consumers.

Photo by iStock.com

December 10, 2018

By Andy Wood, Chairman, Go Inspire Insight

Retailers have been facing more than one challenge over the last year; discounter and online competition, more expensive energy and rising business rates are just some of the extra expenses that retailers are now juggling. As a result, some of the main U.K. brands have been forced to shut down a consistent number of stores across the country, most notably New Look with 60 closures, followed by Mothercare with 50 and House of Fraser with 31 store closures .

So is this a turn of the tide and a signal of things to come and should retailers abandon the high street once and for all?

In an increasingly digital world many businesses have chosen to focus — sometimes almost exclusively — on online and email communications instead of promoting the in-store experience. It is unclear whether this lack of attention for the bricks and mortar shopping experience has contributed to driving this shift in marketing budgets or whether this is a consequence of flailing high street revenues.

What is clear, however, is the data that shows that multi-channel customers are more loyal and spend more than single channel customers and store-only customers have less churn than web only customers. Specifically, it is shown that shoppers that are targeted with a mix of direct mail and email marketing spend 25 percent more than those that are not.

So even if the dynamic between physical stores and online/mobile is changing, retailers shouldn't abandon their bricks and mortar presence and drastically migrate to digital; all they need to do is find the right balance between physical and digital — traditional and online channels.

It would be a grave mistake to consider "non-digital" marketing obsolete; traditional channels are crucial for many reasons, for example they help manage the cost of acquiring, keeping and growing customers. It should also be kept in mind that retaining and developing in-store shoppers — who are likely to remain loyal and spend more — has far higher ROI than constantly being on the hunt for high-churn, web-only customers. It's through a multichannel approach that retailers can achieve the best of both worlds, targeting not only those who favor e-commerce but also in-store aficionados.

In order to achieve the perfect multichannel strategy, marketers should be careful to not commit some common — but critical — mistakes.

First of all, CEOs and CMOs need to establish a stronger trust-basis and solid reporting metrics play a key role in this. Focusing on hype and trends rather than solid data can build a misleading image of the audience, resulting in poor response and engagement as well as ultimately loss of revenue.

An example of inconsistent strategizing are so-called blanket promotions that not only lack tailoring to the customer and therefore target a host of people inefficiently but are exposed to the competition and attract serial switchers rather than ideal loyal customers.

Instead of blindly promoting to all and sundry, retailers should be investing in implementing targeted rewards and offers delivered through a CRM system or loyalty scheme. Through this tailored and customercentric approach, shoppers would only be offered products that are really interesting to them via their preferred channel.

Carefully monitoring consumers' behavior in the digital world but also within the store environment and building simple but efficient actions around them, can really make the difference to a business' success. GDPR compliant tools are already available to help retailers identify the right marketing strategy and can deliver important results such as increased customer loyalty and higher ROI.

What's important to realize is that this industry is not polarized between traditional media and digital, stores and e-commerce, but that a mix of innovative and traditional channels is the ideal way of engaging with today's consumers. In an age when customers are truly multichannel, businesses need to make a variety of options available and the high street is one of them.