With increasingly discerning shoppers, shifting audience segments and experiential marketing on the rise, the High Street has more than a few challenges to face. Our 2018 European High Street Social Sentiment Report analyzes social sentiment of 29 popular chains and an overview of the category, with insight around indicators that all brands must pay attention to, starting now!
Looking at today through lens of tomorrow
Many brands confuse doing well with a position of safety. The state of the High Street offers a cautionary tale. The past ten years have brought significant changes, that have affected much more than just the storefronts.
The advent of big data has felt aggressive to affected retailers, no doubt, but it’s really in its infancy, with digital transformation blazing a path for disruptors of tomorrow in every category. We can see the affect it’s having on businesses already – large and small, as competition increases almost daily and can come from anywhere in the world.
And, as we speak to in the report, “the most agile among them [are] pivoting to identify and accommodate new segments” in response to (or to get ahead of} this threat. Some are experimenting with “retailtainment” or mastering a strategic, omnichannel approach, while others appear to be leaving an opening, blissfully unaware of crafty competitors coming for them.
Adopting a digital approach that combines offline and online strategies isn’t just a marketing option at this point, rather, it’s a “which business will be around in five years?” indicator. For although in-person shopping is still top dog with consumers, there’s no guarantee this trend will continue.
And when we take rising storefront costs and taxes into account? Well, the situation becomes even more dire, unfortunately . . .
Increased costs of doing business
Retailers are being hit with rising real estate rates, while also paying significantly more tax on their wares than digital, and equally lucrative competitors. So, they need price points to match online competitors while experiencing a much higher cost of doing business.
In 2017, there were more than 30 sizeable retailers including Carpetright, New Look, Prezzo, House of Fraser announcing company voluntary arrangements (CVAs) where they seek rent reductions and other concessions to help them along. This has a ripple effect, putting similarly positioned brick and mortar competitors at a disadvantage and places landlords in the crosshairs all around, with more and more wanting comparably lower rents in toney High Street locations.
As a result, the number of high street retail jobs that have been lost or put at risk of redundancy this year numbers in the tens of thousands. It’s scary, for sure.
Does this mean the High Street is doomed to fail? Not at all, and we talk about why in the report – but (hint) monitoring sentiment and taking consumer shopping experience into account, from soup to nuts – or from store to home – are key ingredients to success!
Don’t underestimate that last mile
Shoppers aren’t privy to the internal struggles shops face and haven’t given up on in-person shopping, as we mentioned – they actually prefer it! “82% of the public prefer shopping in a brick-and-mortar store to purchasing online because products can be viewed before a commitment is made to buy.” Trouble is, they’re not pulling the trigger in-store every time, making showrooming a constant threat – and for good reason.
What is showrooming? The practice of exploring options in-store and then purchasing online for a variety of reasons.
Some consumers use it to comparison shop, finding lower prices offered online after deciding to purchase once they see an item up close, but more often than not, it’s the same price and they’re buying online because of delivery options. And this is where retailers become last mile losers.
This is unfortunate and doesn’t need to happen. Whoever masters exceptional last-mile delivery in a given category will own it, hands down. “Last mile delivery e-commerce sales, spanning a variety of product types including apparel, entertainment, food, health & beauty, electronics and more, are expected to reach $1.35 billion by 2018, an increase of 28.8% from 2013.”
That’s a huge chunk of change for retailers of any size to leave on the table.
All it takes to win again on the High Street, or anywhere, is a little targeted adaptation. And we share examples of brands doing exactly that in our 2018 European High Street Social Sentiment Report . Be sure to check it out!
Is your brand adapting or just existing? We can help you understand the difference in your category and identify new segments ahead of the competition. Contact us for a demo!