With the High Street reopened, after a year of enforced change in buying habits where the majority went online, retail has reverted to “the new normal”. The COVID pandemic accelerated the shift to online; but is the future of retail digital only?
Just as the likes of Arcadia failed because they didn’t adapt to embrace the online, omni-channel retail experience, Russell Loarridge, director UK, ReachFive, argues that many pure-play online retailers too will fail if they don’t embrace a ‘clicks and mortar’ model that has the needs of the modern consumer at its heart.
COVID has changed the shape of retail. It has accelerated the adoption of ecommerce but it has also highlighted the limitations of an online-only model. The convenience of a slick online experience can be rapidly undermined by the disappointment experienced when the clothes don’t fit especially when they have to be time-consumingly returned.
Online can also short-change the purchase experience for bigger ticket items. Shoppers not only want to touch and gauge the quality of these items, they also value the expertise of those making the sale. However good the online experience may be and with great personalisation that drives loyalty and engagement, that experience can be fantastic it is not complete.
Many pure-play digital retailers have great operational models. They know how to meet customer purchase and delivery needs and invested in innovative technologies in a bid to nudge customers towards the right products. But what are they offering teenagers wanting to hang out on a Saturday afternoon, try on clothes, while sharing a laugh and a latte?
Clicks and mortar
Online is convenient, no argument. But the past year has reinforced the divide between essential and non-essential retail; the difference between the products people need and the items they enjoy buying. And, of course, every retailer is online now and customers have spent a year clicking from one to the other. Where’s the loyalty or differentiation?
The desire for physical shopping experiences is stronger than ever. If pure-play retailers cannot add high street engagement to the experience, other retailers will. Personal, human communication is a vital part of the engaged customer experience and without it, pure play retailers will begin to look as out of date as those failed high street retailers of the past.
There is no need for pure-plays to invest in the extensive store estate that created identikit high streets up and down the UK. But there is a huge opportunity to think creatively about how, where and when customers can become part of a physical interaction that reinforces the brand experience.
Pop-ups, for example, could create a destination with loyal customers invited for time-limited VIP events at their local town, before the pop-up moves to another location. The technology is simple Wi-Fi, tablets and mobile pay solutions can be in place. Loyalty solutions can capture customers both on and offline, creating a new customer destination that changes the perception and enhances the brand.
Adding a physical experience gives pure-plays (e.g. BooHoo) an even better chance to retain customers for longer, as they naturally move between brands. By building a profile for each customer across all the brands, retailers can follow customers as they move through teen fashion, for example, and start to look for something more sophisticated.
Rather than losing customers to the competition, proactive marketing can help to nudge them across the brand portfolio to keep them within the business. Invite post-university students to a pop-up store for a ‘first job’ make over the clever use of physical stores will provide new ways of engaging with customers that completely changes their brand perception and engagement.
Just as the traditional high street retailers were baffled by the online model, pure-play retailers have no experience of physical retail. With the acquisition of the UK-based Arcadia brands and Debenhams, online retailers Boohoo and ASOS missed the chance to buy this high street expertise, those individuals with skills in shop fit and face-to-face customer interaction.
Buying these skills back in or developing this expertise internally will take time. But other barriers have vanished, for example, retail landlords are agreeing far shorter leases with regular break clauses. Customers like the change and the fact that high streets are no longer the same up and down the country.
This change can be achieved as long as pure-plays accept that an efficient and personalised online retail experience no longer offers differentiation, and recognise the shift in customer expectations and attitudes. Clicks and mortar is the future, to create and retain loyal customers, retailers need to be able to combine the personal online experience with the immersive engagement that is only possible face to face.
The author is Russell Loarridge, director UK at ReachFive.
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