High Street vs Online Retail: An Integrated Approach

With high street stores in crisis, it is becoming evermore important to optimise the performance of your online and offline stores through an integrated, multichannel approach.

As of late, high street retail stores have been witnessing plunging profits and countless store closures. House of Fraser, who have been operating for 169 years, started off the year by closing down a number of their stores, but they have now officially gone under and have been bought out by Sports Direct. New Look have reported they could close up to 100 stores, including their flagship store Oxford Circus Store. Debenhams, M&S, and H&M have all seen a huge drop in sales, while industry giant Carphone Warehouse experienced big cuts to their high street network. Similarly, Mothercare axed fifty branches of their stores in May to save the struggling baby chain. Dozens are likely to follow. By comparison, online fashion brands are experiencing great success with rising sales and high profit margins. The slow death of the high street correlates with the growth of online e-commerce giants such as Amazon and ASOS; just yesterday for example ASOS announced that their shares have risen as much as 15% after they met their downgraded forecasts for full-year profits and reiterated its growth credentials.

Who is killing the game in the online fast-fashion market and why?

UK-based online fashion retailer Boohoo is a bigger hitter in this industry, going from strength to strength, as high street retailers look on in envy at their soaring profits. In FY2018 they had sales of almost £580m. This can partly be attributed to the success of their new brand Nasty Gal and also from the acquisitions of PrettyLittleThing, which clocked up a 228 per cent rise in sales to £181.3m.

Why are brands such as Boohoo experiencing such stark success at the same time as well-established, staple high street brands are going under?

One crucial aspect of Boohoo’s business model is that they are continuously ahead of the curve when it comes to fashion trends emerging on social media. They are in touch with their target audience, and aim to reflect cutting edge fashion styles in their own product line at affordable prices. This is a massive pull for their young audience and at present there are few high street stores with a comparable value proposition. Furthermore, they successfully utilise social media and celebrity influencers as a platform for marketing their products to their (prospective) customers and driving brand awareness. Crucially, they are keen to build a personality for their brand, by staying up to date with social issues and movements in and around the fashion industry. Boohoo focus on inclusivity, with models of all different races and body shapes; they are very proud of their plus size range, which gains a lot of recognition for the brand as being forward thinking and leading change in the industry. They have ditched overly retouched photos, and feature relatable women, not editing out their natural flaws such as cellulite, stretch marks, and even back rolls.

Asos, are another online retailer powerhouse experiencing ongoing sales growth, with their pre-tax profit for the year to August 31st at £102m, up from £80m last year, and a revenue increase of 26% to £2.4billion.

Not only are they up to date with fashion trends, but they are an industry leader when it comes to e-commerce technology, as they continue to look for ways to improve their customer experience. For example, before making a purchase, with most of their products, you can watch a video of a model walking up and down a catwalk wearing the clothing item, to get a more realistic idea of what the clothes will look like, which considerably reduces the fear factor of buying clothes that may not fit when they try them on for the first time at home. To the same end, they also use handy sizing tools and features to ease the decision-making process and offer a generous returns policy. Notably, last week Asos announced that they would be the first fashion retailer in the UK to launch on Google Assistant, meaning shoppers can now search for products across popular categories using their voice. To do so, customers in the UK and US can initiate conversation with the Asos shopping guide named Enki by saying, “hey Google, talk to Asos” to their smart speaker or Google Assistant app. The relationship between technology with voice shopping is expected to be worth £30bn by 2022.

Obviously there has been a shift in consumer behaviour and there are a new generation of shoppers who perceive online shopping to be an easy and innovative way of purchasing items. That said, bricks-and-mortar stores still have their place. The success of brands like Asos and Boohoo is not simply a condition of their status as an online retailer, but rather is the result of taking the time to better understand customer needs and to improve their overall experience, which are both important transferrable practises.

How to optimise the performance of your bricks-and-mortar stores and survive in a tumultuous industry.

You must harmonise your online and offline stores with a multichannel, consumer-led approach A good online performance, even with established brands might not be enough to save your physical stores. Here are some suggestions as to how you can improve the performance of your offline stores:

1) Enhance your in-store customer experience by utilising new technologies such as VR and augmented reality.

2) Further improve in-store customer experience by making payment methods faster and more efficient. Take Amazon Go for example:

At the beginning of this year Amazon launched their first physical grocery store in Seattle called Amazon Go. The store is checkout-free, meaning that there are cameras around the store that log what you put into your basket and then you simply leave the shop with your items and they automatically charge the amount to your credit or debit card on file. The ‘just walk out’ technology is the most advanced shopping technology in the world, with countless benefits. It puts an end to long checkout queues, you have automatic stock control, and it gets rid of shrinkage (stores typically have 3% of stock stolen). Moreover, rather than manning the checkouts, staff can be put to better use providing shopping advice and assistance, which helps to sell more product and increase customer satisfaction. In turn you improve the self-worth of your staff, who are able to make a valuable contribution to the business using a more specialised skill set.

Of course, you don’t have to take this approach literally, but this provides a good example of how you can successfully rethink traditional approaches to payment methods.

3) Take your customer service to the next level. If you are going to use an integrated approach you need to make sure that your staff know just as much information about the products you are selling, as a customer could find out themselves online. Equally, you could provide your staff with interactive technology such as iPads to bring the platforms together and to help customers to visualise easily.

4) Give customers incentives to come into the real stores by promoting unmissable, exclusive deals that can only redeemed in-store.

5) In-store events provide incentives to customers, but also boost awareness of the brand and create a buzz on social media channels, especially when leveraging influencers. Makeup brands for example could organise tutorials and how-to demonstrations, and tie in product discounts. Read about how Olivia Burton have successfully integrated many of these strategies into their flagship store to create a unique and differentiated customer experience, here.

6) As you would update your website, continually refresh your store layout, changing up window displays and mannequins. Equally ensure your visuals are engaging both online and offline; produce high-quality, beautifully shot products and editorials across both platforms.

7)  Uphold your brand reputation and integrity by using discounts sparingly and for limited periods, especially for new products. This way you also ensure more consistent purchases and visits rather than buying patterns concentrated around peak periods.

Apple enforce many of the strategies with their offline stores. You might ask, why do Apple need high street stores in the first place? They are selling products which you can buy online with ease and companies like Samsung don’t have their own physical stores.

If you think about it, Apple have mastered a perfect integrated approach and their stores work in their favour for a number of reasons. Firstly, it helps to give the big corporate entity a more human, more relatable face. Being able to go and see a real person to sort out your problems leaves a much better taste in your mouth than having to trawl through online solution pages and navigate through techy jargon all by yourself. Furthermore, you hang out with ‘cool’ people that are also apple fanatics and the stores are visually stimulating, reinforcing their strong brand identity. Secondly, when they release a new iPhone for example, they could easily just sell them online, in fact it would perhaps be much more efficient in terms of sales volume if they did, but by releasing them in-store and making people queue up to buy the latest phone, it creates a hype and an image of shortage, which drives demand. Often long queues outside their stores are publicised on TV and the news, providing Apple with a free source of marketing to a wider market. The regular but low volume of product maintains an air of newness about their products, but creates perceived scarcity.

By comparison, Visible, which opened its headquarters in Denver earlier this year, has a business model which is pretty much all virtual. Visible is the millennial marketing arm for Verizon, the American multinational telecommunications conglomerate. Visible hopes to attract customers nationwide who want to pay less for unlimited data plans. It has no stores and no sales people. It takes digital payments from credit cards, Paypal and Venmo. New customer sign up through an app are then shipped a SIM card for next-day delivery. Communication is all done in the app, including cancelling service. Below you can see the initial marketing campaign of the startup:

8) Click and Collect / Local Inventory Ads

Davies + Scothorn are currently working with Intelligent Reach, who help retailers and brands optimise product visibility across channels and marketplaces with augmented product data & scientific testing that drives conversion. They also help businesses with offsite product discovery. They argue that click and collect is a service not to be overlooked by businesses wishing to link their online and offline channels and fundamentally, if done right, it can improve conversions as well as sales online and offline.

Click and collect allows customers to buy a product online and pick it up from one of their offline stores at their convenience. Depending on the availability of the item, a customer can pick it up a few days after ordering or even same-day. The service puts power into the shopper’s hands and gives them reassurance of availability and confidence that they won’t miss the delivery and that they are able to return it immediately if not suitable.

You can take this a step further with Local Inventory Ads (LIAs). Local Inventory Ads are ads that appear when someone searches for a product near them. Clicking on the ad takes the consumer to a Google-hosted store-front where store hours, proximity, price, rating and stock are made available.

An additional feature of LIAs, and this is the important bit, is the ability to include a click and collect feature in your listings. The Google Merchant Centre allows retailers to provide a click and collect annotation on their Local Inventory Ads which as a result, makes your LIAs even more effective, directly connecting online with online.

Say you need a birthday present for someone urgently. You could type ‘coffee maker near me’ into Google and you will be shown listings from stores in relative proximity to you. You might click an ad and spot “Click & Collect” but it offers no inventory information, which doesn’t offer same-day pick up. This is no good. A second advert however offers you inventory information and click and collect. Knowing it will be immediately available and ready for collection is a huge help and you can purchase it there and then online. You can go straight to the store and pick it up within a few minutes. This lowers the possibility of refund and allows for upselling.

For technical information and support to help you achieve the best results with LIAs get in touch with Intelligent Reach here.

Summary:

Every decision needs a strategy and reasoning behind it; if you are going to do something ask yourself why and how. There is not one solution and every business will be different, but take an integrated approach and put the customer at the centre of everything you do. Without abandoning your brand ethos, make yourself aware of changing behaviours and adapt accordingly.

If you want to grow and scale your business feel free to get in touch.

Email: millie@daviesscothorn.com

Or give the office a call on +44 (0) 1283 532780.

Alternatively, come in for a chat and a coffee, our address is: The Studio at Hodges, 82 Horninglow St, Burton-on-Trent, United Kingdom, DE14 1PN

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