Traditional retail is on its knees. Whichever way you spin it, brick-and-mortar and big box retailers are falling by the wayside at an alarming rate, and have been doing so for the best part of a decade.
Maplin’s demise is just the latest household name to take its place in the high street graveyard, with the retail sector facing its toughest test in recent memory. There are a multitude of reasons and excuses that can be offered to explain away the situation. Many high street retailers are suffering from a slowdown in consumer spending, a weakened sterling currency, competition from online sales, increase in the living wage, Brexit, rises in business rates and additional costs associated with same day delivery services. And while nobody disputes that these are all genuine factors, businesses have always had to adapt to survive and the sooner retailers face up to that, the better.
With traditional brick-and-mortar retailers that thrived in the ‘90s and early Noughties consigned to yesteryear, it is time to look to the future. The rise of online retailers spearheaded by Amazon’s dominance cannot go unnoticed. And while online sales have taken away a significant chunk of sales away from physical retailers, there is no tangible indication that online will completely replace them. As Mike Buley, Exertis retail director, states ‘an omnichannel approach is clearly what the consumer wants’.
He adds: “brick-and-mortar stores still have a vital part to play. Combined with a strong online presence, offering a great range of products, with availability and a choice of delivery mechanisms: same day, scheduled or click and collect and you have the perfect scenario for the consumer.”
Likewise, Annika Fargstrom, head of Retail Sales and Distribution at Epson UK, believes that ‘the future of retail is true omnichannel’.
“Online will keep growing, and when artificial intelligence finally becomes mainstream, the whole shopping experience will drastically change,” she says definitively. “On the high street side, pop-up shops will become increasingly widespread. Vendors need to get closer to their customers and by setting up temporary shops they can launch new products to a live audience and get first-hand market knowledge.”
And there is evidence to back up the assumption that physical stores can co-exist and compete with online retailers. According to the European Hardware Association, specialist retailers are still sought after for hardware purchases. Interestingly enough, specialists – both online and in terms of physical retailers – came out on top, showing a greater demand for knowledge (see graph over the page). “In the past, these kinds of surveys would split online/ offline,” explains YoYo Tech managing director CK Kohli. “However, in this survey, there was a distinct split between specialist and non-specialist. Alongside the usual Channel resellers, the ‘specialist’ category shows that there is a place for [physical] retailers. Specifically, when people want an experiential purchase and knowledgeable staff.”
Interestingly, D-Link’s UK and Ireland country manager Paul Routledge believes that the popularity of online will eventually drop off, leading to rejuvenation within the physical retail space. “The future of retail seems to be moving towards vendors choosing to sell via easy-to-use online services such as Amazon,” he says. “While I see the future of retail continuing to move in this direction, I’d urge a note of caution. Online resellers need to innovate in order to crack the customer service conundrum, if they’re going to provide a complete offering to fully replace brick-and-mortar resellers. If they don’t, I can envisage a situation where, over time, the popularity of online shopping starts to decline.”
Meanwhile, Routledge also believes that bricks-and-mortar stores ‘are able to provide unmatched customer service, whether this is over the phone or in person’. He adds: “The customer is able to seek advice and support, in order to ensure that they purchase the most suitable product for their requirements, and leave feeling reassured and satisfied. Furthermore, resellers can offer advice on setup and installation, post-sales support, as well as complementary products and services. This is where brick-and-mortar retailers are invaluable compared to the online world.”
However, for the time being online is still ruling the roost and brick-and-mortar stores have a way to go if they are regain some of the lost market share. Within the present and future omnichannel retail space the role of physical retail is to provide both ‘theatre and knowledge’.
“Brick-and-mortar outlets are still needed – customers need to be able to see and touch products, and stores act as great vendor showrooms,” Fargstrom adds. “However, the huge profit margins and lack of staff expertise on retail sales floors can no longer be accepted or afforded. There are so few brick-and-mortar stores left, so retailers should ensure they create a good customer experience. Consumers want theatre and knowledge when they come through the doors; just providing space, heat and light is not enough.”
Just as important as having knowledgeable staff is creating a ‘theatrical’ in store experience. Lino Notaro, Retail Sales director at TP-Link believes the way to achieve this is to think outside of the box. “The key is for retailers to arm themselves with the ‘wow factor’ or ‘create theatre’ in store,” he notes. “Let’s take Smart Home for example, the more effectively customers can be ‘shown’ how easy it is to ‘Switch on a Light Bulb’ with a voice activated device, the easier it will be to introduce new users to this segment. That said, I’m conscious that busy stores can be very noisy particularly at weekends, so ‘purpose built showrooms’ could be added for such demos.”
He adds: “What about adding one of those very popular ‘concessionary coffee shops’ on your premises to keep your customer in store, (rather than have them step into the Costa next door). Another interesting concept is the trend of adding shop in shops within out of town retail stores. We have seen Tesco (for one) accommodate concessions like Next and Currys in a small number of its stores. Furthermore, the recent tip-up between GAME and Sports Direct is another intriguing idea, with Sports Direct placing a number of Belong ‘gaming areas’ in store, (with all of the latest equipment).”
Retail is here to stay. While online will no doubt continue to thrive, there is still a place for brick-and-mortar retailers, it just needs to continue to re-invent itself to the consumer, to stay relevant, up to date, informed, innovative and vital.