Last year Mary Portas released 'The Portas Review', which set out her recommendations for reviving the high streets of Britain's towns and cities.
As we said at the time, she seemed to have a blind spot as far as the role of the internet and digital technology is concerned. In fact, the report said that the internet 'is one of the key threats to retail on our high streets'.
We see it differently: the internet is vital to the future of the high street.
In our new report, 'How the Internet can save the High Street', (free for Bronze members upwards) we explore how digital technology can be used to drive footfall to the high street, and to enhance the in-store experience for comsumers.
Here are a few highlights from the report....
Consumer trends
The internet is not going away, so retailers need to adapt to changing consumer behaviour, or face losing business to savvier competitors.
The growth of e-commerce, as well as smartphone penetration and increased use of mobile internet, offers some serious challenges to high street businesses.
Let's look at the stats:
- 80% of UK shoppers have reserved products online for collection in stores (up from 74% in 2011).
- 44% of UK shoppers always research purchases on the internet before buying offline.
- Just 4% never use the internet for product research.
- 43% of UK shoppers now use smartphones while on the move to compare prices and read product reviews (up from 19% last year).
Have you used your mobile to compare prices and look at product reviews while out shopping?
Driving more footfall into stores
The report looks at a number of ways that retailers can use the web to drive customers into their stores, including the use of vouchers, social media, location-based marketing and mobile.
For many offline purchases, the research process begins online. A recent Econsultancy survey, carried out using TolunaQuick, found that 44% of UK consumers always research purchases online before actually buying in-store, while a further 52% sometimes check online before buying in-store.
Therefore, high street stores must have a website which, at the very least, allows potential customers to access information about the product range and location.
As House of Fraser's Andy Harding says:
If I was a small offline retailer on a budget, I'd start by building a tight website with the store's products and ranges and preferably with some transactional capability which can be fulfilled from the store itself.
Ensure that the website has a really good store locator and that all the content can be accessed on a mobile. Then add a small paid search budget across some long tail terms and keep reinvesting any profits into growing the online range. Then as soon as the budget will allow – add in the capability to order from the website in the store.
Reserve and collect
Allowing customers to reserve items online for in-store collection is a must for multichannel retailers. It fits nicely with consumer product research patterns, and has paid dividends for those companies which have adopted it.
For example:
- Argos is the original success story for reserve and collect, having launched its own service more than ten years ago. Check and Reserve accounted for 29% of Argos' £819m sales in Q1 2012.
- Halfords introduced a click and collect service, and now 86% of all its online sales are for in-store collection.
- According to Andy Harding, 35% of House of Fraser's online orders are being collected in store. Also, around 25% of people collecting in store make an additional purchase when there.
Half of the top 50 retailers are currently not using click and collect, so there is room for them to improve their multichannel strategy.
Enhancing the in-store experience
As well as using the web to help to attract customers to the high street, businesses can also use this technology to provide a more useful and enjoyable shopping experience for customers.
For example, relatively new technology like interactive mirrors can provide a 'wow' factor for shoppers, while at the same time being useful, and enabling them to share their images on social sites and spread the word.
We will see more stores using digital technology. Indeed, M&S just opened its new Cheshire Oaks store, with an array of digital goodness, such as Wi-Fi, video screens and virtual counters.
Perhaps the most effective thing that offline retailers can do is to adapt to the growth of smartphone adoption and appeal to mobile users.
Using mobile
Mobile, and the use of apps and sites for price comparison, offers a very obvious threat to offline retailers as shoppers can often find the same product cheaper online.
However, the high street retailer needs to use all of the advantages they can offer to counter such a threat.
Get customers to use your mobile site or apps
The first thing is to accept that shoppers are going to use their mobiles in store. If customers are going to pick up their phones and look for reviews, persuade them to use your site for this. Promote it in store.
If you can provide the reviews they need, then customers won't have to use competitors' sites where they might find a better deal.
Better still, provide them with a link on the store shelf where they can find reviews, or maybe a QR code or barcode to scan and view further information.
Provide wi-fi
Make sure shoppers can access the internet on their phones when in stores. This will improve the experience for them, and ensure that they can access mobile sites and apps, scan barcodes etc.
In addition, having customers logged in to wireless networks on their phones can allow retailers to target them with very precise and timely offers.
One great example of this came from the French Casino supermarket chain. Its iPhone app allows users to compile shopping lists before heading to the store, where they can use their mobile to scan and pay for items in store.
This is useful for the customer, but also provides the retailer with a wealth of information of the customer's preferences and shopping habits. It also gives Casino the ability to target customers in real time, according to their location.
This is something that UK retailers, including House of Fraser, Tesco and Debenhams have been trying out.
Conclusion
While it's very easy to see the internet as the enemy of offline retail, and to blame it every time an offline retailer fails, this is a short-sighted view.
Quite often, it is the inability of businesses to adapt to the challenges posed by the web that causes their downfall.
Those that have embraced the internet to provide an excellent multichannel offering, such as John Lewis and Next, are managing to grow sales during a recession. Indeed, it is often the online and multichannel sales that are compensating to poor high street revenues.
While The Portas Review contained some solid recommendations, it is essential that high street businesses learn to love the internet and use it to their advantage.
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