How retailers can keep up with the pace of change

Has the future of retail ever looked so bleak? From crumbling giants like HMV and Hammerson to headline-grabbing losses at Laura Ashley and Paperchase, it’s fair to wonder what the future holds for the high street. Factors like cold weather and inflation haven’t helped the recent slump, but it’s the rapidly changing shopping habits and demands of modern consumers that should be keeping retailers awake at night. If stores are to survive, it’s clear they need to change. But what does the future of the high street actually look like – and what can brands do in 2019 to prepare for it? Chore or cherish? There is mounting evidence that consumer behaviour is dividing into two modes of shopping: “chore” and “cherish.” We go chore shopping to purchase commodities, expecting our experiences to be as convenient and seamless as possible. Meanwhile, cherish shopping describes the more experiential side of retail, centred around in-store product discovery and socialising with others. And while retailers may be struggling on the whole, there’s evidence that “cherish” shopping behaviour is on the rise. Recent research commissioned by Property Week shows that while people are visiting stores less regularly, they are making more “destination-led” trips where they’re spending more in shops and splashing out on eating and drinking out. Food and beverage spending increased by 8.8% in 2018 to its highest level for five years, indicating that people are looking for experiential shopping experiences that go beyond the transactional act of purchasing commodities. Whilst adapting to this new customer behaviour could represent some challenges for retailers, it also provides a huge opportunity – particularly for an under-pressure marketplace where new and disruptive ideas are so urgently needed. Create a ‘phygital’ experiences To thrive in a volatile economic climate, retailers need to understand changing consumer behaviours and use that insight to create experiences which meet modern shoppers’ habits and demands. Creating engaging ‘phygital’ experiences – those that seamlessly blend the best of physical and digital worlds – is a good place to start. Digital technology isn’t the enemy – it can help businesses turn physical stores into acquisition channels, raising brand awareness and attracting new customers. Click-and-collect is one such strategy. Some 42% of European consumers used this type of service in 2017, and 24% of them made spontaneous in-store purchases while collecting. It’s a successful acquisition channel that more retailers should be taking advantage of. Capitalising on the growing trend in smart-home devices is another ‘phygital’ way of making shopping more convenient than ever. For example, Argos - whose store is represented by a catalogue – has become the first UK retailer to offer a voice-shopping service on Google’s Home speaker, enabling customers to quickly and easily search a range of 20,000 products, check availability, and arrange same-day collection. And the physical stores themselves can work harder to build brand loyalty among consumers by making the shopping experience more personalised, fun and engaging. For example, Lolli and Pops’ “Magic Makers” program uses AI-enhanced analytics to recognise opted-in loyalty members in real time as they enter a store. Employees can greet them by name, deliver a personalised experience, and make powerful product suggestions. Integrate back and front offices Given the pressure to reduce margins, retailers are increasingly looking to robots to automate labour-intensive processes. It’s no surprise then that we’ve seen the arrival of Spyce, a robotic kitchen that sautées hot meals in three minutes. In the kitchen of this Boston-based start-up, machines perform the routine work of cleaning, washing, and cooking. This allows staff to focus on hospitality – a great example of humans and machines coming together to create a better customer experience. Check Out Despite the challenges of 2018, the high-street is not going anywhere. But it is changing rapidly. The retailers that can respond quickly to the needs of their customers, delivering destination-led experiences which merge the physical and digital and put customer service first are best placed to succeed and thrive. As ever, adaptability is the key to survival and retailers should be open to embracing new thinking and experimenting with different formats. By Alastair Cole, who runs the creative technology team at Engine

How retailers can keep up with the pace of change

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