Simon Hathaway, managing director at Outform EMEA
The high street is dead. Long live the high street.
Every couple of months, there’s another story proclaiming that the time is nigh for physical stores – a recent report actually revealed that Britain’s high street lost more than 2,400 shops last year. Yet, new store openings are seen to drive up web traffic by as much as 64% and online sales have been shown to be up to an extraordinary 110% inside catchment areas of physical stores. Is it any surprise that online retailers (most recently Notonthehighstreet), are more frequently opening bricks and mortar pop-ups to drive brand awareness?
These moves show us that the high street isn’t failing, poor retail experience is and we are seeing an evolution in the definition of a physical store and how it must meet customer expectations that are being reset with every visit, click and update.
What does the point of experience mentality mean for independent retailers?
Over the course of the past two months alone, we’ve seen Selfridges launch the world’s first permanent department store cinema; John Lewis & Partners has unveiled an experience playground in Southampton; and HMV has chosen Birmingham as its location to open Europe’s biggest entertainment store.
These launches signal a change in approach to how larger retailers are measuring the success of their physical stores. For decades, these physical locations have been judged solely on the basis of whether or not they sell products in store. Whereas now, in our omni-channel world, they’re being judged by whether or not they can become brand-building, ‘destination’ locations for shoppers.
This is all very well for the bigger players, but what does this shift mean for independent retailers? These stores are unlikely to have the budget or inclination to install in-house cinemas, or ‘experience playgrounds’ – so what strategies can they use to become destination locations?
With one in five small retailers at risk of closure, unless they perform at Christmas, the answer to this question has never been more important.
The three types of budget
All shoppers have three types of budget: money, time and frustration. E-commerce giants like Amazon offer costs and convenience which independent retailers may never be able to compete with, but there is a real opportunity in ‘time’ if they can redefine value and experience.
How? By putting the shopper at the heart of the journey.
Sigma Sports, saw the opportunity in e-commerce and, like Matches Fashion, went from a few stores to a global business. Their remaining stores are now destinations, the Sigma still in Hampton Wick is a store where the keen cyclist can spend hours admiring the #bikeporn, whilst Matches townhouse has an event and studio space, where it creates content for its growing social following.
Of course, some might argue that these players are no longer ‘independent’ as the owner/manager is no longer likely to be meeting customers on the shop floor every day. And arguably it is these kinds of stores that have the bigger opportunity for a personalised experience.
Personalisation is key
For instance, independent off-license House of Cans has differentiated itself from the larger retailers by offering visitors a carefully curated and innovative display of canned drinks – this also includes one-off partnerships with artists, illustrators, designers and drinks producers. Similarly, Department of Coffee and Social Affairs is an example of a small chain that has managed to retain the personalisation piece in its stores through offering ‘Coffee Schools’, and introducing other engagement strategies.
These are examples of retailers offering a level of specialisation and personalisation that larger chains and stores will struggle to replicate. It shows how ultimately, independent retailers can transform their stores into destination locations by embracing the core of their appeal.
If independent stores want to become points of experience, as well as points of sale, then they need to understand why people are visiting in the first place. They can then leverage this by introducing strategies that further champion their USP, and give these shoppers reasons to visit the store time and time again.