Every day brings fresh headlines with regards to the challenges facing the high street. Where lies the opportunity in physical stores?I don’t think that physical stores are going to disappear. The high street is definitely not dead, nor is it dying. There has been a lot of noise lately, but actually I would say that we are going through a ‘realignment’. The challenges are partly down to a change in the retail landscape and declining market share. Businesses have also been slower to react to changes in customer requirements, similar to when e-commerce really started kicking in, and a number of players were arguably too slow to react. Not having the right overall customer value proposition or product are also a couple of factors. This said, traditional ‘bricks and mortar’ environments need to change:
They need to be more experiential to challenge mobile apps/websites – why would a consumer leave the comfort of their home and make time and effort to go into a store? For this to happen there needs to be something else that is part of the experience.
Leverage digital technology - consumers do not have the time to shop in store to find an item and then queue up to pay for it!
Undoubtedly, as more businesses go ‘online’, some retailers are top heavy with the number of stores they have and need to rationalise: they don’t need the same size store portfolio. However, there is also a direct correlation between online activity and physical stores. Usually, when a retailer has a store, it has a positive impact on the online sales in that area. So when retailers are thinking about closing stores, they also need to think about how this will impact online sales - and how do you then direct them to ensure they go online? How do you make sure closing that store does not impact the online performance? Is closing that specific store the right thing to do? There are lots of decisions to make and lots of implications.Who would you cite as businesses that are ‘really getting it right’ – as in truly successful multichannel retailers - and why? Who is getting the balance between physical stores and online presence right? I would say my previous company - Ted Baker. (Arguably, there are very few businesses that could point to the fact that they have had positive growth over the last how many quarters!). Ted Baker’s advantage is that they are not over exposed in terms of store portfolio compared to other retailers. They have a good balance between their number of stores and their online business. Also, their product works!Interestingly, Ted Baker had never done any advertising previously – (Martin was the first person to do any advertising when he joined. Rather, Ted Baker would use the windows themselves to attract consumers and therefore, had the best window displays).They are commercially astute, never over-extended themselves and have grown the business in a very controlled fashion. This controlled growth and customer-centric approach has allowed them to maintain their success (i.e. they have very good service in store and their store staff are trained extremely well). Retailers need to look harder and think what makes others successful.I predict that AO.com will also be one of these brands, from a customer perspective. It is about putting the customer at the heart of everything you do. AO.com do many small things that work really well – for example, from a cultural point of view, the founder, John Roberts, would spend 40 minutes a day writing letters to customers. They have 1.8 million people liking them on Facebook and 40% monthly engagement on their social media channels. There are much bigger businesses that do not have nearly the same level of engagement as them.If you are not engaging with customers and going beyond the transaction, then you can’t expect any loyalty or lifetime value. For traditional retailers, this is a good chance to look at value propositions and their relevance.A client of ours recently commented that many of our high street brands not in the fashion arena could learn a lot in terms of digital customer loyalty from fashion brands. What is your view on this? This depends on the definition of loyalty: loyalty is more than just a rewards programme. Most retailers don’t offer rewards of any real description. They do drive frequency to some degree (i.e. Boots and Tesco Club Card), so there are the mechanics there, but retailers need to offer a lot more than that, as this is just transacting. You need to look at how you become a service provider and provide services that go over and above just transacting. Look at John Lewis, giving over a chunk of their store to services. They also have a ‘search function’ for looking for accredited workmen and other third parties to engage with on their website. These are examples of how they are looking at other ways of extending customer lifetime value and ways of becoming more relevant and important to customers. How do you add value through content? How do you make it easier for people with repeat orders, for example?Loyalty means lots of different things and I don’t know that fashion brands are any better at that than anyone else. The client could be referring to marketing communication - although even from an email communication/CRM perspective, this is normally not personalised or segmented or based on customers likes etc. It is still all about transacting. 99% of consumer-facing businesses are way behind with what loyalty means and how to engender a true sense of loyalty amongst their core segments of customers.From a search perspective, a lot of consumer-facing businesses are starting to look at talent from other sectors and vice versa. What is your view on how transferable skills are from outside of the retail sector?Great question! Skills are very transferable and retailers are generally a bit more hard-nosed and a bit more commercial than a lot of other sectors. So retailers going into other businesses bring a greater degree of commerciality and sense of urgency and pace. Other consumer sectors are more data orientated. Look at the gaming sector, for example, …bringing someone like that into a retail environment where there is lots of data but not a lot of insight would be a compelling proposition as they would bring the ability to interpret the data and tell you what you can do about it and what it tells you about the business. Lots of skills are transferable and it is quite refreshing to look outside of your core sector for talent, providing you’re clear on what it is you’re looking for and where your gaps are. You want to look at disruptive brands first of all: who are the disruptors in your sector? This would be your starting point, as they have recognised how to do things differently, better and more effectively and come up with a new business model that really engages customers.For further details and pre-order of MARTIN'S NEW BOOK THAT COMES OUT ON THE 3RD AUGUST, please click the link below:https://www.koganpage.com/product/100-practical-ways-to-improve-customer-experience-9780749482671