Over the last decade, the industry has faced a tumultuous period. The face of the once bustling High Street is changing. We’ve seen many well known brands disappear after struggling to keep up with changes in consumer spending patterns, online competition, the implementation of the National Living Wage and the Apprenticeship Levy.
Brexit is contributing to rising levels of uncertainty over future trading tariffs, the less than favourable exchange rates due to the weak pound, the rising import costs fuelling increased inflation and the dampening in consumer confidence.
Yet, don’t believe it’s all ‘doom and gloom’ in the retail sector. There are lessons to be learnt from the retailers who are rising to the challenge and winning.
What are the Key Trends Successful Retailers Share?
Smart retailers are embracing technology, linking their online platform to their in-store ‘experience’. Selfridges has invested millions in their flagship store expansion, whilst future-proofing their multichannel offer with the launch of a shoppable app.
Customer experience is key to retaining clients and driving footfall. Mobile POS technology, augmented reality linking advertising to store windows, facial recognition, digital mirrors and interactive changing rooms are all deepening customer engagement, cross-sell and most importantly, are making shoppers more likely to buy.
It’s those little extras too: with retailers offering everything from iPhone chargers, hydration stations, Fun Zones and free WiFi to community experiences such as Sweaty Betty’s exercise classes and in-store events.
Retailers are looking across the pond to gather insights from American customer experiences, with Boux Avenue replicating Victoria Secret store experiences for a UK audience.
Collaborations with TV and movies have seen profits soar for retailers. Superdrug has increased its share of the make-up market by 32% by sponsoring Love Island, whilst Missguided has seen a 40% increase in profits due to the product placement in the show. Interestingly, Missguided is one of the only ecommerce retailers who have taken their products from an online-only platform and into their own high street stores!
Product placement is a strong influencer, with developed technology now allowing for product placement in old shows. Advertisers can now not only sponsor series but buy storylines outright. Channel 4’s ‘Eat the Week with Iceland’ fueled an 8% rise for the frozen food company.
Celebrity endorsement still plays a key role in retail fashion: the ‘Meghan Markle effect’ is skyrocketing the sales for her outfit choices. Whilst some retailers can only hope to influence celebrities, retailers with cleverly targeted social media, powerful influencer marketing programmes and good press campaigns that identify with their consumer base are thriving.
Streamlined supply chains has seen Missguided establish one of the fastest supply chains in the fashion retail segment, providing a dynamic shopping experience for customers who want the latest trends instantly.
Sometimes all we hear is that it’s bad news for the High Street, especially with Brexit contributing to the downturn in consumer confidence – but there are retailers who are bucking the trend. Some have even benefitted from Brexit news, with Superdry seeing a lift in international trade and Primark being visited by foreign buyers who want to cash in on the weakened sterling value.
What are the common traits of the current successful retailers?
• Agility in an evolving marketplace and changing consumer behaviours
• Clever multichannel strategies
• Personalised customer experiences
• In-depth understanding of the target market
• Streamlined supply chains that cater to demand
Yes – mid-market retail is certainly struggling: profits are down at Debenhams; John Lewis is issuing profit warnings; we’ve seen the demise of Maplin and new store openings are at their lowest level in seven years.
Whilst identifying potential risks is beneficial, it’s also equally as important to recognise that things aren’t going wrong for everyone. The challenging market will clear the way for emerging niche and trendy retailers, like Lush, BouxAenue and Matchesfashion, to flourish.
But what happens when you’ve put all the right strategies in place and things still aren’t coming together? Sometimes you need an impartial evaluation to identify the opportunities and suppliers that contribute to business success and lower your retail expenses. We look at the requirements, evaluation and supplier selection parts of your business process to allow you to achieve operational efficiencies and cost reductions at the best value for you. We’ve worked with major retailers to manage costs and improve operations, and we can help you too!
Article by: Tracy Follows