Two stalwarts of British retail last week announced that they were entering administration.
No doubt this will be recognised as a devastating blow for high street chains.
Toys R Us, once known for its exciting, out-of-town warehouse stores which held every toy you could imagine, found that this formerly game-changing strategy had actually become the crux of its downfall, as it failed to respond to a more agile ecommerce landscape.
Maplin, meanwhile, has been more significantly impacted by the slowdown in consumer spending and the growing cost of imports.
Although it has been a dark time for UK retail, there are important lessons that businesses can learn, not just from those who have lost, but more importantly from the retailers that are out there adapting to change and growing as a result.
Re-engineering the concept of the high street is key to the future, not replacing it. Today’s smart retailer is engaging in a new era of shopping experience, combining the human touch and technology to deliver a more tailored consumer experience.
The “Amazon effect” has been blamed for its impact on both Toys R Us and Maplin, as well as the high street in general. However, if we take a look back at 2017, bricks and mortar sales actually grew by 2.3 per cent. Let’s not forget that in January Amazon even opened its own physical store.
The fact is that both physical stores and ecommerce via web and mobile play a vital role in creating the successful customer experience. Consumer confidence might be at a low point, but there is still spending taking place.
Leveraging technology across multiple channels – online, on mobile and in-store – allows retailers to obtain a better understanding of customer triggers with data and additional insights. These include getting a sense of the path to purchase and sensitivity to fluctuations in pricing or changes in display.
Possessing an innate understanding of consumers and making use of relevant data across the multitude of digital channels is essential to delivering a personalised customer approach.
At the heart of retailers’ ability to remain competitive and minimise supply chain costs will be their capacity to embrace emerging technologies, such as cloud-based artificial intelligence (AI) and the internet of things. These tools allow businesses to achieve new levels of intelligence, primarily thanks to the ability to make more informed decisions.
AI has a somewhat controversial reputation. Most headlines about AI over the past year have focused on distrust and the preconceived idea that the technology will somehow result in a universe ruled by robots.
Applied in retail, however, AI is already a critical part of the decision-making and customer journey mapping processes – from the rise in customer service chatbots, to automation of supply chain management.
An overhaul in the level of in-store service itself will be the culmination of these advancements. It’s really now only a matter of time until we start to see technological revolutions in retail delivering the best customer experience uniformly across all devices.
Wouldn’t it be wonderful if, instead of adverts following you around the internet after you’ve made a purchase or even just looked at something once, you walked into a shop to easily be guided to just the thing to complement your latest purchase?
So are these recent events on the high street the beginning of the end? No. While it is certainly a sad time for those involved, it is a stark reminder that businesses must adapt to survive and ensure that they are harnessing the right technology to understand the consumer and keep them at the heart of their business.
The high street of the future is an exciting and vibrant place; I look forward to seeing you there.