The future of high street retail has been in question for some time now, and the impact of COVID-19 is hastening its demise. Post-pandemic, its survival could depend on retailers delivering a blend of physical and digital experiences to keep customers coming through their doors.
Demise of the high street
With non-essential stores closed, and many people either unable or willing to leave their homes during 2020, footfall on the UK’s high streets was down by more than 43 percent on the previous year. At the same time, spending online was almost 35 percent up, accounting for more than 30 percent of total retail sales.
Even before the pandemic, a combination of increased digitization, falling footfall, and rising costs had hit physical retailers hard. Big names including Karen Millen, Mothercare, and Toys”R”Us had already vanished from the high street. And more are set to follow. Just recently, online fast-fashion retailer Boohoo bought the online businesses of high street staples Debenhams, Dorothy Perkins, and Burton. Importantly, their hundreds of physical stores and thousands of employees were not included in the purchase.
E-commerce meanwhile has been evolving the customer experience away from just products available on a website – the best online sellers curate their selection, present it with a lot of detail and great photography, often providing articles and commentary on broader topics. They also engage their customers and sell on social media engagement, provide live chat and host events, even offering the ability to try on clothes, jewellery and watches virtually! They have managed to take the best (and most fun!) bits of the in-store shopping experience and improve it online. As shop doors open once again, physical retailers are learning how to bring the best bits of the online experience in-store to compete with their e-commerce counterparts.
Health and safety concerns
One of the most important things for physical retailers to consider is just how much consumers’ attitudes to shopping have changed as a result of the pandemic. Social distancing is now the norm, and concerns around spreading the virus have made people wary of handling physical items.
According to McKinsey, fears around the transmission of COVID-19 have seen global cash payments over the last 12 months fall at around four or five times the annual rate of decrease of the past few years. While cash is likely to remain in use for some time yet, retailers should offer safety-conscious customers a greater choice of contactless payment options, such as card and mobile wallet.
This increased concern around personal protection has seen a rise in the use of click-and-collect services. Although they’ve steadied since, the first month of lockdown saw demand for these services grow threefold. With a quarter of shoppers expressing a preference for click-and-collect over home delivery, it’s clearly a desirable addition to any retailer’s offering. But retailers could also use this functionality to take a deposit to reserve items in-store, allowing a customer to visit when it is convenient for them and know it won’t be out of stock.
And going further than that – consumers are now used to booking time slots online, video calls and online appointments; physical retailers can use that to get people safely into their stores, either at a time that suits them when the store is quiet, or even virtually for “video tours” of the products on sale.
The biggest thing that may come out of this pandemic for the high street, is the resurgence in the desire to support our local communities and small businesses. Most of us have got used to staying in our local areas, and we want to support our local business communities.
Small businesses are forming Facebook groups to create local communities, and working harder to understand their customers – who are the most loyal, where they travel from, what they need – and using that data to focus their marketing efforts. Consumers are also making more effort to buy local – emailing or phoning ahead, or buying over the phone, so that they can collect something from a local store on their daily walk.
Implementing and communicating these solutions requires retailers to have an online presence. After all, it’s hard for a store to replicate its e-commerce competitors if it’s not playing on the same field. But COVID-19 has forced many physical retailers to make this jump online, where previously they may have hesitated or not seen the need, with more retailers engaging much more actively in online marketing and social media to reach their customers. The huge jump in business through Shopify, and the launch of Instagram shops shows how quickly physical retail is going online.
The fact is, COVID-19 has changed the face of retail. High streets, already suffering due to rent increases and the increasing advance of e-commerce, have been largely shuttered for months. If brick-and-mortar stores are to thrive, let alone survive, they must take inspiration from online retailers as they adapt to the new normal.
by Jonathan Hughes
Originally posted on the Bdaily news