The great and the good of British retail gathered last week at Retail Week Live and I went along to hear how the industry leaders are responding to the well-publicised challenges facing the sector.
Five main themes emerged, and the biggest surprise was how consistently these areas were mentioned during the two days.
The rise of Mobile
Or more accurately, the rise of the smartphone. Over a third of the population now own a smartphone, and pretty much every retailer spoke about the measurable impact they are having on their business. And it is the pace of this change that seems to have got everybody talking. From a standing start not much more than two years ago, ASDA’s CEO Andy Clarke said a 5th of all online orders now come through mobile. And similar mobile penetrations of online sales were quoted by other retailers too.
Everyone is talking Omni-channel
It used to be bricks & clicks, then multi-channel, and now it’s all about omni-channel. The buzzword may change, but the challenge is the same – giving customers a consistent and frictionless experience in whatever channel they want to transact in. Mobiles give consumers instant access to reviews, price comparisons, and the choice to access products when and where they want them. As a result retailers need to work out how to engage and serve their customers in new and meaningful ways, across a broad range of touch points.
The future of convenient shopping: click and collect
One of the success stories for retailers has been the trial of click and collect services. Argos boss John Walden believes collect in store will be bigger than home delivery by 2015, and account for 20% of all sales. John Lewis also expect a third of their online sales to be click and collect in two years’ time. Andy Clarke reported that 5% of ASDA’s online orders are already click and collect, and later this year they will roll this model out to dedicated pick-up points, making use of cheaper retail estate, such as petrol stations and garage forecourts. He coined the phrase “convenient shopping, rather than convenience shopping” which I heard repeated in the coffee breaks throughout the day.
Changing face of retail spaces
One of the more long term structural trends in retail is how changing shopping habits are impacting the use of retail estate. Empty shops on the high street and the over-supply of out of town supermarkets – this is a problem for retailers large and small.
We’re going to see retail and leisure activities merge over the next few years. Look for coffee shop and restaurant franchises taking space in the large supermarkets, and entertainment offerings such as laser-zones and health spas taking empty spaces in the malls.
Stores will also change. The advent of the “guide store” concept will grow. These are stores where the emphasis is on allowing consumers to interact with products in an environment that provides less sales pressure, and more assisted discovery of what is on offer. The integration of digital, and the benefits of home delivery or click and collect, means less store space is needed for holding stock, and more space will be given to creating a better branded customer experience. Engagement and personalisation are important aspects of this, and we will see a growth in personal shopping experiences and tailored offers.
From shop assistant to personal guide
To man the stores of the futures, service culture has to adapt. Shop assistants are going to have to learn new service skills, to become guides, advisors, and personal shoppers. Customers coming to stores have often done their homework, and know as much about the relative features and benefits of the products on sale as the store staff. If they just wanted to make a purchase they’d go online. By coming to the store they automatically expect a higher level of personal service; they may be looking for tailored recommendations, based on their own individual needs.
Studies show that consumers who have received assistance in store spend up to 30% more. In an age where a similar product may only be a click and collect away, personal service and a sense of having received a “premium” experience may be the difference between getting the sale or the customer walking away.
A “Stressciting” few years ahead
As Mary Portas summarised, it’s impossible to predict exactly what the face of retail will look like five years from now, and it is clear that the challenges facing the industry are huge, and the stresses for bosses in the sector remain high. But it is also a very exciting time.
The convergence of technology and traditional shopkeeping values is an interesting one. Because power is, quite literally, in the hands of the consumer, it is focussing retailers back on to the core values of serving customers, and competing on service not just price.