James Doyan is the managing director of multichannel retail consultancy Athito
james doyan athito
Last week it was revealed that Asos is close to overtaking M&S in terms of market valuation, so the sands really are shifting and nobody is safe. The rise of the etailers, and the defense and response tactics of traditional retailers, is a debate that’s raged long and hard but this really is one of those era-defining moments where some business models are in need of serious challenge. The costs to truly compete are unimaginable – but are they inevitable?
We have seen so many examples of the new world ’sticking twos’ up at the old guard, and the bastions of our high streets attempting to respond through much lauded ‘strategies’ and ‘initiatives’ to cement their existence and to protect themselves from these new tech ‘whizkids’.
’It’s not just a retail revolution but a cultural revolution that is needed.’
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Being realistic, the pure-play model has a myriad of advantages and, despite being relatively new on the scene (Asos launched 17 years ago, Amazon in 1994), their impact and influence is far reaching. They have set the customer expectation benchmark, which the high street struggles to match, and the costs to run and maintain a store continue to cripple with no sign of any blue sky - thank you government and landlords.
Success online utilises technology to enthuse, speak to and influence the customer; it’s crucial to walk shoppers through your offer and be able to satisfy the immediacy of consumption that savvy shoppers are now becoming more and more accustomed to from the likes of Amazon and Argos, with their one-hour delivery options.
Winchester high street
Spending time hovering in stores and shopping centres, I see all too often customers (including myself) not able to buy due to a lack of availability. Having just completed the annual back-to-school shop for my kids’ uniform, a list of 11 items was unacceptably complete to the tune of just one after a department store visit. Lots of parents and kids were disgruntled at what they exclaimed should be a basic requirement given the time of year – this was brand damaging stuff. Out of interest I went online and found all 11 items available for next-day delivery. So online is backing up physical stores’ shortfalls – how sustainable is this?
The other interesting dynamic was that there were no staff to assist in my quest. On a bank of eight tills only one was staffed and I queued 15 minutes to pay for my one item in stock. It is becoming rare to find a great customer experience in stores nowadays and this is the one element where you would expect stores to focus to provide a point of difference with online. Retailers with a physical store presence need to get fully behind a strategy of exemplary shop floor service, which is fully-funded and bought into. We are supposed to be a nation of shopkeepers but underinvestment in training and ongoing support is really taking its toll. Retailers need to hire the best people, pay them a decent wage and teach them about the product and how to offer great service.
’Local retailers and communities - supported by the government and landlords - will need to work together to survive.’
Technology is on an unstoppable march and as tech-savvy youngsters start to age, we will become a nation of even-more tech hungry, responsive consumers who demand experiential immediacy. This is a tough challenge for the high street to absorb given the cost of running a network of stores and a competitive digital offer.
So what is the future? Behemoth shopping destinations presenting retail theatre to showcase product, peppered with great food offers and leisure. In more local areas, local people selling artisan, craft and curated offers targeted to local consumers and yes, the inevitable charity shops, coffee bars but fewer mobile phone retailers. You may consider this similar to where we are now, but things are going to become far more polarized. Local retailers and communities - supported by the government and landlords - will need to work together to survive. A localised offer needs to be provided, which could include retailers offering opening hours to suit local shoppers and active immersion in community social media to promote one another. It’s not just a retail revolution but a cultural revolution that is needed.
Digital and technology, and the way they influence our shopping habits, march on unabated. There will be much change ahead.