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Exclusive: Online not stealing bricks-and-mortar spend

Almost two-thirds of consumer spending lost from bricks-and-mortar fashion retailers has left the market completely – rather than moving online, new data has revealed.  

Kantar reports that 62.2% of spending lost since April 2016 has been lost from the sector altogether. And despite industry fears about ecommerce stealing market share, only 35.1% of spend moved to multichannel retailers’ online offering. Just 2.7% of spend was funnelled from stores to pure online players such as Boohoo and Asos. 

“Many commentators argue that high street brands are suffering as a result of the ecommerce market. However, it looks as though retailers are at least partly to blame for shoppers’ disaffection with the sector,” said Glen Tooke, consumer insight director at Kantar.

Instead, continued deep discounting across the industry is largely to blame, explained Tooke. 

“Higher levels of discounting used to encourage customers to visit shops more frequently and buy more items per trip, but we are now experiencing a near reversal of this trend,” he told Drapers. “Ten years ago, discounting was used to excite shoppers – offering them a bargain while helping stores to shift the last few items at the end of a season. Now it has become part of a retailer’s daily arsenal, an integral part of their sales strategy.”

When Kantar asked shoppers if they were excited about promotions, more than half disagreed. Consumers no longer trust full-price offerings and instead delay their spend for an inevitable Sale, said Tooke: “Customers are now so accustomed to seeing clothes on discount that they no longer value – or trust – when these products are at full price. This not only undermines why retailers discount, but also makes shoppers rightly question whether an item’s quality is justified by the full price – the discounted price has become the ‘right’ price.”

To break the discounting cycle, the industry has to move together to make a concerted move away from discounting, he warned: “One retailer switching to a more rigorous system isn’t enough.  The approach must be taken collectively by the industry in an attempt to reverse the fortunes of the total fashion market.”   

Tooke suggested that to survive, retailers must stop marketing to such a segmented customer profile. 

He said: “Retailers need to understand that everyone shops everywhere now, so the mindset of a branded customer doesn’t exist. The first step is to stop putting customers into brackets of ’value customer’ or ‘branded customer’ – £1 is as good as any other £1, and retailers need to stop discounting half of the population because they don’t want to market to them.”

However, when it comes to experiential retail, differentiation is key. 

“Retailers need to appreciate that it is the consumers who are dictating to them. Those who are responding to consumers are better set to create in-store experiences,” said Tooke. 

“It’s important to innovate and not replicate,” he added. ”Last year, there was a focus on in-store coffee shops and, for some retailers, those are going to be key footfall drivers, but that doesn’t mean to say that every customer base is going to want that. It’s important to look at what your competitors are doing but, more importantly, what your customers would like, rather than deciding what the blue-sky thinking is.”

Readers' comments (2)

  • Beyond discounting, the drive for self service is also to blame. Self service for grocery shopping works. For fashion, customers visit stores for service, to check quality and normally to buy something.

    Online IS ‘self service’ with more choice than stores. Often with free delivery and returns. There needs to be reason to visit fashion stores and self service is not the answer.

    Product relevant to the season for that matter too.

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  • darren hoggett

    Convenience is the key factor, especially for the sub 30 age group. Speak to them and many find it bizarre that somebody would actually make the effort to go to a physical store, when you can sit in your own chair and order via you phone or laptop. That philosophy is not going to change, especially as it has arguably been made too easy.

    However, the discounting of the last decade is largely due to poor management that had and still have a lack of confidence in the brand and/or stores. This attitude has accelerated the lack of significance of the physical store and there seems no way back.

    If the right product is sold at the right price in the right environment, it will sell. No need to discount, but this has fell on deaf corporate ears for too long, as the industry became all about 'numbers' combined with a complete lack of common sense.

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