Our overview of some of the retailer buy outs, acquisitions and collapses, and how this is changing retailer shopping habits.

1st November 2018

Reports of retail’s death are greatly exaggerated

You may have read many a headline in the press shouting about the ‘retail apocalypse’.  It’s perhaps an understandable sentiment – after all, over the last few years we have seen a raft of familiar, well-known brands close or announce they are struggling.  

Notable casualties include Woolworths, BHS, Maplin, House of Fraser, Toys R Us and recently Coast.  It’s tempting to single out online shopping as the reason.  And whilst certainly, those brands who have not developed a viable online presence are at more risk, focusing on this aspect alone does not give the whole picture.

Many contributors to the problem

There are numerous factors that have contributed to the downfall of our big high street names.  Their profits have been squeezed due to rising overheads such as the National Living Wage and increasing business rates.  Some have been slow to respond to the changing tastes and trends of the consumer – certainly a visit to Woolworths didn’t vary much over the decades!   Many are overloaded with debt thanks to over-expansion and not acting to close underperforming stores quickly enough.  

It’s a heady mix of circumstances that, as we have seen, can bring down the most long-established and well-loved names.

It’s not all gloom and doom

Physical, in-store shopping is not dying. By far the largest percentage of spend is still in real shops. Research from Accenture shows that whilst online sales are soaring, stores still play a key role in the shopping experience.  To quantify that, information from the Office of National Statistics shows that in 2017, around £60m of sales were online, and over £300m in physical stores.

But physical shopping is evolving. What has changed is that shoppers are looking for a seamless journey that joins up the online and in-store experience.  Many retailers have focused on their online offering to the detriment of the physical experience.   So what’s the answer?  Certainly not pouring money into the stores to replicate shopping habits of a decade ago.  Retailers need to find a way that fuses the digital with bricks and mortar, delivering a seamless, connected shopping experience.

Stores need to give customers experiences

As the old-fashioned, debt-ridden chains close their doors and go bust, a new crop of stores emerges to capture the imagination of the shoppers.  Here’s a great example we found.  Casper, the ‘mattress in a box’ retailer, has launched The Dreamery in their New York store.  Pay $25 for a 45-minute nap in your own ‘Nook”, beverages and pyjamas.  What a great way to sell the experience of their product! 

So physical stores need to reinvent themselves to become the core of the product experience. Technology has a significant role to play in this transformation. Choosing strategic digital solutions can allow retailers to showcase vast ranges of products to the customer and, through understanding their behaviour by using data analysis, present them with what will interest them most. Interactive digital displays can allow retailers to mimic the use of an online store, giving advice, product alternatives and precise information, all customised to reflect their individual brand.  

To survive, brands must recognise that importance of owning a physical space that is digitally enhanced and strategically positioned to serve today’s connected shoppers.