Ecommerce is indeed on the rise and is expected to grow by 45 per cent in the next five years, but contrary to popular belief, this trend isn’t rendering the physical channel obsolete.
In fact, a recent report from the Office for National Statistics shows that online sales only make up 12.6 per cent of total retail sales in the UK. Furthermore, according to the Local Data Company, shop vacancy rates have fallen to their lowest levels since 2010.
These data points re-emphasise the important role that a high street presence continues to play for brands.
However, while the physical channel remains essential, its role in a customer’s purchase journey is undoubtedly evolving. Retailers must also adapt, to ensure that the shopping experience they provide resonates with consumers.
As the boundaries between the physical and virtual world continue to blur, customers expect a seamless cross-channel experience, so stores have become increasingly interconnected with other channels.
Silos within retailers are breaking down – the stand-alone “e-commerce” division is appearing increasingly anachronistic. Many retailers have launched cutting edge initiatives that have begun to redefine the role of traditional high street shops within the overall shopping experience.
For instance, EE recently introduced a new store format equipped with digital concierge service and tablet transaction capabilities. Similarly, Oasis plans to launch a new concept store, revamp its website, and launch click-and-collect in the coming months.
This pace of change introduces a multitude of tactics (e.g., sophisticated mobile apps, in-store technologies) for retailers to engage customers. Yet, these opportunities also create a great deal of uncertainty about which new programmes successfully drive profit across channels and which have unforeseen negative implications.
Executives may find themselves wondering: Do new digital store displays drive enough incremental sales to pay off? Will enabling in-store beacon technologies increase customer engagement or drive some customers away? How should inventory be optimally allocated across channels? If we close some existing locations, how much of the lost sales will be recouped in other channels?
These questions are extremely challenging to answer without a robust analytic process.
Find out how retailers can succeed as the retail environment keeps evolving – read on…
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