It seems like another day goes by and another High Street stalwart announces store closures or releases disappointing sales results.
Yesterday, Debenhams issued its third profit warning this year, despite implementing a plan to cut costs and boost sales. It’s a story we have seen repeating itself on the news cycle of late.
In the last month alone: House of Fraser hit the headlines after it was announced that they plan to close more than half of their stores, including their Oxford Street branch, after a plunge in profits last year; Marks & Spencer announced the closure of some 100 stores by 2022 as part of a radical shake up of the business, designed to address falling sales and profits; Dixons Carphone announced that 92 of their standalone stores would be closing their doors; Homebase was sold for £1 after a particularly challenging 6 months for their now-former owners; Poundworld announced it was going into administration and would close its stores if a buyer could not be found; and homewares retailer Dunelm issued a profit warning.
No one is safe; household name brands who have been a staple on the British High Street for generations are falling victim to the perfect storm that is engulfing traditional bricks and mortar retailers. We have seen the likes of Toys R Us, Maplin, BHS and Brantano close their doors, with an abundance of others announcing store closures to try and stay afloat. Mothercare, New Look, Topshop, Moss Bross and Carpetright have all either issued profit warnings or announced plans to close stores. Even the usually-booming restaurant trade has not been immune to the death knell with Jamie’s Italian, Prezzo, Carluccio’s and Byron Burger all closing locations nationwide.
This current downturn looks set to continue with many other retailers posting weaker sales performance and increased costs and weak consumer spending hitting businesses hard. The retail industry appears to be undergoing a fundamental change, with an apparent shift from consumers away from bricks and mortar retailers towards online. How will these developments affect the retail and consumer industries? How can marketers help these brands to adapt and survive in a drastically different landscape to the one they are used to?
E-commerce: The Future of Retail?
It will come as no surprise to anyone in the consumer industry that consumers’ changing spending habits have had a direct impact on the footfall on the British High Street. With ecommerce sales rising year on year and being predicted to increase even further and with more retailers understanding the importance of having a mobile-friendly e-commerce site, m-commerce is set to take an even larger proportion of all online sales.
Online retailers such as ASOS, Missguided, Boohoo, Pretty Little Thing, Net-a-Porter, Ocado and Gymshark have capitalised on this movement and have seen incredible success in recent years, far surpassing the performance of many traditional retailers, with many reporting sales increases of over 75% year on year. These online brands have proven themselves to be far more versatile than their High Street counterparts; many of whom are still sticking to the old way of doing things and failing to realise that in order to survive in this competitive landscape, they must adapt to changing times. Without the overhead costs associated with running bricks and mortar stores, these brands can invest in securing quicker production times for their new collections, running high profile marketing and advertising campaigns and working with key influencers across social media platforms, from Instagram to YouTube. Online retailers can focus on being reactive and innovative in their marketing approach, something we don’t associate with High Street retailers anymore.
Missguided, for instance, regularly collaborate with other brands, celebrities and social media influencers on limited edition collections that quickly sell out and have most recently joined forces with Love Island, probably the biggest cultural phenomenon of the millennial generation, to style the contestants in the villa. With the opening episode drawing in over 3.4 million viewers and the contestants all wearing Missguided, this has been quite the coup and a savvy marketing move for the brand.
Gymshark is another brand who has tapped into the social media-centric millennial generation, understanding how best to target them with a strategic influencer marketing strategy. Noticing the rising popularity of gym selfies, the #strongnotskinny movement and increasing number of fitness influencers and trainers gaining cult followings online, Gymshark have carefully selected fitness fanatics with sizeable followings to act as Brand Ambassadors. These influencers proudly wear their Gymshark workout attire in their Instagram posts and YouTube videos, providing them with exposure to hundreds of thousands of consumers.
The convenience of e-commerce cannot be overstated either. The vast majority of online retailers offer a next day delivery service, often free when you spend over a certain threshold, which is something many traditional retailers still haven’t introduced themselves. Why bother driving into town, paying to park in an overpriced, tight multi-storey car park, battling through crowds and traipsing around various shops to find what you’re looking for, when you can do it all from the comfort of your own home and have your items delivered to your door – or office desk – the very next day? The girls here at the Brand office are certainly fond of online ordering, but I’m not too sure the postman is as fond of delivering our purchases now our office is up two flights of stairs!
High Street retailers could do with learning some lessons from their ecommerce rivals and adapting and implementing their successful strategies for their own business model. Many retailers who are currently struggling – M&S, Debenhams, Next – are still enjoying rising online sales, but at the expense of decreasing footfall in their stores.
The Great British High Street 2.0
So, what does this mean for the traditional British High Street? Will our city centres resemble ghost towns, with boarded up windows, faded clearance signs and tumbleweeds floating past? Will traditional bricks and mortar retailers be all-but wiped out by the unrelenting force that is online shopping?
Amongst all the doom and gloom, there have been some brands who have been getting it right; striking the balance between having a successful digital strategy and enticing customers into their stores. What lessons can marketers learn from these brands to ensure their company doesn’t become another casualty of the High Street?
Introducing a well thought out and creative omnichannel marketing strategy is something that High Street retailers need to be implementing in their business. Brands that are weathering the current storm more successfully than their imperilled rivals have all implemented a cohesive and innovative omnichannel marketing strategy into their business model, and the results speak for themselves.
Creating an experience that brings together the online and offline elements of their brand helps to enhance the shopping experience for consumers and makes them more likely to shop in store, as well as online. Many stores now provide their staff with mobile devices and tablets, so that they can bridge the gap between their e-commerce site and physical presence in store. If items customers have seen online are out of stock in their size or not available at that particular store, staff can easily track these down for them in a nearby location or order it in for them. Here in the Consumer Team at Brand, we have seen an increase in demand from our clients for candidates with a background in omnichannel marketing, as many of them are beginning to recognise that this is the way forward if they are going to salvage their brand.
The brands that are still performing well in these tough and uncertain times for retailers are not just lucky; they understand their consumer and have built a strong business proposition and marketing strategy around them. Zara, Ted Baker, Lush, Hotel Chocolat and Smyths – to name a few – all continue to post strong sales performance and get customers through their doors. All of these brands have developed a strong omnichannel approach, have a strong brand and proposition and offer exceptional service from their staff in stores. It’s no coincidence that many of these brands are regularly voted as some of the best places to shop on the High Street, with their friendly and knowledgeable staff topping the list when it comes to service.
Brands need to offer a point of differentiation to the consumer, something that makes them stand out from their competition; when they try to appeal to everyone they ultimately appeal to no one. If these retailers want to stand out in a competitive marketplace they need to listen to marketers, who can help them to develop a strong brand proposition, understand their target consumer and develop an innovative omnichannel marketing approach. Some of their strategies might seem radical, expensive or scary, but that is precisely what these brands need so that they don’t just survive, but thrive.
Check out the retail marketing jobs we are currently working on.
Join our mailing list to ensure you always keep up-to-date with our latest articles.