Guest Post: Why Online Integration Is The Future Of Retail



online retail shoppingA recent study from the Centre for Retail Research (CRR) says that one fifth of retail stores in the UK could close within five years. While this highlights the current plight of Britain’s high street, the situation is not as bleak as it appears, there is light at the end of the tunnel.

The figures may not paint a good picture. The Retail Forecast for 2018, predicts that, at the existing rate, the number of UK retail stores will fall to 220,000. With a current amount of 281,930 stores, a loss of over 60,00 stores could coincide with a loss of over 300,000 jobs.

These figures however, are based on the current trends. The UK retail sector is going through its most testing time for many years, the combination of a poor financial climate and the growth of e-commerce has killed off many high street favourites.

Pessimists will blame online shopping for the demise of Woolworths, Jessops and Comet among many others. This attitude however, is a short-sighted way of passing the blame. Rather than fight the unstoppable online tide, retailers need to ride along with it.

To get a good idea of what the high street offers, we need to look at what has replaced the household names. In 2012 we saw in increase in betting shops and grocery stores, along with an invasion of payday loan stores. While these shops are seen as unsightly, they are all available online. If internet has killed off our high street, why are these businesses moving in the opposite direction?

Physical stores offer a more effective service and a more tangible product. Many of us have been doing our grocery shopping online for years, but for some, being able to hold the product in their hands is still important.

In many sectors, this service and tangibility has fuelled the modern practice of showrooming. We’re all guilty of it, trying a product in a store, then buying it online for much cheaper. Electronics, CDs and computer games have been the main victims of this, Woolworths, Jessops and Comet spring to mind again, along with Gamestation, Game and HMV.

Rather than admit defeat though, retailers need to embrace the madness. They have to renew their marketing strategy to reflect the changing way we shop. Firstly, physical stores need to be fully integrated with websites and social media.

This is where John Lewis has led the pack. Instead of viewing shops and the website as two separate entities, they see them as integral parts of the same marketing plan. The shops are expected to drive sales to the website and store managers are credited for online sales in their area.

By 2018, John Lewis will have opened its 100,000 square foot flexible format store in Oxford. This pioneering outlet will stock the usual in-store goods , but with computer terminals allowing shoppers to browse the wider John Lewis range. With options for home delivery or next day collection at the shop, it will help bring the advantages to online and offline into one package.

Secondly, this integration may have to work alongside an extensive interior fit out. If a store is designed to drive online traffic, it needs make the most of its key strengths. Online integration will allow for less stock to be required on site, which should free up room for enhanced customer service and experience.

One curious example could be HMV. Following the buyout by restructuring specialists Hilco, they closed around half of their UK stores. Smaller, more remote, outlets were axed in favour of the larger branches in metropolitan areas.

This could indicate that they will start to use their stores for promotional activity rather than sales. The upcoming relaunch of the brand and announcement of a digital streaming platform adequately support this theory.

Multi-channel trading seems to be the future of retail. John Lewis is showing the way, HMV is following, and it can be replicated by businesses both large and small. While a small business cannot be as sophisticated as John Lewis’ new store, they can offer a level of service more personal and bespoke. By combining this with an effective online strategy, they can help see the end of 2018.

Image credit: r. nial bradshaw via flickr




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