Crossing the Digital Divide: The Journey for High Street Retailers
Gill Holloway, Sales Director, Insight UK
The relationship between retailers and customers has changed irrevocably. Life used to be simple, customers wanted good customer service, a decent look at the products on sale and a relatively pain free transaction. On the flip side, retailers would measure by footfall and the number of items per transaction.
However, the personalised experience online retailers are able to bring has put traditional retailers to the test. The data ecommerce sites have access to – products viewed, time spent browsing, devices used – has opened up new understandings of shopping behaviours. In turn, this has enabled them to deliver the convenient, interactive and personal experiences consumers have now come to expect. It’s (in part) because of this that online sales grew by 15 per cent last year, at a time when some of the longstanding hallmarks of the great British High Street are struggling.
The need for retailers to embark on their own digital transformation has never been more prevalent, but how do they address the digital divide?
At the heart of the digital divide between online retailers and bricks and mortar stores is data. Online natives have been born into a world where they’re able to know exactly who their audience is, how they behave on their website and even how they browse between competitors. High street retailers simply don’t have access to that level of detail. In recent years there has been some experimentation with beacon technology as a way of tracking in-store behaviours and adding extra benefits. However, while sending push notifications to customers may appeal to some, there’s no easy way to explain how the data is being used to privacy conscious shoppers.
What’s more, the likes of Amazon have made shopping online so slick, consumers are opting for convenience over visits in-store. One key differentiator is delivery. According to recent data from IMRG, in August 2016 the percentage of orders using ‘next day’ (36.7 per cent) as the fulfilment option was higher than those using ‘economy’ (33.8 per cent). The immediacy of the online environment means items can be purchased within a few clicks has offered a convenience that physical stores are finding it difficult to match.
A new hope for the Great British High Street
It sounds all doom and gloom for high street stores, but actually, they have an incredible opportunity to reinvent themselves.
First physical stores have huge potential that online could never have; the ability to allow customers to touch, feel and experience what they’re buying. While not all can champion sensory marketing in the same way as cosmetic retailer Lush, we’ve seen more and more online natives open up high street stores in order to give customers the opportunity to interact with what they see online. With the likes of Nissan, Dyson and MADE.com opening physical stores, online retailers have signalled the importance of having a physical touchpoint with customers. That said, retailers who can create multi-channel experiences by seamlessly linking online and offline will be best positioned to capitalise on the new, digitally driven path to purchase.
How do we get there?
Digital transformation is a journey, and traditional retailers are not going to get there overnight. With legacy systems and tight margins to tackle, such radical change is daunting.
What retailers need from the outset is the right partners to work with who understand their specific business challenges, and can help them set out achievable objectives. Budgets are tight, but a quick fix can be more costly than investing in a long term plan that prioritises getting the foundations right, before bringing a solution to customers.
At Insight we’re able to connect retailers to the partners that can support them on their unique digital journeys, helping them gain the insights they need to keep the lights on now, and in the future.