Retail's Survival of the Fittest

New Business & Marketing Manager

Matt Tilling

New Business & Marketing Manager

Posted: 31 August 2016

In January things were looking up for high street retailers as sales rose by nearly 3%. Fast forward to April and a familiar pattern emerges. Recent figures from BDO suggest brick and mortar sales fell 6.1% in April. Couple this with the demise of big name stores such as BHS and Austin Reed and an ominous picture materialises for high street retailers.

Online sales, meanwhile, rose nearly 9% in April this year alone.

Erratic high street retail figures alongside steady online sales growth is yet more evidence that the line between online and offline retail is blurring. An engaging and consistent experience across both lies at the heart of modern, customer-centric retailing. Those retailers who have maintained steady growth in this period have sought to blend both online and offline worlds and, though truly omnichannel retailing is yet to exist, some are beginning to get close.

Starbucks, for example, has been at the forefront of blending online and offline experiences since 2009 with the release of its mobile payment app. Since then the app has evolved to the point where 11% of all transactions are made via the app with 11million users worldwide. Sure enough, Starbucks’ sales figures in the UK have remained steady in times of recession and some negative PR for the brand around corporation tax and, while I'm not suggesting this is solely down to having an app, this is certainly a bi-product of evolving with the customer.

The Starbucks app has long been seen as the best example of bridging the omnichannel divide within the retail sector.

So what’s stopping UK retailers reaching omnichannel nirvana? There are two key issues, both of which will be familiar to those working with data in the retail sector.

The first is simply a lack of interactional data. BHS suffered from this issue: how do you collect data from a core demographic that is less tech-savvy and more high street-inclined? One solution is e-receipts. Many high street brands, such as Mothercare and Topshop, have begun offering e-receipts at the till.

To an extent this solves the problem of collecting data offline, but it’s how this data is blended with other data sets that presents the second issue: integration. An e-receipt gives retailers information on what was bought, where, and crucially by whom, but unless this information is aligned with that same customer’s online activity, the disparity will remain. This represents the most daunting prospect for retailers embarking on the omnichannel journey: linking up the myriad internal teams to a create a cohesive data unit.

Most UK retailers today are on the road to omnichannel offerings but are yet to arrive. Crossover to the US, however, and stores like Sears and Bloomingdales are equipping store representatives with personal customer information that can be used instore, face-to-face. Here the online and offline experience is made seamless for the customer through data collection and then integration across channels.

The fates of BHS, Austin Reed and no doubt others in the coming year, are testament to UK retail's slower reaction to changing consumer habits. And, whilst not going as far as to say the lack of a truly omnichannel offering was the cause of this, the retailers thriving in this modern climate have been developing theirs for quite some time.

Matt Tilling
New Business & Marketing Manager

To learn more about how Fuel can help you bridge the omnichannel divide, why not contact us.