How will the high street prosper in 2013?
It’s not been a great couple of weeks for the high street, and shoppers have been hitting social networking sites to reminisce and express their sadness at the demise of the likes of HMV, Jessops and Blockbuster (so much so that #HMVmemories trended on Twitter).
But the truth is that those customers mourning the demise of once loved high street retailers are the ones who, despite having a fondness for these brands, have been shifting their spending elsewhere to fit in with their lifestyleslifestyles that demand speed and value, and don’t have time to hang around for the conventional retailers like HMV and Blockbuster to keep up.
Simply put, while brand heritage can still be a differentiator in some circumstances, it can’t be traded off like it used to be, and certainly can’t replace channel flexibility.
However while columnists have been falling over themselves to offer expert opinions on why the high street is dying, don’t start writing obituaries for every store on Oxford Street just yet. There are still some great opportunities for retailers to thrive.
But which companies will be the ones that succeed? Without naming names, there are certain trends that retailers will need to consider in order to prosper in 2013.
Brands will increasingly accept the concept of showrooming and a growing emphasis on price matching or differentiation on product offer or service (in particular integration across channels) to justify price. Currently, while retailers understand the need to combat showrooming, only 25% of retailers report full integration between their store and online channels and only 15% of retailers share their inventory online. This figure will (and needs to) rise sharpish.
More brands will hopefully be embracing multichannel store formats in new and innovative ways. Whilst it is unclear as yet what type of technology will lead the way here, we’ll definitely be seeing more emphasis on opening up internet stock for purchase in-storedigital technologies format part of the in-store experience and the opening up of online stock for purchase in store. This will involve changing the roles of sales associates and store staff – they will need to understand and support every detail of the multichannel shopping journey.
As alluded to earlier in the piece, We can expect more channel agnostic, flexible stock and fulfillment retail models, making it easier for the customer to get product through any channel shop how, when and where they want.
We will see a a revival of locally produced and niche products as a differentiator feels less of a ridiculous theory than it did two years ago, don’t be surprised to see more of the likes of with the likes of Etsy and notonthehighstreet.com stealing the attentionleading the charge.
With the ongoing economic pressures, customers will continue trading down for staples in order to afford luxury items. They will happily shop in Aldi instead of Tesco and buy t-shirts in Primark instead of Marks & Spencer if it means they can afford that Mulberry handbag. This is likely to lead to a diversification in the high street and hit mid-market retailers hardest.
These are just a few areas that retailers will have to think about this year. Indeed, the smart companies already are. The ones who don’t will be in danger of ending up as little more than a nostalgic hashtag.
Hayley Thomas, Managing Consultant, The Engine Group