For UK retail the early part of 2017 has seen no respite from the long-term decline in footfall at physical stores – Retail Week talking of a ‘fairly dismal start to the year’ (Jan 24). Our analysis reveals three principal drivers.
Firstly, there is of course online shopping’s seemingly unstoppable rise; a process that’s been accelerated by the proliferation of very fast, very flexible delivery options. The frictionless ease of the whole process is giving it ‘no brainer’ status for ever-more consumers.
Secondly, the much-documented flowering of the ‘experience economy’ has seen spend drift ‘from owning to doing’, with dining, celebrations and holidays being natural beneficiaries. Even when they are on a shopping trip consumers are spending a growing proportion of their time and money in coffee shops and restaurants.
Thirdly, and interestingly, a subtle shift in buying patterns has proved pivotal in deterring trips. A desire for new clothes is the most common stimulus to full excursions and, with buying migrating online, there’s been a fall in the number of moments when this urge reaches critical mass and consumers ‘just have to go round the shops.’ The huge choice offered by giants such as Boohoo and ASOS has intensified this change.
How retail is fighting back
The challenge of footfall decline has provoked a range of responses from retailers. Some have tried to meet online’s sheer practicality head on, with brands such as Aldi, Lidl, Tiger and Primark seeking to disrupt via strong value equations made available only through stores. Halfords and Argos have turned themselves in to Click & Collect hubs to instil in customers that key sense of control. Some players have downsized to smaller sites to offer the same accessibility but at reduced cost – a trend particularly evident amongst the big supermarkets but one that looks set to strengthen elsewhere.
Many retailers have tried to reverse the tide by providing an experiential dimension only achievable in physical shops – simultaneously playing to that growing thirst for experiences. Some, such as Apple, Topshop and Missguided have created flagship stores so amazing that consumers feel compelled to visit.
Others have developed immersive environments that encourage customers to play with product and explore; turning mere shopping into an event to remember and share on social media. For example, at Charlotte Tilbury’s Covent Garden flagship you can book an appointment with a makeup artist who will ensure you’re ‘red carpet ready’. At Ted Baker’s innovative ‘Physi-Virtual’ store in Shoreditch, users can get a 3D feel for the space online and then, when visiting in person, treat themselves to a little pampering in ‘Ted’s Grooming Room’ for men or ‘Ted’s Beauty Spot’ for women.
Meanwhile, some stores are embracing the shift towards casual dining and drinking by serving this need in their retails spaces – Waterstones’ 5th View Bar offering panoramic views of London and an experience that transforms book buying into a social event of some cachet.
Retailers have even been working to recreate that ‘critical mass’ which inspires people to go on full shopping trips – focussing their flagship propositions in locations such as Westfield or major city centres where other players have done likewise, to create ‘must-visit’ destinations.
So, whilst online is bound to keep making strong claims on consumer spend, we foresee stores finding more and more ingenious ways of ensuring fingers don’t do all the walking.
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