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Retail is not doomed: Stores need to adapt quickly

Research by BDO has shown that February 2019 was a ‘bad’ February for the high street, with in-store like-for-like sales down by 3.7% from February 2018. Senior Planner Fiona Flaherty explains how we shouldn’t look at this figure in isolation before we decide it is doom for the high street.

With Christmas spending only just behind us and a unique set of economic uncertainties ahead of us, I don’t think this result is all too surprising.

By 2026 Revo is predicting in-store spending to grow by £49 billion, which is in fact higher than the change in pure online spend of £41.1 billion. Furthermore, sales that are ‘researched in-store and ordered online’ are predicted to grow by £10.2 billion. Click and collect is predicted to increase by £6.3 billion. This makes two findings clear. Firstly, customers still want to be in the high street and are using technology in combination with visiting stores. Secondly, retailers must innovate to integrate their on-line and in-store offer, because the customer sees them as inextricably linked.

A survey of UK consumers carried out by software company HSO indicates that only 29% wanted brands such as Amazon and ASOS to establish a physical presence. In contrast, 73% of shoppers wanted elements of online shopping, such as digital screens to browse extended ranges and stock, brought into existing stores. 

Social media and customer experiences are such powerful forces, so when a business gets it right the news spreads faster than ever before. The retail technology exists, it just needs to be brought more fully into play. Ocado and Marks & Spencer now working together to combine tech with an established store portfolio could see some sector-leading creative solutions.

Whilst retailers are suffering the perfect storm, this is also the perfect impetus to start thinking even more seriously about the innovation needed to encourage more customers back to stores. The evidence that they still want to be in the high street should be all the encouragement needed.

If you have any queries about the future of the high street, please contact Fiona Flaherty or Paul Keywood.

14 March 2019
 

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