At first glance, it's hard to see a bright future for the UK's high streets. The latest vacancy rates rose to 14.6% in June, the highest level on record, and the latest reports claim that high street stores are suffering as shoppers stay at home to watch the Olympics. While physical stores seemingly struggle the grass certainly looks greener for online and mobile commerce channels, with a 359% growth in sales via mobile reported for the last year, and an expected 13% increase in online sales for 2012.
Increasingly customers are demanding that retailers better integrate digital technology into the overall shopping experience, creating a single consistent experience regardless of the physical location or channel customers use to engage with them. Mobile is well positioned as a key enabler for this, as it is both the only truly portable, connected technology that can capture customer behaviour, and that customers can access, in every channel of the retailing experience.
More conservative retailers may see mobile as a threat to the high street, offering those hunting for a bargain the ability to price-check goods on their mobile phones whilst in store - a quarter of smartphone users are already doing this. Feeding the intrusion of online competitors into the bricks and mortar retail space clearly threatens to impinge on a retailer's bottom line. You can see why some may be fearful, but ignoring this trend will only worsen their predicament.
For those retailers with a bricks and mortar estate who are willing to embrace mobile technology, their fate is not sealed. Google recently revealed that 95% of smartphone users research products via their mobile device, with 24% continuing to purchase items offline. So, there is a positive connection between consumer research behaviour and instore purchase.
In some cases we're even seeing virtual shops taking physical form, such as eBay's pop-up outlet in Soho at Christmas last year, and Tesco's interactive virtual store that has just launched at Gatwick Airport. As mobile technology and internet retailing continue to join forces, there is an opportunity for physical retailers to adapt and succeed alongside the change, but what steps can they take to capitalise on this change?
1.Give shoppers a reason to buy the product from you - immediately
Shoppers are increasingly using mobile to make price-led purchasing decisions, but mobile also offers retailers a real-time response. Mobile technology can be used to deliver both push and pull discounts, value-add or loyalty offers, and gives retailers an automated data collection method that can be used to build better CRM databases. This information can then be used to deliver personalised and relevant communications that enhance the consumer shopping experience and keep them coming back.
2.Harness tech developments at Point of Sale
Retailers need to have the correct technology instore to capitalise on their customers' digital behaviour. For example, being able to accept digitised communications for transactional purposes, such as coupon codes, without the need for separate physical 'proof' (i.e. paper) gives retailers the ability to provide an incentive to purchase in line with their customer's digital behaviour.
3.Consider mobile as the lynchpin of multichannel retailing
Retailers can encourage increased footfall by intentionally blurring the boundaries between digital and physical retail. For example, the recent launch of PayPal inSTORE in Aurora Fashions' stores has enabled customers to pay for items in store using their PayPal account, or process refunds and exchanges in-store using the original PayPal tender.
4.Use mobile capabilities and consumer behaviour to your advantage
The natural functions of mobile phones make them extremely valuable tools for bricks and mortar retailers. GPS functions can be used to deliver localised store information, whether initiated through search, wifi connection or apps. Furthermore, the likes of SMS, QR codes, Augmented reality and in the near future NFC instore can deliver things such as product information/uses, pricing, offers etc whilst keeping the customer in your environment both online and offline.
5.Act now
Time is of the essence. Retailers must start taking advantage of this trend now if their physical stores are to survive. Essentially, the mobile, online and physical shopping experiences need to become seamless, and quickly.
The story's far from over for the British high street. Retailers simply need to commit themselves to moving with the times and embrace the technology that's on offer to them today. If the right steps are taken now then the UK high street can get tomorrow's profits moving in the right direction and re-establish its place within the retail industry.