Today we heard that Thorntons are thinking of closing a high proportion of their High Street stores. This has come hard on the heels of Habitat’s sell off and the closure of fashion chain, Jane Norman, which has gone into receivership with debts of £120m. Jane Normans’ clothes were aimed at 16-25 years, a demographic that has suffered most during the recession, so perhaps it is, after all, not surprising, but Thorntons…?
Online versus High Street
There has been a growing trend through the past few years High Street shops closing down while their online counterparts thrive, and when we checked rival online fashion store ASOS (As Seen On Screen), we found they had just posted a 41% rise in profits, making a pre-tax profit of £28.6m in the year to 31 March 2011…
Alison Wetton, CEO of LBD (Little Black Dress), which offers posh-frocks for up to a size 32 and is featured on ASOS , says their customers “can’t get enough of online shopping” and that for Plus Sizes, it’s all about convenience and not having to try clothes on in a High Street changing room. Which is a fair point, given how small and awful most High Street changing rooms are, how badly lit, how unflattering the mirrors, and how often they are manned by vacant stick insects chewing gum.
Shopping experience also seems to be key in other High Street closures. For Habitat, who appointed administrators for 30 of its 33 outlets this week, it was down to location. Habitat said that, “trading conditions have remained challenging for retailers of big ticket items such as furniture” and that a return to profitability for the business in the UK appeared unlikely as many of the stores were expensive and poorly located.
And where High Street fails, online can succeed – Woolworths caused a storm when it shut down in 2008, yet has since reopened successfully online. Presumably its virtual staff are nowhere near as rude and unhelpful as its flesh and blood staff were when it was on the High Street.
Coupons and Vouchers
However, other factors may also be at play. Coupon and loyalty cards usage have both increased in recent years (see our post on social shopping), and while newspaper inserts are still the primary method of coupon distribution (89%) and redemption (53%), internet redemption has skyrocketed, rising 263% in 2009. In people terms, this means that 13.1 million Americans redeemed internet coupons in 2009, approximately 88 million will do so in 2011 and it is predicted that this will increase to 96 million by 2015. Which is a lot of people using the internet to reduce their outgoings.
Stats on the usage of discount coupons and vouchers
Recently I researched a new vacuum cleaner online. I found the one I wanted to buy at the cheapest price at Curry’s, and then up popped the Nectar Card information bar saying I could collect Nectar points on the purchase. Excellent, I thought, that’s a bonus. However, when I went to place the order the shop couldn’t deliver for 10 days, so they said, ‘come and pick it up in store as we have one at your local branch’. Which I duly did and the staff were helpful and pleasant, carried it to my car, took the old one away for recycling, everybody happy… except apparently I had unwittingly forfeited my Nectar points.
“Sorry’” said Nectar customer services, when I contacted them, “we can’t help, we only give Nectar points via online purchases, not in store…”
Retailers At Fault – Or Is It Their Marketers?
So it does rather seem that the retailers themselves may be at least partly to blame for this shift towards online buying and away from the High Street. Interestingly most people prefer to touch, smell and see the things they want to buy, especially clothes and furniture, even if they go online to actually buy it because they get extra bonuses or deals, or because they are busy and online is perceived as being faster (even when it isn’t).
Many of the High Street shops also appear to have stopped trying with their windows and displays and in-store experience, and many are allowing their business to be driven online by clever coupons deals and rewards. Or perhaps that’s really just a case of letting their marketing department jump on the ‘newest’ band wagon (ie Digital) at the expense of traditional marketing? In which case, why does it have to be one thing and not the other?
So if High Street brands are really serious about not going to the wall and we as a nation are serious about not losing our High Streets, there’s our advice for retailers – and their marketing departments:
• Online stores should be BEAUTIFUL and a fabulous experience, and reflect the customer experience of the real shop, which should also be BEAUTIFUL and a fabulous experience. Hire a decent shop fitter and be creative. Hire a decent digital team and let them be creative. Make sure they are joined at the hip and communicate. Ensure the brand experience is seamless.
• Invest in your staff – good staff are crucial and whether in the real shop or online, they should add value and offer excellent customer service and should be as unfailingly polite and helpful as the staff in my local Curry’s and nothing like the old Woolworth’s staff. Nor like the dismissive Nectar employee.
• Cater for the senses – people like to touch and hold, taste and smell and try on. They like moving images, they like nice sounds, they are tactile. The High Street is also a social experience, so shops shouldn’t be hidden away or located out of town – they should be at the heart of a community. Online stores should be –and are fast becoming – part of the social media landscape. So integrate them properly and invest in finding out about your customers as the fully rounded people that they are, not just numbers in one channel or the other.
• Bully councils to lower costs – The FSB and local markets have been campaigning for years against short-sighted councils. Get together and add your weight to the argument.
• Rewards should be given, and given across the board – don’t try to divide online and offline and pitch them against each other. Don’t drive people online at the expensive of offline. And if you are focusing on analytics and tracking, marketers, then get clever and use the vouchers, codes, coupons to track when people browse online but purchase in store – and vice versa – because here’s the final point:
• People don’t follow the rules – they don’t just shop online. They don’t just go to the High Street. They might be looking for a sofa, for example, and look online and in store, in magazines and on television. When you are looking, you look everywhere, which is why the brand, the design and the overall level of customer satisfaction across ALL channels is so very important.
In addition retailers and their marketing departments should stop treating online as somehow separate, but rather treat it as it is – a research centre, a sounding board, a launch pad, a social activity and an outreach of the physical store.
In summary, make shopping INTEGRATED.
As a follow on to our blog last week about how online shopping is beginning to pose a real threat to the High Street , today we are looking at rash of new data generated by the new shopping trends and habits that have emerged over the first six months of 2011. As with all areas of digital, the pace of change is rapid and fierce and those that don’t take notice of the stats will undoubtedly get their fingers burned.
