Unfortunately, we’re becoming all too familiar with large chain retailers announcing declining results. With unavoidable overheads, such as rising rents, wages and business rates, retailers are also trying hard to overcome the decline in footfall and the resulting squeeze on margins.
But today’s results aren’t the be all and end all. In-store shopping is in the middle of a reinvention, where the fittest will adapt to new consumer preferences, and in turn will survive and thrive. However, those who fail to adapt risk being left behind.
Six years ago M&S was one of the first retailers to announce significant investment in a ‘digital lab’ with 150 dedicated professionals, investing in tech to boost the business. M&S’ acknowledgement that it remains behind the tech curve shows that the sector strongly believes digital investment will be critical in 2019.
In fact, many retailers are competing in a new ‘phy-gital’ world – combining digital with in-store – by investing more in technology and strengthening consumer personalisation and loyalty management. There is scope for retailers with a customer-centric strategy to weather the storm, despite the many roadblocks that traditional retailers face – from legacy systems and outdated supply chains to staggeringly high overheads. This approach seems to be paying off, as we have seen a marginal uptake in retail sales across Greater London, Scotland and Wales.
We’re already seeing newer brands such as JD Sport and Missguided reap the rewards of blending their online and physical presence, demonstrating what is possible. M&S’ Sparks is another example of this, using digital to drive footfall through its rewards programme.
Iconic British brands such as Debenhams and M&S could still turn their fortunes around if they live up to their vision – but talk is cheap. They must make major investment in both physical and digital experiences for customers, and in fusing these experiences together, if they’re to remain a staple on our high streets.
Manu Tyagi, Associate Partner, Retail and Consumer Goods at Infosys Consulting