As the toll of new store closures continues – with GAP and M&S the latest in a long line of big brand names to bow out of the High Street – and retail vacancy rates rising to 14.1 in Q1, leaving shops in town centres shuttered and empty, you’d be forgiven for thinking that the outlook for physical retail remains far from rosy.
But there are positive signs that retailers are readying themselves to invest in the future of their bricks-and-mortar store networks – with new hybrid stores that closely integrate digital into physical buying journeys central to retailers’ strategies to reignite demand for in-person shopping and drive footfall back in-store.
Less talking, more walking
Hybrid retail is by no means a new concept; the industry has pointed to the need for ‘phygital’ shops that blend off- and on-line and the connected store for some time now. But for all the talk of reimagined, digitally-empowered bricks-and-mortar shopping experiences, many retailers still struggle to truly converge their digital and physical channels. But change is on the cards, a new report from Klarna and Visualsoft suggests.
Despite the explosion in demand for ecommerce witnessed during the pandemic, original research of 200 UK retailers in the ‘GET SET. GROW: How UK Retailers Are Preparing For The Return of Demand’ report shows that over half (54%) see physical outlets as a key focus for their brand, and point to stores ‘co-existing’ with online channels in the long-term.
While UK footfall in-store faces a ‘slow but steady’ recovery – the latest BRC-Sensormatic-IQ Monitor footfall indexes shopper counts as being currently almost a third down on pre-pandemic levels – retailers are recognising the ongoing halo effect of the store on ecommerce. And that’s an opportunity that can’t be underestimated as they look towards post-pandemic operations. Research by the International Council for Shopping Centers found the opening of new store leads to an average jump in web traffic of 27 percent, showing just how in-person interactions shape digital engagement.
“Although some of this shift to online is undoubtedly permanent, retailers should be looking to include in-store in their digital strategy,” Alex Marsh, Klarna’s Head of UK, suggests.
Technology is the toolkit for newly connected channels
Over half the brands polled in the study (56%) pointed to technology as the crucial link in unifying omnichannel experiences, and allowing digital experiences to be brought in store and in-person shopping experiences replicated online.
Faced with lockdown restrictions and enforced store closures, many retailers have already got creative and made the jump in building out ‘experiential’ experiences online – think Curry’s ShopLive capabilities that let online shoppers chat to product experts in the store while browsing online, or Charlotte Tibury’s VR offer that lets shopper ‘try on’ make-up digitally. But, to date, bricks-and-mortar is yet to fully receive its post-covid digital make-over.
Key tech integrations planned by those retailers polled include: in-store signage promoting online-exclusive items (24%); ensuring in-store staff are equipped with mobile point of sale (mPOS) systems (23%); and using QR codes to join the gap between offline and online.
“As our reasons for shopping have changed [over the last 12 months], online and offline retailers must also adapt. Ecommerce disrupted the traditional route to market of sourcing a product, shipping it and selling it in a physical location – a trend the pandemic put rocket boosters under.”
David Duke, Digital Director at Visualsoft
“Consumers are seeing a completely different High Street to the one they knew before the pandemic,” Klarna’s Marsh added. “Having a truly connected vision will be crucial as consumer spend becomes more evenly spread across channels. And finding new ways to bring the virtual and physical worlds together will be they key to making that happen.”
