There's value in offline retail, but the metrics are wrong
- Summary:
- What technology is working well in shops and how to measure its worth - some use case exemplars.
A good place to head to see this very issue in the flesh is outside Top Shop’s flagship branch on Oxford Street in London any Saturday afternoon. There you’ll see a flock of the shop’s target audience – those in their late teens and twenties – lounging against the windows, waiting to meet their mates, obligatory phone glued to hand. Friend arrives, phone gets stashed away in pocket, they disappear down the escalator into the depths of high street fashion.
And herein lies the issue facing Top Shop et al when it comes to technology and shops, according to Guy Smith, group design director, Arcadia Group:
We’re incredibly confident that in our stores we have astonishing technology, really cutting-edge stuff. The problem is that it’s not ours, it’s our customers’, they’re carrying it in their hands. They’re doing that at a cost of a few hundred pounds. For us to invest in technology that advances their journey to a similar degree, it’s not an investment of a few hundred quid, it’s tens of millions.
We’re in this slightly awkward position of saying our customers have this incredible tool that they use every waking moment of the day. Our challenge now is to continue that dialogue in store. The big question for us is, do we continue to go through the customer’s handset?
One of the core purposes of retaining physical stores in the digital age is that customers can engage with actual products. If Top Shop went down the route of encouraging shoppers to get their phones out their pockets to engage with the store digitally while in store, Smith is concerned it could negate the prime reason for coming to the shop. He explained:
Do we actually want them to disengage from that experience of touching and feeling and trying things on. That’s a really tough one for us at moment.
Dixons Carphone have gone the down the more traditional route of giving store staff tablets so they can view live stock and understand what is going on across the business. The firm’s head of brand, Corin Mills, said:
Little things like that really help. It’s simplifying the staff journey and really focusing on the experience.
Mills is also a fan of technology’s ability to compare complex data for the benefit of customers.
Carphone Warehouse is using analytics technology, which instantly searches and compares the best package for customers, but this is being offered in stores rather than online. The idea is to bring the search engine experience and put it in the hands of staff. Mills added:
There’s nothing wrong with having a different experience online and in store.
Sure thing
Shoe retailer Schuh has turned to Apple-style mobile tills, moving away from fixed cash desk locations, in a bid to update stores for the digital age. As well as giving stores a more modern feel, this move means retailers can make use of that previous cash register space for selling space – Schuh’s Marble Arch store now has a kids department where the cash desk used to be. Schuh has also installed kiosks fixed to the walls that customers or staff can use to check stock availability.
Both options rely on Schuh to provide the technology, rather than requiring or encouraging customers to get out their own smartphone. Sean McKee, director of Ecommerce and Customer Experience at Schuh, said:
We’ve found that the partnership model works best, with the till screen screwed to the wall where a member of staff works with the customer to find the information.
This works well, as you have staff and customers all on the same floor, rather than sales staff travelling to the stock room to check for sizes. This is important, as McKee believes the relationship between customer and store staff is the key to high street survival:
If you attempt to out-Amazon Amazon, you will fail. We have to work out what is our purpose, what are we for. What can we do that Amazon can’t do particularly well? Train staff to better direct customers in the physical locations. The reality is that Amazon is raising the bar in efficiency and speed and what the last mile can look like. But we see human beings trained and interacting as absolutely key to the future.
At fragrance specialist Jo Malone, the firm is monitoring social media to check company standards are being upheld across stores. The gift-wrapping of items is a key part of the brand experience, explained Jo Malone London global store design director Brendan Teer, so social posts can be a useful way of identifying if this element isn’t being done properly in a certain store.
Teer also views technology that can bridge the gap between the online and physical worlds as an interesting concept to be developed. One example might see employees in store wearing Google glasses, and online customers able to connect to them and try on products onto the employees’ skin - what the employee sees with the glasses is what the customer sees online.
But while there is plenty of technology that retailers can try out and even use successfully within stores, unless the underlying attitude towards physical space shifts dramatically, the high street will see an ever-growing number of store closures. McKee explained:
Traffic and conversions are still relevant, the question is where you draw the line around that traffic and conversion of what? Channel-centric definitions of store and online are not helpful at all. If we won’t change them, what we have is a recipe for not understanding stores properly and closing stores over the next 5/10/15 years. We’ve got to do better than the prevailing measure of what a store does and looks like.
Smith agreed that a new set of metrics is needed to judge the success of brick and mortar. Core sales data will always be important, but retailers need to start looking at other metrics and build their own custom metrics, which won’t necessarily be the same around the world. He added:
As more and more sales migrate online, we need to start validating the investment in that physical space by what it does to attract people to the brand in the first place. If we do a popup in Williamsburg, do we judge the success of that in a different way to being on a high street in Watford. One is more about sales in that location on that date, the other might be more about increasing brand awareness in a new marketplace. First work out what we want to measure, and then how we’re going to measure it.
B-word
While this could prove challenging for retailers, there is another major problem on the horizon that is already starting to hit hard – the B word. Brexit has affected the economy in general, as McKee noted, and the effect of the currency devaluation was felt over the Christmas period:
Where customers could be discriminatory - non-food - they discriminated. There’s s recruitment crisis to come. There’s a consumer confidence crisis probably in full swing as the impact is felt. It’s not helpful at all.
For Arcadia, Brexit is just one of a number of problems, added to a higher cost base thanks to rising rents and business rates, and the national living wage pushing up the cost base; along with lower footfall, lower conversion, and a fundamental tectonic shift in the way people are spending their money. Smith explained:
For young 20-somethings, there’s a more fundamental trend going on. People are moving away from buying stuff for instant gratification. We sell stuff because people want it, not because they need it to survive. It’s about social standing, looking good in your peer group, showing off, making yourself feel better.
The reality is, as an industry we grew fat on a generation who got that kick by buying disposable fashion. That moment has passed. You can now find that feel-good factor by going to a festival, by having an experience, by having a coffee in Starbucks. Whatever that thing is, it’s not buying a product.
The answer, according to Smith, is to totally reinvent the business:
You have to start from the ground up and say lets recreate ourselves. Pretend we don’t exist for a moment. If we wanted to disrupt our market, what would we build to do that with.
My take
This isn’t so much my take on the retail technology trends discussed at the panel session, but an observation I can’t help but make: of the six panelists, all were male.
All-male panels have been a feature at dozens of the events I’ve attended over the years – I’ve been a tech journo for nearly 20 years after all. Still, going to any event in 2018 that hasn’t cottoned onto the benefit and requirement of mixed speaker lineups is disappointing; at an event purporting to be designed to help businesses better serve and connect with millennials, who tend to be more vocal and passionate in their support for equal opportunities and inclusivity compared to previous generations, this seems quite a major oversight.
Realising that some if not all members of the audience would no doubt notice the unbalanced lineup, Forbes contributor and panel chair Paul Armstrong made a rather awkward joke to start off the session, remarking on the “very gender-neutral panel” and dismissing it with a “we’re working on it for next year, don’t worry.”
Well, I do worry as 2019 feels far too late to be considering the notion of always presenting a diverse group of speakers.
