Total Business Magazine

What Does the Collapsing High Street Really Mean for Small Businesses?

Debenhams, House of Fraser, Mothercare – the UK’s retailpocolypse shows no sign of slowing down. The big brands may make the headlines, but smaller high street businesses are also threatened.

The figures are stark. Between 2020 and 2030 current estimates suggest half of the UK’s existing shop premises will disappear, and 100,000 stores will close, leaving just 120,000 shops on our high street. In contrast, by 2030 e-commerce will account for around 40 per cent of all UK retail sales.

So, do the smaller brands have as much to fear from the high street’s demise, and how can they try and protect themselves?

 

  1. Recognise and account for the costs of using the high street

The overheads of high street retail premises are a retailer’s biggest threat. While the Autumn budget statement indicated £900 million would be made available in business rates relief for around 500,000 small businesses, this may not go far enough.

For customers, the lack of parking or expensive parking plus the cost of fuel means it’s often cheaper to shop online and opt for delivery costs – particularly in rural areas. The old ‘build it and they will come’ adage doesn’t hold true today. To counteract this, it’s important to recognise that your store is a destination, and the experience of coming in and shopping there must be exceptional.

 

  1. Even small retailers need to create an experience in-store

Across the board there’s a definite lack of an experiential service – there is very little enticing shoppers into high street stores, and keeping them there. Retailers have not generally made sure their offline experience keeps up with the online experience, where in contrast, they’ve invested in imagery, a great UX and techniques like video.

In-store experiences don’t have to be expensive; in fact, small retailers can be more nimble and dynamic in creating them than larger ones. It could be as simple as holding a well-branded in-store event or offering something enticing for families – for example during weekends and during half term.

 

  1. Ensure your online offering continues to evolve

Added to that, the online and offline experiences should always complement each other – people buying online and in-store should be receiving the same brand experience, and the two customer journeys should link up.

As a smaller retailer, could you offer the customer an order online, collect in-store option, for example? This could work well and would also drive footfall. Remember, even if an in-store interaction doesn’t result in an immediate sale it’s still an experience with the brand. This is especially true of bigger ticket items like bikes or camping equipment, for example, where sales assistants need to act as trusted, experienced advisors.

 

  1. Start with: how do your customers want to be serviced?

IKEA is a great example of a brand that’s adapted its offering to suit customer need – even if it seems to go against its original proposition. Set up as a warehouse location for customers to drive to and pick up furniture they saw instantly, flat-packed for self-assembly the same day, its delivery option is now gaining momentum.

Having realised there was also a market for people ordering from IKEA online, it now offers paid-for delivery on most products – which certainly isn’t as cheap as many online manufacturers’. The delivery option complements its offering.

Some products don’t need to be touched, seen or discussed in detail – such as a phone cable. You might be happy to choose one online and get it delivered. Whereas clothes, for example, you might want to look at, try on or experience. Start with understanding what your customers want and revisit the planning process as customer’s wants and needs change, and as your offering does.

 

  1. Truly analyse your purchase history data

We regularly talk to retailers of all sizes who analyse purchase data, but sales are often tracked on the basis of last click analysis. That simply doesn’t tell you the whole story. Retail purchase journeys are convoluted and might start with a flyer, a Facebook promotion or an in-store interaction. Just because the last click before purchase came from an advert online, it doesn’t mean that’s where the majority of your future investment should go.

Some channels are hard to evaluate, but it’s worth making sensible attributions based on your activity. If you don’t, you’re trading off a very slim view and not truly understanding the cost of finding each new customer.

 

  1. Learn from larger ones at key sales times

Sales events such as Black Friday are now a firm fixture on the retail calendar, and are arguably as important as traditional periods such as Christmas. It’s not easy to cut through the noise and discounts but smaller retailers should be innovative – aim to inspire your customers.

To gain the most return, start preparing for key sales events as far in advance as possible, putting a clear plan in place and ensuring you have a manageable timeline. Be ready to act at any time, given that retailers like Amazon may change the rules at a moment’s notice.

The retail industry is changing for good and if the smaller retailers don’t continually evolve, online and offline, the decline will persist.

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