Updated: Nov 19, 2019
We’re living in the midst of a retail apocalypse.
Not a Biblical-style end of-the-world apocalypse, maybe, but one certainly involving “destruction or damage on a catastrophic scale” as one dictionary definition has it.
KPMG, the auditing giants, say some 44 retail businesses crashed into administration in the six months to September.
Their analyst cousins at PWC say there was a net decline of 1,234 chain stores on Britain’s top 500 high streets in the first half of 2019. It marked the highest number since the analysis began in 2010. In stark terms, an average of 16 stores closed each, and every day.
The list of doom includes well-known names. Most recently Mothercare joined the pile of retail dead bodies that are littering the high street.
The other companies to go into administration include the Queen’s dressmaker Hardy Amies; wine specialist Oddbins; Better Bathrooms; Office Outlet; Debenhams; chocolate retailer Rococo; Karen Millen; Bonmarche; and maternity chain Mamas and Papas.
The apocalyptic events gripping the retail scene aren’t the normal churn one might expect in a dynamic economy. They mark a fundamental shift that requires a complete and radical rethink of the what retailing is for, who it serves, and how businesses operate. We will come back to that a little later.
If you aren’t convinced of the change happening out there in retail parks, in town centres, and other environments, then consider this: The numbers of businesses going into administration may well be the tip of a very large and menacing iceberg.
Some big, big, historic names have announced changes in their estates. Marks & Spencer is in the midst of plans to close 100 stores to cut costs. Even the superpower that is Tesco announced plans to cut 4,500 jobs back in August.
Once mighty Boots told the world in the summer that it is closing 200 stores.
The changing environment has been devastating for employees, too, as the retail sector has lost 106,000 jobs between 2016 and 2019.
While the picture does look dark with operators struggling for ways to stay relevant as the pace of change accelerates, there are glimmers of hope.
New shops are opening up at an increasing rate.
But they are not the same types of operations. Takeaways, gyms, and specialist vaping shops all reinforce the view that customers are looking for one thing above all others. That is an immersive, sense-rich experience.
In return, they are willing to give their time and money.
Providing an online arm to a high street business may not be enough to feed customer desire for experiences, however.
And arguing for changes to business taxes, while it would stave off the tidal wave of change for a while, does not alter the need for change.
John Lewis, which by common consent gives great customer service, and was among the first to offer a click and collect addition to the business, suffered its first-ever half-year loss. Back in September the company warned of deteriorating conditions on the high street.
The crux of our argument is that simply adding on an internet option to a business model that has been fundamentally undermined, is not the way to go.
When you are clinging on to the wreckage, it is no good trying to reassemble the ship. It’s time to get on board a different boat.
It needs a paradigm shift in thinking.
We believe that the necessary shift in thinking requires the use of deep technology. Technological ways of thinking must be adopted from top to bottom to give customers better experiences.
It is already happening in some isolated cases.
Virtual Reality (VR) is helping one business’s customers to visualise what furniture will look like in their homes. They can try before they buy by using VR goggles to let them walk through the space and see the furniture in a digital representation of their own homes.
Products can be brought to life for consumers, who in return oblige retailers by providing them with engagement, loyalty, and large amounts of useful data.
Cameron Mitchell, CEO, Majid Al Futtaim Leisure, Entertainment and Cinemas, says in a blog for the World Economic Forum, that: “Retailers can’t just pay lip-service to an experience-led approach; the ambition has to be for customers to love – not just like – coming to a mall, cinema, retail outlet and entertainment destination.”
The kinds of root and branch digitisation we are talking about incorporates the whole indoor space, mixing the physical with Virtual Reality and Augmented Reality.
The in-depth use of analytics techniques can give, for example, vital granular-level data on responses to calls to action. Techniques can be optimised, leading to sales.
Whatever changes there are to retail, the fundamental truth is that people still need to buy clothes, cosmetics, and consumables.
It’s just that the internet has broken the business model that has been a success for as long as one human being has sold stuff to another human being.
But we humans love our experiences, and e-commerce has given us more time for immersive, quality experiences. We don’t have to spend hours looking in the shops for a new kettle when we can get it from Amazon, or eBay.
That has freed up our time to go to coffee shops with our friends, to have meals with our families, and to immerse ourselves in making the right decisions when it comes to big ticket items.
Full digitisation is the new oil in the gears of retail, and the good news is that the solutions are out there.
The paradigm shift in retail also opens up new opportunities for staff to add to their skill sets.
The new world of retail won’t need people behind the tills, but it will need people with an eye for a good Instagram picture, to be social media advocates, as well as all the other people-friendly skills that they need to do their jobs.
To discover more about Briteyellow's technological solutions, click here.