By Mark Dunleavy, Informatica.
On appointment by the Prime Minister, retail guru Mary Portas is continuing her crusade for the future of the British high street with a £1.5 million regeneration project across 15 UK town centres. Never more than now has Portas' vision to 'breathe economic and community life back into our high streets' gathered such support in the light of reports that a record 23,406 shops stand empty in UK town centres. To tackle this and the rise of online retailing, the traditional high street needs a shot in the arm to gain a competitive edge and entice customers back through the shop doors in their droves.
'Social retailing' could be the incentive that the high street needs to coax customers back onto the high street. Social data can be used to get to know customers better. Pooling information on their loyalty, their likes and dislikes, and their product interests can establish a single view of each customer – one that enables retailers to customise content for individual consumers to incentivise them back in store, whether they're regular visitors or newcomers.
One example of getting closer to the customer is encouraging consumers to critique and influence product lines. Giving the shopper the opportunity to influence trends means that the relationship suddenly becomes two-way. By combining information from social media and innovative technology, forward-thinking retailers are beginning to experiment with the likes of interactive dressing rooms. These allow customers to try on outfits whilst interacting with friends through a touch screen mirror. Finding the middle-ground between online and offline, customers can get the best of both worlds. This means that they're able to physically try on clothes but can also order items that might be out of stock – or, if they don't want to carry shopping bags around for the rest of day, arrange for home delivery.
Creating a bridge between the customer's offline and online life means they are empowered as brand advocates that could attract more converts as their activity and recommendations spreads through their personal social networks. Burberry is one brand which has taken the lead with this, encouraging consumers to upload photos via Facebook's image sharing app Instagram, for consumers to comment on and rate the clothing. Consider the potential. It's estimated that the number of Facebook members currently sits at 900 million and the average user is estimated to have 137 friends. Retailers have a new avenue to entice old and new shoppers back in store by influencing their customers' friends on Facebook. Even a low spending customer can become highly valuable if they share their experience on the likes of Facebook, Twitter or Pinterest. Retailers are catching on to this and offering vouchers in store for them to connect with them online.
Going one step further and inviting customers to be involved in inventory and product design decisions will enhance retailers' stock-to-sales ratio and control operating costs. Moreover, it could even transform how fashion trends evolve as retail buyers form seasonal range decisions based on consumer demand. Both Adidas and Nike let shoppers customise many of their footwear product lines through their Mi Adidas and NikeiD microsites. Gathering market intelligence in this way is vital for social retailing to work. The popularity of the web cannot be beaten, but it certainly can be integrated into the offline retail experience more effectively – to the benefit of both consumer and retailer.
Data can be the retailer's biggest ally when it comes to getting this right behind the scenes. Collecting and using social data such as consumer preferences, retailers can intelligently alter supply chain operations. Ultimately, retailers must be able to assimilate and synchronise the data that they collect in order to gain a return from it. Initiatives such as price optimisation, inventory allocation, intelligent merchandising and automated store replenishment all generate enormous volumes of complex data in a variety of formats, with multiple definitions and varying degrees of quality. Being able to integrate and synchronise this data to adjust supply chain operations is how high street retailers will be able to breathe life back into their profit margins.
By producing an interactive and inventive shopping experience, retailers have the chance to charm the British public back onto the high street. Becoming more profitable rests on how effective retailers are at channelling the deluge of data that needs to be converted into market intelligence and put to valuable use. No high street is identical and as Portas argues, each 'high street will need to find its bespoke response' in order to reach revival.
At the heart of the retail expert's 'Portas pilots' regeneration plan is the idea of capturing the imagination of the consumer and providing exemplary customer service. The key to both of these is good data.