High street shops remain a vital link in the omni-channel chain

By Rob Shaw, Global Vice President General Business, hybris and SAP Customer Engagement and Commerce.

The latest view of the British high street released last month by insolvency analyst PwC won't come as a great surprise to retailers or consumers. It simply reinforces a trend that began in earnest three or four years ago.

According to its research, three times as many shops closed in 2014 than in 2013 – around 16 a day. In 2012, it was higher, averaging 20 closures a day, up from 14 in 2011. But rather than spelling the protracted end of the high street and the death of retail, the report illustrates that many high streets are evolving to become places to socialise, with a growing number of coffee shops and American and British restaurant chains, amid the charity shops and discounts stores.

People still want to go shopping – 93 per cent of purchases continue to be made on the high street – with the emotional gratification of getting something immediately still the appeal for many consumers. This accounts for much of the success of discount fashion chains such as Primark, which not only has a presence on the major shopping streets around the UK and Europe, but also in New York and Philadelphia. But without an online shopping facility, Primark suits a very specific pattern of impulse shopping and high turnover.

But the economic realities of running a retail operation are changing and the high street has to accommodate the shift to consumer's desire to shop across multiple channels. The fact is that e-commerce is booming, particularly via mobile devices, where more than a third of online sales in the UK (37 per cent) are now made. For many retailers, the high street store now serves a very different purpose – to create online sales by augmenting the 'endless aisle' that stretches via the Internet to a warehouse out of town and back again.

It is positive development that retailers are finding new ways to adapt the retail model - abandoning the in-store environment would mean abandoning one of the richest sources of customer insight. Losing this resource stands to impact the retailer's ability to provide customers with contextually aware, personalised services. The ability to derive context, for example, depends on developing a single view of the customer across the omni-channel retail environment, of which the in-store environment is a significant part.

Retailers wanting to retain a local presence in customer's lives need to ensure that they take the steps to maximise the effectiveness of the store through the technical innovation that creates omni-channel integration. Success now depends on giving the customer the complete package so that they can chose to research online, browse in store, buy online, and collect in store. This integrated experience relies on the infrastructure and software to create real-time transparency of stock, ease of return and a seamless, enjoyable transition across channels and devices that properly represents the brand.
For shoppers already accustomed to browsing and transacting on their own terms, being able to control the method of fulfilment is the final piece to the puzzle. So much so, within the next three years, more than three-quarters of online shoppers are expected to collect their own items and fulfilment is probably the next big battleground in retail.

Click & Collect is fast becoming an essential link between online and high street shopping. According to Deloitte, revenues from the service more than doubled in the UK between 2012 and 2014, and in 2015 it is predicted that Click & Collect locations in Europe will reach half a million. Many high street brands, such as Monsoon, have recognised that alongside improved omni-channel integration, creating a way for customers to collect in-store could ultimately stand to protect the total demise of the shop.

Even in a booming economy, it's unlikely that every retailer will want to create more shops on the high street because they just don't need them. Online shopping tools were originally created to replicate the store experience, now it's the other way round and the online experience increasingly needs to be recreated in store. In practical terms, that means improving the customer's in-store mobile experience with easy to access Wifi so that customers can browse product information and reviews and adopting payment methods, such as ApplePay, that eliminate cash desk queues.

Establishing a physical shop presence is still key to retailers looking to win customers, but its purpose has changed. Shops must become integrated into the whole online process rather than standing alone. That doesn't mean shops are disappearing completely, there may just be fewer of them and they may be in different locations to suit collection, but there should still be plenty to give consumer the physical thrill of buying.

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