The high street can be saved if physical shops and online retailers collaborate and use data
In January, affiliate marketing company Awin released research showing that 39 per cent of Britons wouldn’t really mind if we lost all high street stores altogether, with over a third of respondents saying that they “almost never” shopped there anyway.
News stories about high street stalwarts being in the doldrums have become a recurring theme, from struggling Patisserie Valerie being bought out by Irish private equity firm Causeway Capital Partners, to Sports Direct founder Mike Ashley acquiring retailers such as Evans Cycles and House of Fraser.
So against this backdrop of growing national consumer apathy, do traditional retailers have what it takes to rejuvenate our high streets? Are rent negotiations – as HMV’s rescuer, the Canadian entrepreneur Doug Putman, is pursuing – and an injection of merchandising enough to save the majority of these retailers, even though they have missed the modernising boat?
This is where customer data comes in. At the moment, data collection continues to be vilified because of entirely valid consumer concerns over privacy and the commercial exploitation of personal details taken from social media.
However, when data is collected lawfully and put to work respectfully – such as by retailers which use it to take the guesswork out of product development and reduce overstocking supply chain risk – it not only results in products that people want to buy, but it creates better sustainability outcomes too. And this is where online markets have a big advantage.
In contrast to the seemingly-endless price discounting on the high street, “digital native” retailers hone in on online customer acquisition costs. They continue to use observations about what customers browse and buy to give the customer more of what they want.
But business-building data lessons can also be learned in store – although these tend to focus on the experiential. For example, Paris-based Hardware Club, a venture capital investor in tech startups, successfully opened an outlet in London’s Harrods in order to collect data to gauge consumer response to its products.
Similarly, Smartech – the business started by former footballer Jacov Nachtailer under an escalator atSelfridges – attributes its 450 per cent sales growth to offering its consumers an opportunity to experience the latest tech.
By pooling expertise to put customers first, including data lessons learnt online and experiential consumer practices developed in stores, collaborations between traditional retailers and digital natives could help the high street shops survive and thrive.
I have huge respect for physical retailers. Their expertise is vast, especially when it comes to managing physical infrastructure, which is a difficult thing to do well.
What a data-driven business brings to the party (alongside speed and responsiveness) is the ability to pinpoint those winning designs that customers really want to buy. This will minimise surplus stock waste, which is critical in a world where sustainability matters more and more to consumers every day.