Fostering community in retail – bringing back the human touch, supported by technology

Originally published in Internet Retailing.

For years we’ve been hearing about the imminent death of the high street. Footfall is down, costs are up and e-commerce is taking over. Recent news headlines seem to support this idea, just consider the ongoing House of Fraser saga. Yes, it’s been bought by Mike Ashley, but suppliers are still clamouring for cash (to the tune of £484 million, according to administrator EY), jobs are in jeopardy and relationships with luxury brands like Mulberry have taken a hit.

One of the major threats that retailers face is from e-commerce giants and the continuing popularity of online shopping. While most retailers are answering this challenge by jumping into the omnichannel market, they also need to consider how buying behaviour has changed, how customers are savvier than ever before, and how retail itself has shifted.

For many years physical shops existed solely as a place to purchase goods; it stands to reason that’s what they’re there for. A simple exchange of money for goods. But the environment has shifted and changed, and as a result, retailers themselves have to keep up with that change. Or face extinction.

As mentioned, for many retailers the solution has been to expand offerings into multi-channel. But the fact remains that change is needed to avoid death of the high street.

Going forward, there are many solutions and innovations that retailers are looking at to avoid this slow death. Practically speaking it may require a delicate balance of a number of factors, from technology and new business models to experiential retail and shopper entertainment.

Bringing back community

For the longest time retailers have been focusing on delivering a seamless, frictionless experience. In an omnichannel environment that means ensuring the customer experience is the same across all touch points, from in-store interactions to purchasing goods on apps or online. To a large degree, this has been accomplished with technology. Shopping is more convenient, there is more choice and the transaction is completed quickly.

While this is a win for the customer experience, what about the longer-term goals of the retailer? The ultimate aim is to increase revenue by attracting more shoppers, getting them to stay longer within the store and spending more money. Somewhere along the way, this focus on seamless and frictionless has brought about the soulless shopping experience.

According to a recent study by PwC, shoppers want human interaction when they go into a store. They don’t want to use self-service technology or talk to robots. In fact, 59% of global respondents in the survey said they felt brands had lost touch with the human element of customer experience. Importantly, however, technology is still important. But, according to the report, as an enabler of this more human customer experience and not at its expense.
For retailers to survive the threats to the high street, they need to pay attention to this desire for the personal touch. Indeed, many are taking this a step further by transforming retail spaces into community hubs and serve to bring people together.

But how? Taking a higher-level view and looking at the high street as a whole, some towns are finding success.

While similar towns and high streets around it were struggling, Stockton-on-Tees in the north-east of England defied the odds and actually boasted more shop openings than closings in 2017. It was the only town centre in the region to buck the trend. The town council began a proactive plan of regeneration. According to the council, “… our regeneration of the High Street has been about delivering a town centre that offers different things. It’s been as much about hosting events, celebrating the heritage and creating pleasant spaces as it has been about shopping”. Applying this same mentality to individual stores or retail chains can have a tremendous impact on the health of the high street.

Retailers like Sports Direct and Game are taking the idea of ’shoppertainment’ to the next level. The collaboration between the two companies sees Sports Direct opening e-sports areas in some of its stores. The first Belong gaming arena has already launched, with more to follow, and offers gamers a state-of-the-art space to play the latest games.

John Lewis in the newly launched Westgate shopping centre in Oxford offers customers an Alice in Wonderland themed experience, supported by 300 staff members trained by the Oxford Playhouse theatre.

While this may be extreme examples, there are other retailers who are making smaller, incremental changes, like incorporating coffee shops and nail salons into stores. These add-ons deliver value themselves, but also ensure shoppers stay longer in-store and are more engaged.

 

The technology point of view

Technology has a key role to play in fostering this sense of community and supporting it. While entertainment and experiential retail are one element, they need to be brought together and enabled by technology.

Reimagining the point of sale

Step inside any official Apple store today and you’ll notice that there isn’t a single ‘traditional’ till point in sight. Instead, you’ll find staff members moving freely across the shop floor and assisting customers, with a mobile POS device in one hand.

The benefits are clear: shoppers don’t have to line up to make a purchase, especially during busy periods. In much the same way, there is a huge degree of freedom and liberation that comes with unshackling staff members from a static till and allowing them to work the entire shop floor as necessary. Suddenly, employees are no longer limited to just scanning the barcodes on items – they can serve, engage and interact with customers, delivering that crucial personal experience.

This, in turn, allows for a much more immersive and interactive in-store experience – something that is becoming increasingly crucial to ensure future in-store retail success.

The technology challenge

Regardless of the technology, updated POS systems, tablets, mobile devices or MR devices, there are bound to be challenged. Specifically around cost. However, there are a number of ways in overcoming these obstacles through the use of different payment options, like subscription models.

Retailers can effectively move the cost of new technology to operating expenditure, instead of CAPEX, keeping costs predictable and manageable. This also enables them to spread the cost over time, while being able to leverage the benefits of new technology and shorten replacement cycles.

 

Conclusion

There’s little doubt that the retail environment needs to change to remain relevant, meet customer expectations and succeed in a highly competitive and congested marketplace. Key to this endeavour is ensuring the customer experience remains frictionless, while providing shoppers with the right level of human interaction. And underpinning all efforts is the right technology. Whether that is developing the point of sale and making staff more mobile in-store, or developing experiential, community hubs, technology will play an enabling role. While the future of the high street remains in the balance, retailers need to find that complementary mix of elements to find success.

 

Author: Chris Labrey, managing director, Econocom UK & IRL

Image credit: Fotolia