Nobody can deny it’s been a tough year for the high street, with a number of once-successful brands either fighting for survival or shutting their doors for good. Even those who are faring comparatively well – often by developing a strong omnichannel offer – are no doubt all-too-aware of their vulnerability in a challenging environment.
Now we’re in the midst of the crucial ‘Golden Quarter’, it seems a good time to question the viability of current retail strategies. With Amazon now the fifth largest retailer in the UK, it would be easy to assume that consumers are driven entirely by ultra-convenience (i.e. fast delivery to a chosen address) and low prices.
Digital shopping channel
It might therefore be tempting for store operators to adopt a ‘pile it high’ sales strategy and a race to the bottom on pricing, at the expense of good customer service. Or perhaps it’s better to invest in IT infrastructure that enables them to create better online experiences, so that physical outlets become little more than a click-and-collect point or a place to showcase a handful of products.
Executed well, any of these approaches can deliver results – but what often separates the likes of Amazon (whose domination seems unstoppable) from struggling retail brands selling comparable products is the extent to which they have achieved, and indeed pioneered, digital transformation.
Barriers to the digital transformation
As this recent Forbes article highlights, traditional retailers need to move from the supply chain approach of ‘buy low, sell high and optimize everything in between’ towards a ‘digital value chain’ that involves ‘collecting data (about products, customers, and locations), turning that data into insights, and then turning those insights into action.’ The author goes on to suggest three barriers to full digital transformation:
- Reluctance to embrace change: Some retailers are so intent on protecting organizational structures against major change that they gloss over ‘awful processes, inflexible technology, and competing/contradictory incentives that have different parts of the business working at cross-purposes’.
- Poor use of data: There is no unified approach to data strategy, nor culture that sees information turned into insights and action. Brands can be guilty of relying on assumptions, out-of-date and/or limited insights, and failing to invest in the technology that delivers the data they need.
- Under-estimating the value of technology: Without innovation and investment, IT systems are not able to meet the changing requirements of today’s retail market. Different teams might buy their own solutions – but this results in ‘disconnected processes’ and few meaningful insights.
Technology used in retail stores
While it seems that digital sales and marketing teams are well-versed in the tactics needed to convert web traffic into online sales, some retailers are failing to take in-store data, such as traffic, dwell time and other behaviors, into account. Unless they have access to up-to-date insights, bricks-and-mortar stores will continue to struggle – especially if they must also contend with currency fluctuations, unpredictable weather, yet more online competition, plus their usual overheads like rent, staff wages and fixtures.
News of retail casualties is always sobering, yet with the right investment and buy-in across the organization, there’s every reason to believe stores will not only survive but deliver real value and ultimately, safeguard the brand’s future.
For more information on how our in-store analytics can drive conversions, click here.