In the face of flagging footfall on the high street, can technology turn our town centres around? Dan Kirby shares his vision for a better tomorrow
The high street isn’t an easy place for SMEs to stake a claim. PwC and the Local Data Company found last month that town centres had lost two and a half times the number of stores this year compared to 2013. Trapped twixt e-commerce booms and the encumbrance of high rates, future-proofing a retail offering is far from a straightforward task.
Even in the supermarket space, long the most bullish players in the retail sector, disruption is having some far reaching consequences. From overstated profits to shrinking market share, Tesco has taken a particular hammering recently, calling some to question whether the traditional supermarket model has had its day compared to discount rivals. Despite being relatively small fry in the UK retail market – Aldi enjoyed 4.8% market share in August, compared to Tesco’s 28.8%, and Asda’s 17.2% – foreign discounters are enjoying double digit growth, while the likes of Tesco and Sainsbury’s are shrinking.
When even global retail chains are feeling the pinch, it shows that no one can take their position in the market for granted. But this isn’t to say there is nothing a retailer can do to revive its fortunes. To my mind there is one obvious way tool they have at their disposal: technology.
Whilst some retailers may be strapped for capital, they have another significant resource at their disposal: data. For example, Tesco is well known for the sophistication of its Clubcard, the data it knows about its shoppers. Dunnhumby, which takes care of the Clubcard database, has been valued at over £2bn. But how can this kind of data be turned into a tool that really enhances the customer experience, rather than just targeting offers? How can it better work for the customer?
One of the great internet hoo-haas is the collection of personal data (seen all those cookie alerts?). But this personal data allows companies to better personalise their customer experience. Google and Facebook use that data to better target ads. Apple uses it to refine its products. What can retailers do to build on their databases and better personalise your shopping experience? Apply the learning.
I’ll give you an example: I have three daughters and the eldest is ten. Therefore several times a year, we arrange kids’ parties and my wife will shop for things like apple juice, bread rolls and Hula Hoops. This pattern could be turned from a reactive last-minute online shop – which it generally is – into a proactive service layer. I am 100% positive that additional items could have been sold to us: balloons, streamers, cute cups and the like. There could even be suggested packs of party goods, from cheap and cheerful to expensive Cath Kidston-esque.
If you know lots of information about my family, why not go the whole hog and really get to know us, making our lives easier in the process? We’d spend more money for the privilege.
People’s shopping habits are changing – apparently we are buying less stuff, more often. We’re also buying more online and, thanks to the likes of Aldi, have more choice than ever before.
Why not take the evolution of shopping a step further. Why do we even need to consciously shop for some items? Like bread, milk, breakfast cereal? My family buys the same stuff week in week out. Why? Because we like that stuff. So why do you even need me to ‘shop’ for it?
If you could demonstrably show it was cheaper than the competition, a recurring monthly fee would cover a regular drop off of staples at your door, like a 21st century milkman. This commitment of recurring revenue would allow better forecasting and the saving could be passed onto the customer. All of which could be managed by retailers’ mobile apps.
Why not go a step further and use tech to facilitate bulk-buying with neighbours or work colleagues, so that entire streets could enjoy discounts if they bought together? Taxi disruptor Uber – somewhat controversially – cranks up the pricing when taxis are in short supply. Why not do the reverse with your weekly shop and allow a shared shopping list that drives prices down? This could be a live feed on a social platform like Facebook and build a viral effect through a shared localised interest amongst friends.
Joining the dots
We have acknowledged that a lot of retailers have great data and a solid e-commerce platform. But how about closing the loop? Why not use new tech to take the digital experience into the physical store?
iBeacon technology allows for a personalised service layer within the store. Installing Beacons around a store would allow shoppers to map out their shop, directing them around the store based on their shopping lists or previous purchases. Offers and upsells could be done on a purchase-by-purchase, customer-by-customer level. Bought some mince beef, kidney beans and tortillas? Why not buy some guacamole and Corona? They’re on offer – but only for you and only if you buy them today.
And with multiple logins into the same app, families could benefit from a joint account. I would be able to get offers when I pop in on the way home, based on my wife’s shop from the mobile app at the school gates.
The opportunity for retailers is to reimagine how their businesses can work. Digital shouldn’t be a thing that happens online; it should be a service layer that unites a customer experience, smoothing out the buying process and allowing personalised benefits.
Get that right and you get the Amazon effect – where you buy something because you trust it’ll arrive, rather than because you've saved a few quid.