There is a palpable sense of optimism in the air on the British high street since non-essential shops and retailers have been able to open their doors again. The past 14 months have been unimaginably difficult for both the retail sector, and the collapse of high street stalwarts such as Topshop have permanently altered the tapestry of the high street as we know it. For those businesses reopening as lockdown eases, the mood is high.
Whilst it is fantastic for many to see bustling towns and city centres, it would be short-sighted for business leaders not to prepare for continued acceleration towards a digital future and a new digital era for retail. The rise of online-only retailers and the struggle of the UK high street to compete on their level may have been accelerated by the pandemic, but it was not caused by it, and we will certainly see this trend towards e-commerce and online shopping continue.
If there is a positive to be taken for these hard-hit sectors, it is the important lessons learned over the past year. The digital transformation of traditional shops, such as transitioning their offering towards e-commerce, has enabled these industries to gather huge amounts of useful data about their customers. If used properly, this new insight means they are better equipped to refine their marketing strategies now than they were before the pandemic.
The durability and growth of online retail giants like Amazon and ASOS have been one of the most evident trends of the last year, as these retailers have a strong understanding of the e-commerce market and robust customer data technology, and have benefited from the closure of many physical shops. In fact, in a recent report on this topic, we found that over half of retail, hospitality and leisure leaders believe better e-commerce data would give them the chance to compete with the UK’s largest e-commerce sites that currently dominate online shopping.
This is the moment for high-street retail businesses to fight back – and to do this, they will need to boost their digital capabilities to help them to hit the ground running and thrive as they reopen.
It is undeniable that a big part of e-commerce lies in a robust data strategy, something that the pandemic boom in online shopping has increasingly highlighted as a path to success.
Too often, retailers and hospitality businesses have plenty of first-party data, but lack the technical infrastructure to carry out effective analysis and harness it properly. In-person stores and restaurants have unique insights into their customer behaviour, choices and experiences, and can build a personal relationship with customers in a way that online-only stores cannot. Rather than viewing their physical presence as a weakness, brands must invest in their data capabilities to analyse and apply the insights from this data properly, connecting it with e-commerce activity to provide them with a more holistic view of their customers and their preferences.
Ultimately, this can support them to better target and reach their customers, helping them to justify their marketing spend through data-driven strategies, and maximise the use of the unique data that they can collect in store.
Yet to truly compete on a more even footing with online retail giants, brands can go further and connect their data with other trusted partners in a data collaboration – something which 29% of those surveyed in our recent Winterberry report are actively considering or have entered into. Through collaboration, brands can safely connect to a greater data pool, outside of their own first-party data, to deepen customer knowledge, deliver better customer experiences, and compete on a more level playing field with the likes of Amazon. Such collaborations enable retailers to better reach, serve and broaden their customer base, both online and in-store.
The contribution of the retail sector to the UK is crucial, and its importance has only been highlighted by their absence during the last year. Many of those businesses which have survived the lockdowns and are opening up now have dramatically improved their digital capabilities, but as digital transformation in every area of business continues to accelerate, they cannot stop there.
Businesses must be willing to continue to invest in their e-commerce and data strategies, which, paradoxically, can help them to make the most of their physical presence on our high streets. Over the next decade, data has the power to add billions to the UK economy, and by making better use of the data they hold, many businesses can ensure that they thrive as they reopen while providing a boost to the UK economy for years to come.
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