It’s tough out there, but there’s a bright future for Retail
Reading the news recently about the demise of the Arcadia Group and Debenhams, on top of the effects we’ve seen from the pandemic, you’d be forgiven for feeling pretty despondent about the state of retail – the debate around the future of the high street which was already a hot topic pre-2020, has only accelerated in a year of massive change. Lockdown pushed footfall through the floor, shops are closing and consumer confidence is low.
However, with news of a vaccine on the horizon and a path back to ‘normal life’ firmly in sight, my hope is that the effects of 2020 on the retail landscape can be viewed as a short, sharp shock with the opportunity to learn, affect change and come back stronger in 2021. There is a pathway to success for retailers and brands who choose to embrace change and stay laser-focused on their customers.
With that in mind, there are a few key areas that have come into sharp focus this year, that can help navigate through the challenges:
The power of the brand
A number of retailers have put a great deal of energy behind fine-tuning their brand’s values and shouting loud and proud about them, in order to drive affinity and loyalty from their customers. With 64% of consumers saying their purchasing consideration is driven by a company's ethical values and authenticity (Accenture), this is no longer just CSR wallpaper - it should be viewed as a genuine differentiator for retailers to drive commercial advantage. The caveat being that this needs to be done in a genuine and authentic way – The Body Shop have embodied this for decades, but retailers like Timpsons have stepped up and shown real leadership in this area in 2020, while Sainsbury’s’ firm commitment to social justice is a powerful, recent example that springs to mind.
Listening to consumers and observing trends is as important as ever here – with 56% of consumers striving to shop more locally and mindfully (Accenture), retailers will need to be seen to be playing a role in their communities in order to maintain a positive position in the minds of their customers.
Retailers should be asking themselves – do our values reflect the society we live in now, do we embody those values consistently throughout the business and does that come through in our comms and brand TOV? Customers aren’t just buying from retailers, they’re buying into them.
A seamless channel mix
After a frustrating year of lockdowns and intermittent closure of retail stores, shoppers will undoubtedly be keen to get back to the high street and embrace the hustle and bustle when the time comes. “The resurgence of local high streets and the steady successes in certain sectors shows that consumers still want and need to visit shops and leisure operators. Because of this, there is still a future for physical locations.” (PWC)
However, what has been made abundantly clear this year is that any successful retail business will also need a strong online operation alongside their physical presence. Everyone has seen the eye-watering revenue numbers for Amazon this year, but with us all glued to our phones more than ever, social commerce has also accordingly picked up as an alternative access point. It is forecasted that by 2021, the global social commerce market will increase by about 34%. This has offered a new way of shopping, arguably one that offers a bridge between the transactional nature of Amazon and the more tangible experience of physical retail.
Our clients are telling us that it’s not as simple as saying that any loss of physical sales can be offset by online sales, that’s not the case – physical retail is still a huge priority – but the point is that a joined-up, complementary channel mix that embraces innovation is absolutely key. You only have to ask Primark who resisted the need for an online presence pre-COVID, but are now seeing that gap in the mix causing serious issues.
A focus on experience and the role of emotion in the path to purchase
While traditional online shopping largely focuses on convenience and low friction, these are not necessarily ways to create a lasting, memorable experience. One of the jobs for reinvigorating retail in 2021 will be to remind shoppers of the moments they have missed that are unique to physical retail. As our Planning Director Gavin Silsby noted last year: “By shifting focus from the transaction, retailers can offer environments that reflect the fundamental motivations of today’s shoppers. From Instagrammable installations to lifestyle classes and cultural curation, best-in-class bricks and mortar retailers are offering genuine customer value.”
To ensure we are meeting customer needs across the path-to-purchase and injecting emotion into the journey, Haygarth look to provide retail experiences to meet three core drivers:
- Revelation – Providing culturally relevant knowledge or expertise to increase brand equity and aid discovery of products
- Recommendation – Curating choice based on personal need, trends or popularity to assist selection and provide confidence to purchase
- Recognition – Delivering socially valuable moments to extend store or product experience into wider channels
A focus on experience will remain paramount if we want to elevate retail stores beyond a functional purpose, but in a post-COVID world, there will be a new consideration to wrap in: shoppers will be looking to retailers to demonstrate that they can offer protection and safety first and foremost. Kantar’s research has noted that “as consumers’ awareness for their own safety has heightened, they expect the same with brands on the products and services they offer.” So while the focus will inevitably shift back to physical experiences, retailers need to build back trust with their shoppers.
While none of the 3 points above are ‘new news’ as such, they demonstrate the importance of sticking to core strategic principles of retail marketing throughout a crisis, rather than looking for tactical quick fixes. They also demonstrate the need to embrace agile working models centred around customer trends, behaviours and motivations. 2020 has been a period of turmoil, but there are reasons to be optimistic for a bright future.
Written by Alex Palmer, Senior Account Director