Retailers have collectively spent many millions on digital change. The impetus has come from every direction, but fundamentally it is about consumers becoming ever-more mobile and connected, with online spending rising exponentially.
Digital retail technology has developed at the rate of knots, presenting too many shiny new directions and tools to count. A raft of new competitors arose with fresh ideas, dismissing long-held assumptions and challenging retail’s biggest names.
Yet, despite the millions, and the clever ideas, many traditional retailers still face uncertain futures; customers aren’t flocking back as they hoped. Digital was supposed to ensure survival through tough times and for the future – but that future is at risk. Why – and what can they do about it?
The concept of digital disruption is now familiar. Most retailers have made significant adjustments to compete: building impressive online presence, embracing social interactivity, and adapting processes for fulfilment.
Some brands didn’t adapt, and fondly-remembered entities like Woolworth, Austin Reed, Comet, MFI and now BHS have gone to the great retail park in the sky. The pundits bemoaned the fact that such brands hadn’t adapted to the digital age, that their vision was stuck in the high street. But, if today’s survivors are those which have made the adaptation to a digital age, why, then, are retail boards everywhere still so stressed?
It seems that no matter how impressive an online presence, how many staff have iPads, how many are tweeting and facebooking, or even how much tech you install in-store, customer attraction and engagement in a digital age isn’t easy.
Yet the pressure is on: retailers must maximise margins for survival – that means driving out cost, boosting process efficiency and, critically, engaging better with customers everywhere. Digital is the way to go, surely?
Retailers have unquestionably made vast efforts, in addition to moving online. They have invested to engage customers in new ways: from kiosks to deliver online services in-store, to augmented reality changing room mirrors, to iBeacon broadcasts to push special offers… the high street is becoming a very technical place.
The digital frontier of retail advances daily. Digital and experiential stores emerged in the US, but are now common. From Samsung’s New York 837 which enables immersion and experimentation with products, but doesn’t sell any, to Westfield’s Jaguar/Land-Rover store which targets pure brand engagement, not sales, retailers and consumer brands are all seeking the secret sauce of digital success.
But shoe-horning digital technology and ideas into current business models isn’t enough. Retail innovation labs have sprung up – Tesco, Argos and Boots are just some who have invested, while John Lewis’s ‘JLAB’ startup accelerator scheme even helps to boost new retail businesses. Yet these can only go so far – and major disruptors such as Amazon are investing significant funds to ensure they stay ahead of the curve.
Gadgets don’t drive purchases – and marketing fame you gain doesn’t always drive long-term sales. Disconnected digital experimentation creates digital blind alleys that often lead nowhere.
If part of surviving is winning against the very disruptors that are ahead of the game digitally, then understanding them is vital:
Successful disruptors do things differently - they don’t just do the same thing digitally. Take The Chapar,a rising menswear brand with a growing fan-base via its online personal stylist approach that Austin Reed could never have delivered via traditional outlets.
Retailers who succeed in a world where customers think differently must do things differently themselves:
A future proof digital strategy requires a fresh vision that truly articulates what the brand and business needs to be in the future, not just where and how it will deliver.
Strategies themselves must have adaptability built in – because things change faster all the time. It means innovation can no longer be an add-on to the strategy, nor a vague aim – it must be in the core.
Digital development can no longer be a side-project, but must move to the heart of business strategy. It means revising some assumptions about propositions that truly meet the needs of a multi-generational, connected, demanding and diverse customer of the future – not of the past. Above all, it will require real alignment and recognition at board level that the future of the business is different from its past.
In our recently released Connected Shoppers Report, we asked more than 4,000 adults across three key markets a variety of questions about today’s retail shopping experience. Check out this new report to see what they had to say, and use it to help shape your own vision for a digital retail future.