For the past three years we have been researching a survival strategy which we are confident can be used successfully by retailers of any size, sector or location to overcome the current challenges facing high street stores.
Since 2015, we have been playing a unique role in retail, sourcing UK-made products for stores that want to introduce newness and variety whilst also providing a route to market for emerging British brands. The intelligence we have built up over that time has delivered some powerful messages about how to do retail well and what the store of the not-too-distant future will look like.
In the first of a series of articles on retail survival, we look at what’s happening on the high street and some of the reasons behind the so-called retail apocalypse that saw 5,855 store closures in 2017.
Why It’s Happening
The majority of retail analysts blame a combination of economic factors and online purchasing trends for the current high street Armageddon. Our own research has found that there are three other key factors at play: The unique consumer behaviour of Millennials and Generation Z, the drive for experience over product and the relevance of Barbara E Kahn’s Kahn Retailing Success Matrix (The Shopping Revolution: How Successful Retailers Win Customers in an Era of Endless Disruption [Wharton Digital Press, June 12, 2018]).
Buying without borders
According to retail think tank Fitch, Gen Z will be the largest consumer group globally by 2020, making up 40% of buyers in the US, Europe and BRIC countries. Accustomed to multi-tasking on a variety of technology and applications, retailers will only ever have Generation Z’s partial attention and need to work hard to attract even that. Crucially, they do not see online and offline as separate platforms; there is no border between their digital and physical world.
Everyone from Baby Boomers to Gen Zedders is focused on experience these days. For each electrical store or clothing outlet that disappears there is a new bar, restaurant, escape room or whatever materialising, ready to capture the spending capacity of those who now rate time with friends and family over new material possessions.
Doing everything well
Retailers can no longer rely on being good at one or two things to survive. Barbara Kahn’s now famous matrix highlights brand, low price, experience and frictionless convenience as the four pillars of a good retail strategy. It used to be the case that the best retailers were those that led clearly on one of these four pillars but, today, retailers need to do them all well and they need to be exceptional at two of them.
In our next article we’ll look at who is doing well and why. Stay tuned to find out more. For a copy of our white paper, ‘How to Survive this Retail Apocalypse’, email: firstname.lastname@example.org or download it here.