14th January 2019
High street retailers are finding it increasingly difficult to compete with their online counterparts. Established web giants such as Amazon, and newer entrants such as ASOS, have revolutionised the way we shop. It is now easier than ever to order items: with one click of a button, your order can be with you in under 24 hours and returned just as quickly. And without the costs of physical stores, they can significantly undercut the high street.
In December, Mike Ashley, CEO of Sports Direct, called for something “radical” to be done to save ailing retailers. With over 200 years of history, the great British high street has always had to adapt to shifts in consumer behaviour. To meet this latest challenge, bricks and mortar retailers can outsmart their web-based rivals by identifying new revenue streams, growing their existing brand-loyal customer base, and utilising their physical premises to become hubs and meeting places for their local communities.
Identify secondary revenue streams
Recent research reveals that over 70% of UK retailers use secondary revenue streams to boost profits. This can include in-store advertising and monetising excess retail space.
Subletting under-utilised retail space to third parties can increase footfall and spend from customers. Additionally, platforms such as Stashbee and Stasher work with a network of shops to monetise their free space by renting it out as a self-storage facility or to enable travellers to store their luggage for a short period of time. Stasher currently operates in 18 cities around the UK and has stored over 100,000 pieces of luggage cumulatively.
Courier services, such as DHL and Hermes, operate a pickup and drop off parcel service for third parties. DHL has 1,200 service points in the UK and works with over 350 high street stores nationwide. These local retailers include household brands such as Robert Dyas and Ryman.
Build an army of brand ambassadors who are invested in your success
Retailers can tap into the loyalty of their existing customer base by with a peer-to-peer loan. Alongside access to growth finance, one of the main benefits of allowing your customers to participate in a debt raise is to consolidate relationships with your supporters. These advocates can help amplify the message of your physical retail business through word-of-mouth and social media. Accessing debt from the crowd can also drive increased revenues by raising awareness to new potential customers, as well as creating an opportunity to offer discounts and promotions to existing ones.
Create a brand temple
Mary Portas, who led a government review into how to revive the high street, recommended for brand-led retailers to create a retail environment based on experiences and unique products.
Supreme, an American skateboarding shop and clothing brand, is able to create a buzz and drive significant footfall by selling limited edition items through pre-scheduled product “drops”. This often leads to queues of excited customers snaking down the street, eager to get hold of the latest product, reinforcing the off-line subculture of skateboard fashion fans.
Alternatively, the likes of Nespresso and Dyson use their retail spaces to create retail experiences to showcase unique elements of their brand. Nespresso has a handpicked selection of stores in which customers are given a curated and bespoke coffee sampling experience, with stylish decor and furnishings. These experiences lead to greater customer enjoyment of the product and therefore loyalty.
Embrace your local community
Making your retail space a hub for the local community can result in increased engagement. The large supermarket chains and numerous independent bookshops now serve coffee or have a coffee retail space on premise. This creates a meeting point and encourages customers to enjoy spending time in the store.
For example, the social enterprise Goldfinger Factory is a craft store and cafe, who have focused their business around the local neighbourhood. By running events, workshops, and charity initiatives they have become part of the lifeblood of the community.
There are also initiatives for independent retailers, such as Small Business Saturday. This is an annual event encouraging shoppers to use local businesses. It is estimated that the 2018 event resulted in customers spending £812 million at participating businesses. Businesses can sign up to the initiative here.
The High Street Report, published last month by the Government, wants the £675m already announced in the Budget for High Street improvements to be spent at a local level to improve public spaces and transport links. As the retailer, Sir John Timpson told the BBC Breakfast Show, "it's not just about shopping, it's about communities and creating a hub for entertainment, medical facilities, housing”— something online retailers can never offer.
