Even in 2017 the summit of technological innovation appears to be free WiFi for many high street stores. To be clear I'm not an advocate of pointless gimmicks, but I can't help feeling pretty bored by the in-store experience of 99% of the high street shops who are slowly being left behind by consumers who want more. Technologically, most high street stores appear pedestrian with little or no real innovation for consumers. Brands often talk up a big game, but in reality, there are few genuine in-store 'wow' moments; no real innovation exciting or enticing customers, and precious little in the way of diversion to increase footfall at high street locations.
This complacency, which appears all too common, will rapidly manifest itself as a massive issue for high street stores. As consumers enjoy more reasons to shop online, in retail parks and in malls, the unpalatable but potentially inevitable result is town centre stores closing down unless brands change their offer. According to the Centre for Retail Research, total store numbers will fall by 22%, from 281,930 today to 220,000 in 2018. Job losses could be around 316,000 compared to today. Significantly, the share of online retail sales will rise dramatically from 12.7% (2012) to 21.5% by 2018 or the end of the decade. The Centre also believes that there will be a further 164 major or medium-sized companies going bust resulting in the loss of 22,600 stores and 140,000 employees.
The high street's biggest offline competitor is undoubtedly retail parks and malls who have transformed, and are now satisfying the contemporary consumer's thirst for leisure. In the here and now, people want to enjoy their leisure time, and they want that time to include the option to shop, not the other way round. Most people actually go out shopping to eat and drink rather than just shop. Retail parks and malls provide an all day leisure experience which can be enjoyed by the whole family. Omnichannel retailers are aware that high street shopping is on the decline but many fail to try and leverage online footfall by driving shoppers into stores through mechanisms such as click and collect, or digital coupons that can only be redeemed in-store. Even more worryingly they are failing to reduce their reliance on high street locations in favour of high footfall, in-mall positions. CACI believe leisure-dominated retail trips have increased by 28% over the past two years, with food and beverage spend rising 15% between 2013 and 2016.
Online virtual fitting room technology is now available, providing reassurance to consumers who would have felt the need to go in store to try on clothing before purchasing. eBay's strategic acquisition of PhiSix was a game changer especially as online clothing retailing is predicted to skyrocket. PhiSix's groundbreaking graphical know-how enables online consumers to appreciate the fit and drape of clothing on digital avatars. Shoppers experience the movement of selected clothing in an amazingly real and impactful way. Disruptors like PhiSix are making the need to go in-store to try on clothing less important, which is bad news for bricks and mortar fashion retailers, especially if they operate predominately through high street locations. On the plus side, if a consumer feels confident that what they see is what they will get, the need to buy an item in multiple sizes in the hope that one size will fit perfectly will no longer be necessary, reducing the knock on returns processing costs usually absorbed by the retailer.
In order to mitigate these challenges, Digital leaders need to feel empowered to explore how the right sandwich of technology derived creativity could provide in-store theatre to pull customers back into stores to combat ever downward spiralling footfall. One of the biggest obstacles to this much-needed progress is unfortunately the old-fashioned mindset that every square foot of in-store space should contain merchandise and be heaving with closely packed rails. This antiquated attitude isn't helpful to digital transformation leaders who are daily battling their thirst to experiment and innovate, against the tide of complacent boardroom "This is how we have always done it" dogma. In-store density and product non-differentiation has the effect of driving shoppers away, precisely the worst outcome during Brexit fuelled market conditions for hard pressed high street stores.