Fuelled in part by e-commerce grabbing an ever growing cut of consumer spending, high street retailers are going out of business at an alarming rate. James West thinks the battle for customers could eventually see web-only traders addressing their only weaknesses by making use of our vacant retail space, and in doing so transforming our town centres for good.
ecommerce is currently enjoying a huge growth spurt as this research confirms. For all the advances in personalisation, the addition of peer reviews, self-service support and fast shipping options, there are two areas where shopping in a physical store will always trump e-commerce:
1) Fulfilment/returns. No web business can match the immediacy of a store for purchasing goods and taking them home right away, the same is true for returns.
2) Hands-on browsing. Certain products (media, consumable electrical goods, books) may not require interaction, but clothes, furnishings and big ticket items such as TVs are hugely enhanced by physical proximity of the prospective buyer.
I begun thinking about these two seemingly insurmountable online retailer problems during a conversation with a colleague about what UK high streets and shopping centres will look like in a few years time. With Pumpkin Patch joining La Senza, Blacks, Past Times and Peacocks in administration in the last few months, the line of retail casualities is growing and the trend is too great to simply blame on the recession. With consumers increasingly choosing the cheaper, more convenient web shopping option, customer culture is irreversibly changing.
We are already seeing high streets transforming, with the influx of bargain, pound-shops, mixed with growing numbers coffee and food outlets. Town centres are reinventing themselves by revisiting the past and become community destinations where people socialise and browse for unusual items they wouldn’t think of buying online. We must also consider that some retailers have already embraced this community concept. Apple is a great example, building hubs for its services that allow customers to try before they buy, surf the internet, seek advice and buy products. HMV, although still in a precarious position, has so far stayed afloat by taking the same approach, building its proposition around trying and buying headphones and hot consumer products such as speaker docks and tablet computers. Like Apple stores, HMV has become a popular hang-out for young people, who not only spend money but elevate the atmosphere - customers tend to buy more in lively environments.
It is logical that online retailers - well accustomed to pioneering technologies and trying new things to attract and retain customers - may well investigate bringing some of these ideas together. Returning to the point made earlier about the two main disadvantages that e-commerce retailers have, doesn’t it make sense for them to create retail spaces? Amazon has already introduced the dropbox concept into London to address the delivery and returns issue, but what if it, or indeed any online retailer, opened physical locations? They would instantly have a recognisable destination for customers to action returns and pick up orders. They could showcase key products, run workshops demonstrating technologies, host book signing and run in-store band performances. They could sell food and drink, offer free wifi and even access to tablets which allow customers to make online purchases while in-store. The opportunity to build lasting customer relationships by exploiting the best of both worlds is clearly there for those willing to take the lead. With an ever increasing volume of unused retail space driving down rents, this seemingly radical step could prove to be fairly low risk, but yield huge returns.
Like all businesses, the way retailers interact and connect with their customers is changing at a furious rate. We’ve known for some time that differentiation through price and product is virtually impossible because of saturation, meaning that customer service has rightly become a much bigger priority for businesses wishing to stand out from their competitors. However, efficient, timely service is just one part of the picture, the customer experience has become the bigger goal. And what better way to nurture the goodwill and online communities that web-retailers have created than bringing these like minded-people together to drink coffee, swap stories and transform the way we think about shopping?
James West has written about the customer service industry for more than 12 years, editing titles such as Customer Service News, Call Centre Focus and now Customer Service TV.
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