Advice to High Street Retailers: Adjust to consumer behaviour and think creatively about the shopping experience, if you want your business to survive.
Following today’s announcement that Marks & Spencer will close 100 stores by 2022, Dr Felicity Hardley, Senior Lecturer in marketing and business strategy at Westminster Business School, comments on why changing consumer behaviour means the sector should expect further woes this year:
“Today’s announcement, combined with recent grim news about the retail sector and household names in troubles – think of Toys “R” Us closures and difficulties for House of Fraser, Next and Debenhams, further validates that profit warnings, restructurings and more big name retailers highlighting their woes should be expected this year.
Consumer behavior has fundamentally changed and unless the retail environment adapts to not only these changes, but to fundamental shifts in the competitive environment, we may see more retail brands going under. We are moving into an experience economy where the customer journey is paramount. Online providers understand this and have engineered their whole service offerings to more adequately meet customer needs and expectations. Many existing retailers are still playing catch up and this may cost them dearly in the long run.
“The digital environment combined with growth in the proportion of digitally savvy consumers is making the creation of value more complex, particularly as more and more consumers look for specific products, segmenting the marketplace into more segments than previously thought possible. Digital marketers can tailor online offerings and communicate them to multiple and unique small customer audiences, however, it is harder for standard department stores such as Debenhams and M&S to create a value offering for an increasingly fragmented customer base.
As the ONS figures indicate, the department stores who have adjusted more to consumer behaviour around Mothering Sunday and Easter (greater digital demand possibly triggered by poor weather) and who have more closely considered consumer needs online, outperformed those that are yet to hit the mark.
“In the current tough environment, competitors need to think creatively about how to make shopping an entertaining experience, or at least an experience consumer will value. With the increasing use of social media consumers have less time to ‘shop’ and instead prefer to dedicate themselves to alternative leisure activities. Price matching online competitors is not enough. Retailers not only need to think innovatively to compete in both spheres, but they also need to think about how to ‘outlive’ rivals as there may always be room for a couple of high street department stores, but not enough for the number of competitors currently in the UK marketplace.”