The survivors of “retail hell” will be those that are prepared to change the way they think about customer experience
Reports of the death of the high street may have been
exaggerated in the past but the decline in shop sales versus the increase in
online sales reported over the Christmas period suggests that retail as we know
it could well be in its death throes.
After my experience in the January sales in London I can
only say the sooner the better.
What I learnt in a brief – but not as brief as it could have
been – trip to Oxford Street last Sunday and a spot of grocery shopping on New
Year’s Eve was that our tolerance of poor physical retail experiences is
lessening, particularly when the online version is so much better.
What’s wrong with shopping?
Where do I begin? Let’s start with everyone’s favourite
department store, John Lewis, on a Sunday afternoon. At the height of the sale
season we were pleased to snap up a new mattress as a clearance bargain. We’d
originally gone in to try out a Simba Sleep mattress – which you can buy online
and return if not happy: now a standard with the new entrants (see also Casper,
Eve and others) – but ended up with a different make at a clearance price which
was more comfortable, albeit not covered by any guarantee should our in-store test
proved to have been inadequate.
I get a bargain and a try-before-you-buy stage in the customer
journey so what’s wrong? Well not that
much if I’m honest, although I got a definite sense from the store assistant
that he’d rather have been able to upsell to one of the many more expensive
items on display (he could have helped me feel a bit happier about picking up a
bargain instead). The trouble really started when we descended to the kitchen
shop in the basement in search of a new pair of kitchen scales. As a keen cook
and a bit of a kitchen gadget fan, I’ve previously spent happy times ambling
through John Lewis kitchen shops, but something has changed since the last time
I went to the Oxford Street “flagship” store. It proved tricky to find the
right area and, when we did, the shelves were in such a mess that it took quite
some time to work out what scales were available and how much they were.
On the basis of this second experience, online would have
been much better – although it still took me a while to find the kitchen scales
section on John Lewis’s website – and I could have bought my new mattress
online as well, albeit at a non-clearance price.
Food, glorious food
Most of the time we shop online for food, via Ocado – it
saves time and petrol cost – but it requires advance planning. In preparing for
a New Year’s Eve dinner I needed to go to a local mall and that other bastion
of British middle-class grocery shopping, Waitrose (part of the John Lewis
Partnership). One missing ingredient required a trip to Sainsbury’s supermarket
a short walk away. I found my missing spice but then had to wait in line whilst
what appeared to be a large section of south-west London queued to pay at the self-service
tills. There’s no way these are going to give you the kind of pleasant interaction
on a standard check-out aisle that I’d had pre-Christmas in the same store – “unexpected
item in bagging area” is hardly the basis for a great customer relationship.
Most of the time I end up having to wait while a harassed assistant confirms
that I am over 18 and can legally buy alcohol. My New Year’s Eve purchase was relatively
smooth but the overall experience – albeit at peak time – was stressful.
Back to the Future?
There was a time when a trip to the shops was a relatively unhurried
affair. Growing up in a small town over half a century ago I remember getting
most of our food from a short trip to local shops. It wasn’t something full of
magic moments as I recall but nor was it particularly stressful even when the
local supermarket was involved. And my mother, who I was usually accompanying, would
stop and chat to friends, neighbours and shopkeepers in the course of her expedition.
Of course, there was no competition from any other shopping
channel in those days, just the choice between a few local shops so you can’t
really compare it with our price-driven online interactions. However, leaving
wistful reminiscence aside, the past has some lessons for the future of physical
retail: shopping in those days was friendlier and less hurried. But if online
can take away the need to stand in crowded shops or searching in vain for
unavailable items what’s left on the High Street?
The answer is to forget about selling – at least in the same
quantities as online – but to view the online and offline worlds as complementary
rather than competing. Let’s look at a couple of retailers under threat from
online competition: bookseller Waterstone’s (thriving) and music/video retailer
HMV (filing for
administration). I’m a customer of both, but in ways that illustrate this
I spent a couple of hours in Waterstone’s Piccadilly branch at
the weekend where I combined coffee, book shopping and a pre-dinner cocktail. The
branch has three food/drink outlets and several floors of books and I based
myself on the top floor café/bar with occasional forays to the book
departments. So, my visit to the store is more about an overall leisure experience
than a targeted piece of book shopping (which I could have done via Amazon or
other online retailers). Waterstone’s still hasn’t integrated the online world
very smoothly: one of the books wasn’t in stock and I declined the offer of ordering
it as I figured I could do it online. However, I bought other books in the
store so there’s no reason why the order couldn’t have been linked to my other
purchases and offer a discount, securing more of my expenditure versus Amazon.
At HMV the threats are more extreme – we still like physical
books for reading (versus eBooks) but are less enamoured of CDs and DVDs for
audio/visual product – but the response has been less adventurous. My local HMV
store also contains a branch of independent cinema chain Curzon. The cinema is
one of the best in the area – a good choice of films, comfy seats, great sound
and a good café/bar – but the degree of integration between the two is non-existent
despite branding the venue as hmvcurzon. On the other
two floors of the shop the offering is a traditional retail one: racks of CDs, vinyl
and DVDs with various add-on products such as t-shirts.
Curzon is, as far as I can tell, thriving: the cinema
experience is good and, as a distributor of independent films, it also offers a
streaming service. Like many other cinemas it also offers live broadcasts of
concerts, theatre etc. This move towards content and experience appears to have passed HMV by. Just as bands now
make money from gigs rather than record sales it doesn’t require too much
imagination to think how HMV might have evolved into a live experience provider
– with links to related merchandise and streamed content – rather than remaining
as a shop selling stuff that fewer and fewer people have a need for.
I’m not going to make any predictions for the future of high
street retail other than to say that a better understanding of customer
outcomes is required. If you view your customer’s outcome as “buy some stuff at
an acceptable cost/convenience level” then you’re operating within the
traditional retail paradigm. With online taking up an increasing proportion of shopping,
that cost/convenience offer will need to be pretty compelling to cover the cost
of high street property.
But if you view the customer’s outcome as “feel part of the
community” (my experience of 50 years ago) or “have a great time with
friends/family” (my recent Waterstone’s/Curzon experiences) then you might view
the proposition you offer quite differently. In my little corner of south-west
London, the number of coffee shops – both independent and chain – has doubled
over the past 12 months and they are all busy: that points to a need that
people have to get out into their community (even if it’s to sit hunched over a
laptop with headphones on).
I’m not saying all shops should have a café attached. Retailer
WHSmith provides a dire in-store experience (occasionally including a coffee
vending machine) but it doesn’t prevent them achieving
high performance, particularly given a focus on travel-related outlets
(where leisurely browsing isn’t part of the experience). However, for most
retailers, asking what’s missing from their customers’ experience and taking
action to reinvent their outlets accordingly is the best hope to keep the high
It’s also a highly complex area and different solutions will
apply in different localities – what might work in Wimbledon may not play so
well in Warrington or Wigan. We’ll be returning to this theme in subsequent
articles and inviting other people to contribute. If you’ve got direct
experience in this area we’d love to hear your views.