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With Debenhams announcing its latest profit warning this week, Yoyo CEO Michael Rolph suggests it might well be the end of the road for the high street unless retailers get serious about combining technology with customer experience…
Debenhams’ latest profit warning highlights that the high street really is in a bit of a desperate state – another story that follows an every-growing list of retailer announcements around store closures or total disappearance from our high streets all together.
I think there are three reasons why, over the past two years, we’ve seen an accelerated downward spiral on our UK high streets.
We’ll start with Brexit (yawn).
Look at the situation that’s going on out there and you can’t help but recognise that consumers aren’t feeling quite so good about what they want to spend their money on – uncertainly is in the air and in uncertain times consumers tend to save money rather than spend it.
Then there’s tax.
About a year or so ago there was a huge rate review around the taxes that retailers and shop owners had to pay relative to the space they occupy. Any margin that retailers had become used to making up until that point was pretty much overnight eroded – and we’ve seen this manifest itself with a number of recent high profile announcements, as well as Debenhams.
And of course, there’s the rise of online shopping.
When you look at the onslaught of the online behemoths over the last 20 years, it’s easy to see the massive generational shift in the way we want to consume services and products that have historically been the mainstay of the high street.
The online retailers have been kicking ass right under the high street’s nose quite simply because they’ve provided a better logistical experience, ensuring that consumers get the items they want in a more timely manner. This becomes more and more pertinent for the high street now because, 20 years on, online retailers are really beginning to perfect these experiences.
Just think of how we now choose to watch something on Netflix (I’m going somewhere with this example) – all those programmes we watch have been recommended to us based on what we’ve viewed historically.
This is exactly the type of competitive advantage that online retailers now have against the high street – they know who they’re customers are, they know what they’re looking at, and they know when and what the customer has historically bought with them.
Until we see this level of insight around all transactions in the physical world, high street retailers simply won’t have a chance.
For this to be achieved requires technology, which is still seen by too many old-world retailers as a cost rather than an investment – a major reason why some really big high street names have fallen, while more nimble competitors were busy ploughing money into tech-led customer experiences.
It’s not too late, just…but any modern day retailer that has a physical infrastructure needs to be quick to adopt new technologies if they are to find a high street model that will work in 2019 and beyond.
If there’s anything you think we should be discussing in future Rolphcasts, email us at firstname.lastname@example.org, with the subject line “Rolphcast”.