We’ve all heard about retailers such as HMV, Jessops and Blockbusters going into administration in recent months. As numbers of retailers entering administration rise, it has become apparent that the in-store business model is no longer enough to survive in the world of retail. For instance, it’s been reported by the BBC that Hilco UK has taken control of HMV who were £176 million in debt. Although originally theorised for species continuation, Darwin’s theory of survival of the fittest can aptly be applied to retail, especially with the increasing competitiveness of the industry.
In the world of commerce, whether it is traditional, e-commerce or m-commerce, competition is fierce and many retailers are evolving and adapting to better serve their customers, eventually rewarded by increased customer acquisition and retention. Yet those who delay developing into the next generation of retail are left behind, struggling.
The debate over the impact of online shopping on the High Street has created a lot of noise, from newspapers (both physical and digital) through to Question Time on BBC 1. However, it appears that rather than abandoning the high street altogether, the transformation from a single-channel shopper into a multi-channel shopper is on the rise, retailers are ultimately responding to the customer.
There is a common misconception that ecommerce is ‘killing’ the High Street, however retailers such as John Lewis have shown that when used strategically, ecommerce can strengthen your in store campaigns. Features such as click and collect encourage your customers to visit your store as well as online. Offering this additional delivery option helps the customer choose the one to match their lifestyle. This choice is now expected, almost demanded, by the customer; in the same way that next day delivery was innovative, it has now become the norm. Most recently, a 60-90 minute delivery service by Shutl is creating a stir, again offering the customer fast and efficient delivery options to fit in with a chaotic daily life. No longer are the shops dictating when customers can buy things, the customer holds the power and if the retailers aren’t prepared to adjust with this movement, it can have devastating consequences.
Returning to the retail casualties of 2013, when announcements emerged that HMV and Blockbuster were going into administration, the responses of many were ‘it’s not a surprise’, this is not coming from industry experts but the companies’ target audiences. Knowing the buying habits of your customers and the expectations they hold can assist your pursuit for success in retail. Blockbuster openly blamed its online competitors for its failure, referring to competitors such as Love Film, Netflix, and more recently, Sky’s Now TV. The ability to have on demand entertainment without leaving your own home appeals strongly to Blockbuster’s target audience; with the company more famous for the late charges they enforce than the variety of films and games available to rent.
Similarly HMV, a DVD and CD music store, found themselves competing against downloadable media and on demand services, with retailers such as iTunes and Spotify succeeding in the market. Not adapting to the advances in technology and customer demand can be damaging to the long term success of a business, it is those who are ahead of the curve rather than chasing it that report of sales on the rise. Therefore, with 75% of music and film being downloaded, not having a digital platform integrated into their business model clearly play a big part of both of these companies’ downfalls.
There are numerous statistics to contradict those who say online retailing is ‘killing’ the High Street, with the likes of House of Fraser seeing an increase of up to 48% online and Hobbs with a 60% rise in sales. It is apparent having a strategic online presence which appeals to your customers can play a part in your success as a retailer in the industry and on the High Street.
So was Darwin correct with not only the evolution of the species, but the evolution of retail too? That is for retailers to decide. With many industry experts making predictions for retailers whose sales figures indicate a struggle already; will they be able and willing to adapt quickly enough to reverse their fate?
Metakinetic is a full service ecommerce agency founded in 2005. Based in Wokingham, Berkshire, with a team of 18 specialists, Metakinetic provides creative, technical and marketing services to a wide range of online retailers.
Focusing on quality, support and delivering results, Metakinetic helps its clients increase ecommerce sales and reduce operational costs. Metakinetic has worked with clients that include Daily Mail Shop, River Island, 118 Golf, Sohos, Laverstoke Park Farm and the award-winning sports bra site, LessBounce.
Metakinetic won an ECMOD Ecommerce Supplier of the Year Award, appears on the Recommended Agencies Register (RAR) for achieving a high level of client satisfaction, was ranked 25th largest digital agency in the Wirehive100, and shortlisted for a fast growth award, and has staff members that write for a variety of industry publications, including Econsultancy, Direct Commerce Magazine and Digital Marketing Website, Fourth Source and has been involved in judging the Web Marketing Association’s WebAward. Metakinetic is also one of the founding companies of Berkshire Digital, a Berkshire-based non-profit community that organises events for businesses interested in all aspects of digital.
Metakinetic is a Microsoft Gold Certified Partner, Google Adwords Certified Partner and a Znode Gold Implementation Partner.