This article is part of Raydiant’s new Future of Retail series which interviews the world’s leading retail experts to better understand how the industry has evolved and most importantly, where it’s headed.
The following is from an interview with Diane Wehrle, Marketing and Insights Director for Springboard
What personally excites you the most about the retail industry?
DW: I have been involved in the retail industry my entire life – my parents owned retail stores and I have worked in retail consultancy, data and insights for 30 years – and the overriding thing that excites me is how the retail industry both drives and reflects social change. It mirrors the shifts in society and how we live our lives, and whilst the bricks and mortar environment itself doesn’t necessarily change rapidly due to the constraints attached to changing the built environment, the propositions and operators that trade within them shift as tastes and customer demands change. Indeed we are likely to see this occur to an even greater extent as we recover from the Coronavirus pandemic and the lockdown that consumers are subject to. Some stores will struggle to reopen and among those that do, there may well be some that simply don’t reflect the changes in consumer behaviour that are likely to be outcome of such a fundamental shock to the economic system.
What has been the most dramatic change you’ve seen in the industry over the past 3-5 years?
DW: Even before the Coronavirus became an issue undoubtedly the most significant change that I have witnessed has been the closure of major bricks and mortar stores in numerous locations across the UK. We have known about the trading challenges that many large multiple retail operators have been facing for a number of years, however, the fact that they have been unable to meet these challenges whilst retaining their store numbers is having a significant impact on the retail landscape. Many retail locations have already experienced the closure of all of their large anchor stores, which means their function – how consumers use those locations and the footfall they generate – is changing. This change will exacerbate as time passes, particularly once the impact of the prolonged store closure as a result of the lock down starts to bite.
What are the top trends you see shaping brick and mortar retail in the next 3-5 years?
DW: Online has created a huge transparency around price, and the convenience of online means that those who shop in store demand an enhanced experience. Retailers need to be able to evolve to ensure their bricks and mortar networks offer the experience that customers now demand, whilst maintaining the requisite margin to ensure their longevity. Inevitably this will demand even greater cost control, alongside the development of a true multi-channel retail operation which maximises the value of their bricks and mortar network. Indeed, the importance of having an effective online proposition has been borne out during the lockdown; and whilst the jury is still out on the eventual impact on consumer behaviour, at the very least it is likely to mean that a far greater proportion of consumers will be more familiar with online purchasing.
What technology do you believe will have the biggest impact on the retail industry in the next 3-5?
DW: The breadth of technology impacting retail is staggering, however, largely it hasn’t yet fundamentally changed the in store shopping experience – stock is often still absent, queuing to pay is still prevalent, environments are often lacking and upselling isn’t an integral part of the process, all of which are improved or eradicated online. So it is technology that shifts the store experience to be equal to the online experience – thereby reducing the barriers to purchase in store – that will have the biggest impact. Indeed, this is going to be a critical factor for retailers in the post-pandemic period if they are going to be able to differentiate themselves from their competitors.
What’s the future of brick and mortar retail?
DW: Before the Coronavirus outbreak, I was convinced that bricks and mortar stores will always have a future in retailing, and I remain so. The vast majority of spending remains in store – before the pandemic, it stood at around 80% which is the strongest indicator possible of the ongoing demand from consumers for an in-store shopping experience. As human,s we crave social interaction and one very likely outcome of the enforced restriction could be a bounce back in demand for bricks and mortar stores. However, given the rising demands of consumers in terms of price and convenience, the long term future for bricks and mortar retail may still lie in stores broadening their role to function as more than simply transactional locations and instead as community hubs.