Monday, February 13, 2017
High street businesses saw footfall rise over the Christmas and New Year period. But with consumer habits changing, how can they remain sustainable in the long term?
After a testing few years, high street retailers enjoyed a positive end to 2016, with footfall levels rising.
According to research from the British Retail Consortium (BRC [SC1]), footfall climbed by 0.8% in December, when compared to the previous year. That meant the high street outperformed the wider retail sector and achieved its first positive December growth since 2011.
The findings will be welcomed by high street firms, given the demise of major players such as BHS and Woolworths since the economic downturn. But with the public’s appetite for online and mobile shopping showing no sign of abating, how can bricks-and-mortar businesses ensure they remain sustainable long into the future?
Mixed fortunes for physical retailers
Despite the bounce-back witnessed on the high street, physical retailers faced mixed fortunes overall as 2016 drew to a close.
Across the wider industry, the BRC said footfall was down 0.2% between November 27 and December 31. That represented a significant improvement on the 2.2% tumble recorded towards the end of 2015, but it was the fourth monthly decrease in a row.
Away from the high street, retail park footfall was 0.7% lower year-on-year, while shopping centres experienced a 1.9% dip.
In light of the mixed results, BRC chief executive Helen Dickinson warned that physical retailers must respond to shifting customer trends.
She said: “Retailers are having to gear themselves up to meet the evolution in shoppers’ requirements from bricks-and-mortar destinations. This will be key looking ahead. With inflation set to rise and a subsequent squeeze on disposable income, the environment for consumer spending will become increasingly competitive.”
The rise and rise of e-commerce
The past decade has seen a spike in online and mobile sales, forcing traditional retailers to rethink their strategies.
The BRC study found that almost a quarter of all purchases in December were accounted for by e-commerce. And that suggests more people than ever carried out transactions on the internet instead of heading to the shops.
Separate research from the consortium has also highlighted the increasingly important role e-commerce plays in attracting foreign shoppers to the British retail sector. Its Online Retail Monitor [SC2] for the final quarter of 2016 reveals a 23% year-on-year jump in the number of overseas customers searching online for
Adapting to survive
Ultimately, the BRC’s studies suggest that while the high street saw an improved footfall performance over Christmas, the direction of travel is still very much towards laptops, tablets and smartphones.
With this in mind, an increasing number of bricks-and-mortar retailers are looking to the following strategies to future-proof their services and enhance their long-term sustainability:
From national chains to independent players, physical stores can no longer take their customers for granted. With technological innovations allowing purchases to be made online with the click of a button, there’s a growing need to offer a more personalised shopping experience in-store. This approach could include loyalty schemes, special events, and non-pushy sales assistants who provide genuinely useful guidance.
As technology moves forward, it’s not enough for physical retailers to simply launch a website, sit back and expect online sales to roll in. Instead, as the e-commerce space becomes more competitive, they need to think carefully about the ease with which consumers can make online purchases, not to mention delivery speeds. From click-and-collect services through to same-day deliveries, web transactions must be as seamless as possible, and successfully integrated with physical stores.
Retailers may need to think more creatively to tempt shoppers into their stores. This might include equipping sales staff with tablets to show savvy customers how prices compare with other firms, and so-called ‘magic mirrors’ – where people can picture themselves in a variety of outfits without having to try them on.
Planning for future challenges
With retail in a constant state of evolution, it’s difficult to predict exactly where the industry will go as the decades roll on. But as they aim to keep pace with emerging trends, retailers mustn’t forget about the value of insurance.
When laying down any plans for the future, it’s important that firms compare different policies and ultimately secure the insurance product which is right for their needs.
NIG’s extensive range of products can cover the needs of retailers big or small, as well as additional cyber cover for those who are trading online.
Our Shop eProduct is available via our award-winning online trading platform TheHub and is designed to cater for a variety of retail premises; from modern retail parks to traditional high street shops. Find out more about our Shop product
For larger risks our regionally-traded Retailers Combined Product offers all the protection of Commercial Combined with additional bespoke cover for retail clients. Find out more about our Retailers Combined product
And for those retailers who have already made the move towards online trading our Cyber Cover product, which was given a 4/5* rating by an independent broker reviewer in the Insurance Times in 2016, can provide the cover you need. Find out more about our Cyber Cover product