Adapting to changing consumer behaviour
M&S recently announced that they plan to invest £480 million in their ‘Store Rotation Programme’ which would entail “180 higher quality, higher productivity full line stores…[and] opening over 100 bigger, better food sites”, generating 20 more stores overall. Whilst growing a brick-and-mortar presence may seem surprising to some, due to the general shift towards online shopping caused by the pandemic, research suggests that high street stores are bouncing back.
Analysis conducted by PwC demonstrates that current consumer preferences between online and offline shopping are polarised. 37% of consumers prefer physical stores for enjoyment or pleasure, compared to 32% for online shopping. Additionally, 56% of consumers believe that customer service is better in-store as opposed to online (19%).
Though online shopping continues to be a key part of the buying journey, physical stores will remain significant in customers’ experiences. Stuart Machin, Chief Executive of M&S, echoes this stating that “stores are a core part of M&S’s omni-channel future and serves as a competitive advantage for how customers want to shop today.”
One of the reasons for this is that the high street offers a unique shopping experience that cannot be replicated online. Physical stores offer the opportunity for consumers to see and touch products before buying, as well as receive immediate satisfaction of a purchase. Additionally, physical stores offer the opportunity for face-to-face interactions with sales associates, which can be helpful for making informed purchasing decisions. Some retailers are also experimenting with new technologies like virtual reality, interactive displays and in-store events to enhance the in-store shopping experience and drive foot traffic. More than a third of all consumers would gladly pay more for an enjoyable shopping experience, whether that be a multisensory buying journey or receiving a human touch.
Another reason for the resilience of the high street is the fact that it is a vital part of the community. The high street provides a range of services and amenities to local residents, including shops, restaurants, cafes, and other community services. As local authorities continue to invest in the regeneration of inner cities across the UK, it makes sense that developing more spaces for retail, dining and living are a key part of these plans.
Interestingly, retail brands who are opening brick and mortar stores are also witnessing what they are now coining the ‘halo effect’. That is, the positive effect physical retail can have on online channels. On average, brands see a 36% uplift in online traffic the quarter following the opening of their physical store.
As consumers demand more channels of interaction with a retail brand along their buying journey, physical and digital retail are becoming more and more blended. As a result, brands must now look to ensure channel integration is a key part of their customer service solution. This means creating an omnichannel experience, such as the ability to purchase online and pick up in-store, or the ability to return online purchases in store.
To conclude, whilst the purpose of brick-and-mortar stores may be redefining itself, they remain a crucial part of the retail landscape and thus a brand’s strategy. The high street has stood the test of time, with a post-pandemic bounce back and research suggesting that consumers understand the value of and unique experience offered by high street shopping.