The worst run of health for five years. That was how the KPMG-Ipsos Retail Think Tank described the health of the UK retail industry recently after warning that it faced a third consecutive quarter of decline.
The country’s Retail Health Index — which began with a reading of 100 in 2006 — dropped from 82 to 81 in the second quarter of 2017, and the forecast looks equally gloomy. Paul Martin, head of retail for KPMG, said: “Prolonged discounting and crumbling demand have contributed significantly to the prediction that we are set for the worst run of retail health performance for five years.”
While this might seem like a damning verdict that seals the fate of the industry for years to come, at Ecrebo, we think quite the opposite. In fact, we believe it is simply an opportunity for retailers to think differently about how they do business. Instead of resting on their laurels, it’s time to re-consider the role of the bricks-and-mortar store in today’s landscape and adapt to changing consumer expectations.
We now live in a time where shoppers actually expect brands to know who they are and what they like, both in terms of products and services. When these consumers interact with a certain retailer, be it in a physical store or through social media, they want to see a level of personalisation that can help them with their purchasing decisions — much like the way Amazon guides us along the buying journey with its recommendation engine.
Amazon was one of the torch-bearers for this kind of highly-personalised marketing, and it has been extremely successful in its efforts. According to McKinsey, 35% of everything purchased by consumers on Amazon comes through product recommendations based on sophisticated algorithms, proving that personalisation can help drive engagement and sales significantly if delivered to shoppers in the right way.
But of course, personalisation is far from a simple solution — it is fuelled by data that must be collated and orchestrated in very specific ways. With the right technology, retailers can employ so much more than simply previous purchase history data to deliver suggestions and recommendations; they can also take things into account such as the time of year, the weather, popular items that have been bought by other shoppers and so much more.
By utilising this data in the right way, bricks-and-mortar retailers are able to deliver in-store messages and communications with a level of personalisation only previously possible online. Offers can be sent to individuals based on a wealth of different data variables, which in turn presents the opportunity to reinvigorate shoppers within physical stores and nurse the ailing UK retail industry back to full health.
Being able to interact with in-store customers in this way not only delivers numerous benefits in terms of customer engagement, trust and loyalty, but it goes far beyond the capabilities of traditional discounting and couponing. As implied through Martin’s earlier comment, shoppers in the UK no longer want to be bombarded with discounts that they aren’t interested in — they want to see offers that are personal and more relevant to them.
This is exactly what we’re all about at Ecrebo — helping retailers deliver these all-important hyper-personalised offers to customers and giving them a means to understand and engage their customers. By using data from in-store interactions, retailers can also learn more about how their in-store customers shop and generate actionable insights that drive the delivery of personalised and relevant communications to customers, thereby enhancing long-term loyalty.
So, while we might be led to believe that UK high streets are doomed, we believe the revival remedy is already out there — retailers just need to think differently.