3 ways that digital technologies can combat the decline of the High Street
The UK high street is in the midst of a deepening crisis. Store closures officially overtook store openings in 2015 and the trend continues today. The first half of 2019 alone saw some 3,000 stores shutting down. The UK is not alone, as failing high streets can be seen across Europe and the US.
Toys R Us, Maplin, Staples, BHS, Karen Millen and Coast are only a few of the more recognisable names caught in the crosshairs of increasing rents, business rates, and shifting shopping habits.
Undoubtedly, the decline is in part due to the inexorable rise of online shopping and traditional retailers’ struggling to adapt to our new digital culture. Although, paradoxically, the demand for physical outlets continues, with ecommerce giants like Amazon and Alibaba starting to invest in physical stores.
In this article I’ll look at three ways that digital technologies can help to alleviate the downturn of our high streets, but firstly let’s look, fleetingly, at some other ways to stop the familiar ‘High Street Apocalypse’ headlines.
Support The Businesses
In 2018, more than 50,000 people lost their jobs as high street stores folded. Although retail is the biggest private sector employer in the UK and accounts for 5% of the country’s economy, businesses in this space pay 10% of all business taxes and 25% of business rates, which represents a huge squeeze on bottom lines.
This has only exacerbated the high street retailers’ plight, prompting the British Retail Consortium and more than 50 retailers to demand business rate cuts from the government to keep them afloat.
“The burden that rates places on all high street businesses not only stifles growth but is a major contributor to the closure of stores and the resulting decline in towns across the country,” Clive Lewis, chairman of the fashion chain River Island, said.
Apart from tax cuts, creating more job opportunities can also help keep high street stores open.
Just recently, the government announced that £95 million from the Future High Street Fund would be used to support the high streets of 69 towns and cities. This investment will be used to transform abandoned buildings into shops, houses, and community centres, creating more jobs in the process.
Many commentators and experts maintain that the traditional business model of high streets should be replaced with areas that communities can work and/or gather. The high street should therefore be seen as a mixed economy and not a place based on retail.
In fact, a couple of stores have already followed this model. Homebaked, situated within the boundaries of Anfield and Everton, is a community-owned bakery co-produced by people who live and work in the area. Kitty’s Launderette in Liverpool, meanwhile, offers cheap washers for rent and a place where the community can gather.
So, how can the UK retail sector use digital technologies to boost footfall and spend in a world increasingly choosing to stay away from high streets and instead use online transactions?
1. Digital Placemaking
Although the digital revolution is often cited as the predominant cause of high street decline – which I don’t believe it is – there is also the potential for the creative and judicious use of digital technologies to be part of the cure.
Online shops, while convenient, have created a disassociation between business and the community. Digital placemaking can foster and/or recreate stronger connections between people and places—a feature that ecommerce sites can never reproduce. Recent advancements provide opportunities to draw people back to the physical spaces of high street shops in new and innovative ways.
Take, for instance, Google’s Curiosity Room. To promote their Pixel 3 smartphone in London, the search engine giant turned 55 Regent Street into a huge digital placemaking installation filled with workshops, podcasts, talks, dining experiences, and hands-on demonstrations. The combination of exploration, curiosity, and playfulness successfully generated buzz and amplified customer experience.
Digital placemaking technology also fits perfectly into omnichannel marketing strategies (see below) that exist across physical and online spaces and playing a huge part in activation campaigns.
Digital placemaking should, however, be used with sensitivity to the community. Calvium’s ‘I am Norrebro’ app was built with this philosophy in mind. By enabling the community to work together to create stories that were featured in the app, we were able to bring an increasingly antisocial and segregated community together. This is evidence that digital innovations can bring attention to businesses, whilst still affecting positive social change.
2. Omnichannel Approach
Although lines seem to have been drawn between online and brick-and-mortar stores, saving our high streets doesn’t have to come down to choosing between physical spaces and digital techniques. It can actually be both – and should be.
Three-quarters of UK consumers still prefer to purchase in a physical store, because they want to receive their products immediately. At the same time, nine out of 10 UK shoppers research their products online before buying in brick-and-mortar outlets.
While an omnichannel approach may sound like the logical recourse, given today’s consumer behaviour, many retailers are unwilling, or maybe unable, to adapt.
A study by eBay, YouGov, and Development Economics found that a quarter of small UK high street retailers do not have an online presence (e.g. website, social media). Moreover, almost a quarter of these stores have no intention of closing this digital gap in the future, which is unfortunate as their online presence can generate as much as £4.1 billion in extra sales revenue each year.
However, several high street brands have successfully adapted and applied an omnichannel approach.
For instance, River Island created an ecommerce store that saw online sales rise by 30% in 2016 and click and collect orders by 40%. Meanwhile, John Lewis and Boots both use a “click and collect” business model, which encourages customers to try clothes in-store and then buy them online. At a more local level, apps like ShopAppy are offering a similar service for independent businesses, allowing customers to shop online and click and collect in their local area.
3. Create Destinations
Instead of thinking of high street stores as places where people go solely to shop or dine, brands should also focus on adding to the customer experience.
Plenty of physical retail stores today add coffee shops or bars on top of their regular merchandise. Stores can also host events or partner with the local community. This way, they will go beyond being an avenue where transactions happen; they will become destinations.
Topshop has successfully done this by hiring DJs to play in their flagship store. Disney Store, meanwhile, allows kids to play with some of their products, making them accessible and fun for their target market.
There is also an opportunity to extend the visitor experience across the whole location. Mobile solutions are a great way to provide visitors to a town centre with expertly curated routes to follow. For example we worked with the City of London Corporation to design and develop their successful City Visitor Trail app that helps locals and visitors to the city discover routes, itineraries and stories in and around 40 well known and not so well known landmarks.
Another strong example of digital placemaking to enhance the experience of an area is the Battersea Power Station Heritage Trail app that Calvium created for the prestigious London development. Using creative storytelling, augmented reality and GPS, the innovative app allows users to see and experience the history of the iconic Battersea Power Station, as well as glimpse its future development.
Adaptability Is Key
Digital technology – and digital placemaking in particular – represents a genuine opportunity for retailers. Those who embrace and pursue digitally-enabled services and experiences as part of their core business will ultimately better connect with their customers. Adaptability is key, as is quality. In today’s rapidly changing marketplace, to remain competitive retailers must be relevant. To be relevant, businesses need to understand and be part of the UK’s evolving digital culture. Hence, digital technologies can play a massive part in the revival of the high street.