Times are tough for smaller retailers. Just two new independent outlets opened in Britain every week last year, compared with 11 a day in 2010. Footfall is declining in town centres, with existing small shops suffering. And the growth of internet shopping has left many vendors behind the times. Even those that want to enter the digital age must have despaired when they heard Ed Vaizey, the minister responsible for telecoms, at the recent Select Committee hearing backtracking on Government promises to provide universal superfast broadband across the UK. Faced with such unfavourable conditions, how can small retail businesses fight back, increase sales, and achieve business growth?
Make no mistake, embracing technology is the path to future retail success. Shockingly, one in six UK SMEs still has no website, and only a third can accept payments online, Santander research shows. Such a neglectful approach is professional suicide for a modern-day retailer. SME sellers need a transactional website at the very least, and one that’s mobile-enabled to accommodate all the people now shopping via their mobile phones.
Mobile retail has been the big area of growth in recent years, particularly since smartphones have larger screens with better pictures and easier navigation. In the UK, £1 in every £5 is already spent digitally, with about six out of ten e-purchases made through a handset or tablet. Online retail sales could account for almost a fifth of all purchases made in the UK by 2019, according to digital analytics firm eMarketer.
Where customers lead, retailers must follow. SMEs that want to succeed in the 21st century need to offer the option of buying via the internet, so investment in digital infrastructure is a necessity. No news there. But what is surprising is that increasingly people are returning to the traditional shopping experience, at least aspects of it, and crave a combination of the new and the old. And this blended approach to retail could be very good news for smaller retailers.
New Rules Of Engagement
We are all familiar with the merits and pitfalls of buying things online – the convenience of ordering at the click of a button, but also waiting for deliveries, or finding that what appeared on screen looks very different in real life. Today, many customers want the best of both worlds. They prefer to research items on the move or at home, but handle goods in a physical store, with the ability to buy and take away items as soon as possible.
This new trend for so-called webrooming, whereby a shopper does all their browsing for an item online, then goes to a physical outlet to make the actual purchase, is growing rapidly. And digitally-savvy youths are driving the change, with three out of four Britons aged between 16 and 21 saying they research online but buy in-store, according to findings from market researchers GfK. Adults aren’t far behind them in this behaviour. So, why do people realise they like bricks and mortar, after all? Convenience, the expertise of staff, not having to pay delivery charges, and, for younger people, getting something seemingly unique. Many of these qualities are characteristics of SMEs.
So, physical shops are back in fashion – even Amazon, the website that effectively created mainstream e-tail, has recently launched old-fashioned bookstores in the US. But what does this mean for SMEs that currently only operate online? Well, it may be time for them to try launching a pop-up shop to see how consumers respond in the real world. Even something as simple as a market stall could offer a chance to try out face-to-face retail with minimal commitment and low overhead costs. For existing real-life retailers, it means having a comprehensive online presence behind the high street shopfront, technological back-up, and logistics support for deliveries and returns, all of which modern consumers have come to expect.
This is not just multichannel retailing, but omnichannel – ensuring the customer can shop how they want, having the most seamless experience possible between a business’s online and physical aspects. For example, if you’re out of stock of an item when the customer is in your shop, order it and post it to their home address. It offers the convenience they’ve grown accustomed to through online retail with the added personal touch of human interaction. You also need to understand who your online shoppers are – they may differ from those who visit your shop. Personalisation is considered the key to omnichannel success, so scrutinise data gathered from your website about who is buying from you, where they are, and what items they favour. This will enable you to tailor, market, and deliver your offering more effectively in future.
Reasons For Cheer
The fact that younger customers, in particular, are looking for the qualities for which smaller retailers are typically known – great customer service, knowing their shoppers and their needs, while offering something unique that can’t be found elsewhere – is very encouraging for small enterprises. Often, SMEs can’t compete with larger rivals on price and range, but they can beat them by being distinct, as well as quick to respond to shifting trends and market changes.
Smaller companies can also adopt new digital methods more swiftly than lumbering big name rivals precisely because they’re so nimble. This may be employing forms of in-store technology for mobile payment or apps such as Vend, which works on a tablet, acting like a till, while also updating stock data, and giving notification when new orders should be made. Perhaps it’s offering a click-and-collect service, marrying up the retailer’s web offering and their physical shopfront. Technology is a great leveller, and can allow a smaller player to offer a polished, slick, and coherent experience both online and in-store.
Investing For The Future
The modern consumer is sophisticated, swapping between online and offline channels, looking at product reviews on their smartphone or comparing prices of retailers while standing in a shop. It can make it hard for smaller business owners to keep up, but we at Boost Capital have worked with many retailers who are making the necessary investment to ensure they remain relevant – and solvent – for many years to come. Whether it’s online vendors finding the funds to expand into physical premises, or shops improving their digital capabilities, many smaller retail businesses accept they need capital to grow and improve their enterprises. As a result, Britain boasts the most innovative retail market in the world.
Retailers must never cease to listen to their customers, and learn from them. Times are tough for small businesses operating in retail, but, as long as people want to shop, there will be opportunities for those who understand what consumers like, and how they want it delivered. Some elements of retail never change – give buyers products they want, at the right price, with great service. But modern shoppers are changing in the way they behave. Retailers must do what’s necessary to adapt, too, whatever their size. And, for once, being small may be an advantage.