Specialise, don't generalise: The challenge for UK retail
Ian Burke, April 23, 2012
As the High Street continues to see more challenges – with the recent closures of branches of Mothercare and the administration of Game still fresh in our minds – many are speculating a large-scale e-commerce take over from traditional platforms. But many of these predictions are far-fetched and how retail real estate still has life in it yet.
RetailChoice.com reported a 38% increase in e-commerce roles at the end of 2011. This coincides with Deloitte's recent Store of the Future report, predicting that retail floor space will shrink up to 40% over the next five years. Although there is some suggestive correlation in these stats, I don't feel that online shopping is close to fully replacing the traditional in-store experience or that this could ever happen. I feel what we'll begin to witness is a move to specialise rather than generalise.
Retailers need to begin playing more to their unique strengths - their points of difference - with customers feeling more and more like a community. Smaller retailers are well placed to do this; able to focus more closely on their customers' needs and provide a uniquely strong, tailored and positive in-store experience. These employers will be looking for staff to specialise in personable face-to-face customer interaction, with a good understanding of their products and the needs of their market.
The retail giants are also in on the act. It has been recently reported that supermarkets Tesco and Sainsbury's are to stop expanding in the UK , and we see them begin to pay more attention to the quality of their smaller 'Express' and 'Local' urban sites. It seems to show investment into community, customer experience and overall convenience. Consequently, we'll see staff at these outlets becoming up-skilled and more specialised, knowing how many of each item is in stock and when things need to be ordered, with an in-depth knowledge of the product offering and store-layout. Take Apple for instance, they don't advertise for 'sales assistants', their jobs include titles such as 'specialist' and 'Apple Genius'. It is a return to old-fashioned personal service and I believe that this is a sensible approach for supermarkets. It will provide a straightforward way to immediately improve the customers' experience and help elicit trust and loyalty.
As online grocery shopping continues to increase in popularity, I do see scope for supermarkets to invest more in back-office logistics. I'm sure I don't just speak for myself when I say that it's irritating to see an employee take the last loaf of bread off the shelf for an online customer. It can't be making the in-store shopper feel valued when someone at home gets priority. Teams of online pickers definitely need to be removed from the shop floor with their own space and channels of distribution - particularly as online shopping increases.
Of course, I am not disputing an undeniable shift towards e-commerce in all sectors, and this does need intelligent strategy. Customers who have become brand-loyal will expect their online experience to mirror the in-store one. For many retailers online transactions stem from a positive, reliable in-store experience. The trust is built up from bricks and mortar and, in order to achieve a level of reputation and repeat business, retailers need to ensure that their e-commerce teams are fluent in the brand identity and customer journey. E-commerce - and m-commerce - have arrived and will continue to expand. My advice to those in the UK retail sector would be not to treat online retail as a pendant to traditional platforms. The same - if not more - attention needs to be paid to this shift if retailers' websites are to do justice to their brand and its products.
"f you look at a cross section of the sector, all retailers will be at a different point in their journey to online integration, whether they've got a fully successful website with a loyal family of online shoppers or they're at the initial research stages. Ultimately, retailers need to attain the right balance between online and in-store and total consistency across both channels. E-commerce cannot be done half-heartedly, it needs to be fully embraced and integrated into the business model otherwise companies risk damaging their reputation. Let's face it: after a bad experience - whether it be online or in store - we're not likely to return.
Candidates are increasingly hired to fill very skill-specific roles with retailers looking for e-commerce specialists, and not just one per company. Department stores, for instance, are hiring teams of e-commerce experts to manage each of their different fields, such as homeware, fashion and electricals.
Ian Burke, CEO of RetailChoice.com