With the backdrop of a continued decline in the high street, online retailers are benefiting from digital marketing.
Retail sales in the three months to June 2018 increased by 2.1%, which according to the Office of National Statistics is the largest increase since February 2015, with growth across all main sectors. On the back of dismal results for the 3 months to April 2018 where consumers kept their money in the pockets because of the bad weather, can these latest results bring good cheer to high street retailers across the country?
While hot weather and World Cup celebrations resulted in the strongest three-month on three-month growth since 2001 at 2.2% for food stores, these factors resulted in a different outcome elsewhere. A decrease in footfall and a decline in spending is reported in many other shops as consumers stayed away from stores and instead enjoyed the World Cup and the heatwave. Compared to online sales, the high street retailer is seeing very flat results. Online sales as a total of all retailing remained unchanged at 18.0%; online spending in clothing and footwear stores continued to achieve new record proportions of online retailing, for the fourth consecutive month, at 17.5%.
The trend is not good for high street retailers
The poor health of the high street retailer has been well documented. In 2017-2018, established brands like Toys R Us and Maplin went out of business with 1000s of job losses. Retailers currently under pressure include New Look with debts of over £1bn; House of Fraser is closing down stores across the country and asking landlords to cut rents; and Debenhams, one of the oldest and most significant retailers is considering store closures and currently making one in four of its managers redundant.
A combination of problems have hit retailers on top of the squeeze on spending, including higher labour costs as a result of increases in the minimum wage, the rise in online shopping and rapidly changing spending behaviours.
With so much growth being seen in online sales across all sectors, its time for the traditional high street retailer to do something about it.
Retailers need to be part of the online sales boom
Retailers are beginning to face a millennial explosion, with the digitally savvy generation expected to account for 30% of discretionary spending by 2020. Until now, high street retailers have been part of a soporific industry kicking the digital can down the road, but it’s really time to embrace digital technology, make adjustments to their business models and start to enable sales online.
Making consumers aware of their online store and giving them the ability to buy online should be the first objective for the traditional retailer.
A combination of retail digital marketing around a hard working online store with accurate data insight, can help retailers to rethink not only what they should stock in their high street stores and online, but understand the most effective methods to communicate with customers.
But once the big data is available, there becomes a whole new way of building relationships with consumers, and encouraging them to spend more. Better still, instead of using all those seasoned cliches of satisfying the needs of the customer, retailers can actually start anticipating them – that in itself will be the most influential element of how they spend their marketing budgets.
Retailers recognising that they need to make an adjustment to the business will give themselves a better chance of survival. The rules of making sure retail digital marketing resonates with the modern customer are changing every day, and without a multi-channel sales and marketing strategy traditional retailers could become the next Toys R Us or Maplin.
If you want to lift your game and open up a new digital channel for your retail business, or start to create visibility for your current online store, share your vision with Oxfinder, and we will help you tune into the new era and capitalise on it.