28 Sept 2017
US High Street Retailers Add Value to See Off E-commerce Interlopers
With online purchases now accounting for nearly 10% of the overall retail spend in the US, the owners and managers of conventional stores are taking an increasingly sophisticated approach to retaining – and winning back – market share.
With bricks-and-mortar retailers ever more keen to migrate, at least partly, into the digital space, it sometimes seems as though high street shopping outlets may well have had their day. At first glance, the latest findings from Forrester Research, a Massachusetts-headquartered tech-focused market-research business, would seem to confirm this, with the company predicting that the 2017 value of online sales in the US alone will be about US$394 billion.
It's actually less of an indictment of conventional high street practices when you factor in that the total value of the US retail market in the same period will be about $4 trillion. Overall, this sees e-commerce still accounting for just 9.85% of the total US retail spend, though many anticipate that this figure will only continue to rise.
While many still see the decline of the high street as inevitable, a substantial number of bricks-and-mortar retail operators do not necessarily share their pessimism. This has seen store managers and owners across the US adopting tactics and approaches that they believe digital-only businesses will find almost impossible to match, frequently majoring on added-value services, ambience, convenience and their direct face-to-face access to consumers.
In terms of added value, a number of retailers across the US have called on the services of ChargeItspot, a Philadelphia-based company that specialises in the provision of secure in-store mobile-phone charging points. This sees customers able to plug in their low-battery phone, e-reader or tablet at a free charging point before continuing with their shopping.
While charging, each of the customers' digital devices is locked into a secure drawer, which only the actual owner can open. Each kiosk can also be custom-branded for each retail site, with their free-of-charge use by customers said to enhance the purchase experience and build brand loyalty.
A number of upmarket US retailers, including Neiman Marcus, Bergdorf Goodman, Bloomingdales and Nordstorm, have already signed up with ChargeItSpot, as have several of the more designer-led outlets, most notably Under Armour and Urban Outfitters. The kiosks can also be seen in many US casinos, stadiums, hotels and hospitals.
When it comes to ambience, Apple is the retailer seen as continually raising the bar. Ever keen to lure deep-pocketed Generation Z technophiles into its Apple Stores, the California-headquartered company is currently rolling out a series of upgrades to its outlets, while reinventing its Genius Bar technical help points as foliage-strewn Genius Groves.
With the clear hope that millennials will eschew the rival delights of coffee shops and book stores in favour of hanging out at their local Apple Store, many of these retail spaces will now also be used to host concerts and symposia. Apple is also planning to hold regular workshops, focusing on the best use of its products, within a number of its stores.
In more practical terms, many US retailers are now increasingly looking to manage their inventories at the store level. This gives them an advantage over their online counterparts in that they can guarantee product availability, while remotely delivered items are subject to logistics failures and service interruptions caused by freak weather conditions.
At the same time, a number of high street retailers are also looking to capitalise on their face-to-face personal contact with purchasers. While e-commerce sites can only upsell during the initial transaction, for instance, in-store staff are able to influence and initiate purchases far more freely, including occasions when O2O customers are on site to collect items previously ordered online.
It would be wrong to assume, however, that it is solely bricks-and mortar-retailers taking the fight to their digital counterparts. With more than 90% of the overall US retail volume still up for grabs, several e-commerce businesses have woken up to the possibilities opened up by operating a physical outlet.
Taking a lead here is Amazon, the world's biggest online retailer, which now owns and manages 11 bricks-and-mortar outlets across the US, with two more set to open before the end of the year and further expansion promised in 2018. As well as its direct on-site sales, the company also sees the stores as providing a showcase for its products, helping to build customer loyalty and increasing the number of impulse purchases.
Mandy Lo, New York Office