It seems that we live in a life of a broken record, retailers cutting jobs, complaining that landlords aren’t giving them any flexibility, sales dropping… I am sure I don’t need to repeat it all.
Over the past ten years I have spoken to many groups about the challenges the retail sector is facing and unfortunately these have now been made worse with the pandemic. However, that is where my sympathy ends.
M&S have just announced they are to cut 7,000 jobs due to the impact of the pandemic. But to get the real picture you need to dig a little deeper, but not that deep. M&S, like many high street names, has been struggling on the high street for years, mainly due to a lack of understanding of their market. They have launched numerous new brands to try and attract new customers without realising who their core market is and working to keep them happy. In adopting this approach they have confused their core market and driven many of them away. They have also been very slow to really engage in the digital revolution and recognise that customer’s buying behaviour is changing.
Even before the pandemic, people were using stores less as somewhere to buy and more as a convenience store if there was an emergency. They weren’t showrooms or somewhere they went to understand the brand, somewhere the brands had a chance to engage customers. Retailers response has long been to cram stores with products, trying to get more sales per square foot, often creating a confused mess, where customers had little chance to really buy into the brand.
In M&S’s press release this morning they made a comment about the changing behaviour of customers due to the pandemic and it looks as though, finally, they have realised that they need to change how the engage and sell to their customers. They are fortunate in that they have an exceptionally strong food brand and this will keep the overall brand presence high and allow them to build on this again going forward. Their recognition of a change in customer behaviour may yet save them.
Brands such as M&S need to change their presence on the high street, they need to look at creating showrooms, not dissimilar to car showrooms, where they only hold enough stock for customers to try. This will allow them to free up space and create brand experiences where customers can see and understand the values of the business. The purchases will be made online, be that on mobile phones or possible at screens in the “store”. In addition, they need to create online spaces that are not just about selling but that replicate the store experience, virtual reality is becoming a “reality”, again retailers can learn from the automotive industry here, just look at the virtual tours of new cars. It may also allow them to reduce their store footage and save considerable costs.
The pandemic has had a massive and in many cases devastating impact on us all, but there may yet be a silver lining if the retail sector finally wakes up to the changing world of consumer behaviour and saves our high streets. The alternative is they keep trying to do retail how they did in the 1980’s and we continue to see job cuts in the sector for many years to come, long after the pandemic has been forgotten.
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