- Multiples are reinventing themselves as chains of independents in order to survive, says Ian Shepherd, writer of Reinventing Retail: The New Rules That Drive Sales and Grow Profits
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What are the forces behind the ‘retail apocalypse’?
The internet revolution is well documented, but its impact on retailing is profound. As consumers, we now have all the information in the world in our pockets – about products, provenance, pricing and everything else. We also have the ability to make recommendations to each other, join campaigns at the click of a hashtag and watch how brands deal with their customers in real time over social media. All of that means that the customer is in charge like never before, and means that being a great retailer can no longer just be about having product in stock. It is now about being the place that consumers choose to come and experience and buy things, and being a brand consumers are proud to be associated with.
How is the indie experience different to that of multiples?
In many ways, I see independent retailers coping with the ‘New Normal’ better than the multiples. That’s because the things that the consumer revolution demands from retailers are often things that independent retailers do instinctively. As an independent you know your most valuable customers, for example, because you literally recognise them. For big chain retailers it is easy for retailing to become impersonal and operationally focused, and to lose sight of what the modern customer wants. I see independent retailers making smarter use of social media and working together to create local events and reasons to come back to the High Street. Often the local manager for the big multiple doesn’t have permission from Head Office to do those things, so it is the independent sector which is at the forefront of trying to keep local High Streets alive.
How have the demands placed on retailers changed in the past five years?
It is no longer enough to fill a store with product and hope people will buy it. It is harder to grab customers’ attention and harder to make a one-time purchaser into a regular customer when the consumer has so much access to information and so much choice. The best retailers, therefore, make themselves more than just ‘rooms full of product’. They offer expertise and advice, create experiences for customers, and are active voices online and on social media as well as in-store. Great retailers now are creating retail spaces where you can sample product, get ideas for how to use products and generally ‘hang out’ with like-minded people.
How do you expect that to change within the next decade?
The pace of change in retail is not slowing. As big product brands start to form direct relationships with consumers and things like ‘deliver to home’ subscription offerings become more common, it will only get harder to persuade customers to visit your store and pay a margin-delivering premium to buy from you. I suspect the core disciplines of what makes a retailer great will remain the same, though – consumers want retail spaces to be places they enjoy coming to, learn something from and have fun in.
What value do the traditionally independent ways of selling hold?
In the ‘New Normal’ (as I describe it in my book, Reinventing Retail), these disciplines are absolutely paramount. Indeed most of the investments being made by big multiple retailers (into loyalty schemes, databases etc) are only trying to mimic the personal and customer-focused touch that a great independent retailer has always had. If anything, multiples are trying to reinvent themselves as chains of independents!