News analysis: Should retailers push for a digital Christmas?

30 September 2013
By Aasha Bodhani
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The retail industry has embraced omni-retailing

Retailers combine traditional and non-traditional selling channels to boost sales over Christmas

The lead up to Christmas would not be the same without frantic, last-minute shopping trips, packed shopping centres and, of course, retailers pushing for purchases by any means necessary to avoid disappointing sale figures. Yet industry experts are urging retailers to switch their usual tactic of employing the ‘traditional’ selling channels, and instead adopt innovative technology to boost sales.

“There is a massive pressure on the high street at present, and although many are being crippled by business rates, stores will have the responsibility to evolve with their customers,” says CEO of m-commerce (i.e. mobile-commerce) start-up Powa Technologies, Dan Wagner. “Technology will be instrumental in the much-needed changes that have to take place if stores are to survive closures.”

Closures of even major retailers are becoming increasingly common, with Republic, JJB Sports, Clinton Cards, Game, and Comet among those entering administration in 2012. This comes as no surprise as, according to consultants PricewaterhouseCoopers and Local Data Company, high-street stores closed at a rate of 18 a day in the first half of 2013, in particular, card, computer games and women’s clothes stores were prevalent among the failures.

The retail industry is considered one of the indicators of economic wellbeing, and since the recession first hit the UK, retailers have felt the pinch on consumer spending. Those stores that can afford to innovate have begun to embrace ‘omni-retailing’, connecting with consumers across ‘traditional’ and ‘non-traditional’ channels.

Bricks-and-mortar outlets and heavy discounting are obvious traditional channels, but retailers like John Lewis, New Look and Adidas are adopting non-traditional channels, such as e-commerce, m-commerce, virtual pop-up stores, near-field communication payments and augmented reality-enabled ‘magic’ mirrors. These innovative channels are beginning to dominate the retail industry and in turn change consumer behaviour and expectations.

According to the Office for National Statistics, online sales were the driving force behind the UK retail market last year, though on the whole retail sales were poor. Online retail experts IMRG said the Internet retailing market grew by 14 per cent in 2012 compared with 2011, and is predicting a 12 per cent growth over Christmas 2013.

However, are such innovations enough to reinvent the retail shopping experience and boost sales – especially during the festive period - or are they mere baubles decorating an outdated retail infrastructure?

“Using devices like iPads in store will help assistants find information on stock availability quickly, which in turn means more customers can be helped, especially during a busy time like Christmas. Equally, supply-chain technologies like RFID can help improve efficiency at a time when all retailers are logistically challenged,” explains analyst Neil Saunders from retail research agency Conlumino. “Social media has a role to play too as more customers will use it to contact retailers for queries and so forth. Retailers need to make sure they’re putting sufficient resources behind social media to ensure a good speed of response.”

He added: “Other new technologies like magic mirrors and augmented reality may also provide some customer benefits but the challenge here is to ensure they are useful rather than just gimmicks.”

As Christmas approaches, online auction site eBay and one-stop store Argos have partnered to offer consumers a ‘Click & Collect’ service, in the bid to combine online and bricks-and-mortar retailing. The six-month trial will enable online shoppers to purchase products from selected eBay merchants and collect the items from Argos stores. The two retailers are aiming to provide a service which is convenient, quick and gives the consumer more choice in purchasing products.

The use of digital trends in high-street stores is in demand, particularly during the festive season as e-commerce experts Econsultancy revealed from its ‘Christmas 2012 Online Shopping Survey’ report that consumers purchasing patterns are changing due to mobile, online and collection methods, as 40 per cent of UK shoppers used some form of Click & Collect service during Christmas 2012.

Retailers have the advantage of adopting various innovative technologies to boost sales, and while the festive season is a busy period, it is clear retailers must adapt to consumer technology requirements to boost sales for the long term.

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