The High Street is Dead. Long Live The High Street!

UK high streets’ challenges are well-documented: falling footfall, the online onslaught, economic and political pressures. Each one is contributing to a slow and steady decline in consumer spend.

But at this year’s WFM Forum, delegates heard from retail intelligence expert Diane Wehrle who busted the myth that the high street is dead.

Diane, marketing and insights director at Springboard, said: “We won’t stop shopping and we won’t stop going to stores. People like people.

“That need for interaction will never go away. It’s now all about the quality of that interaction and the experience it provides. The bricks and mortar store will survive.”

And it’s retailers who must share the responsibility to make them thrive.

Here we share Diane’s tips on understanding the bigger picture and responding to its ever-growing demands.

Understanding High Street Signature Types

Traditionally, high streets across UK towns and cities have been characterised by predominantly retail stores, open 9-5 and enjoying footfall peaks at Christmas and Bank Holidays.

But this doesn’t tell the full story.

ResearchSpringboard Logo carried out by Springboard, Manchester Metropolitan University and Cardiff University has revealed four distinct high street signature types: comparison, holiday, specialist and multi-functional.

Knowing in which one of these types a specific store is located, and therefore its typical footfall pattern, can help retailers to deliver a better customer experience.

Comparison towns are the ones most closely aligned to the typical image of a high street: retail-focused with less emphasis on leisure and hospitality. However, they account for just one quarter of all high streets.

Holiday towns are few and far between, making up just 5% of high streets. They enjoy strong footfall peaks across the summer months with little impact at Christmas.

Speciality towns have something unique about them, often heritage attractions, which act as their main anchor instead of retail. They attract day visits, sparking longer dwell time, and have an elongated period of activity in the summer.

Multi-functional high streets account for 50% of all towns and cities. These retain footfall throughout the year as they house a mixture of retail, residential and commercial. Their stable profile sees a slight peak at Christmas.

Diane said: “Our analysis shows that there is no generic, one-size-fits-all approach to making the high street a success. Strategies must now take these specific hierarchies into consideration, analysing demand and use to plan appropriately.”

Understanding Footfall and Capture Rates

Armed with information about the type of high street a store is located on, retailers can then drill down into the finer points of footfall.

Footfall monitoring provides continuous data about the number of people entering a store, along with what day of the week and time they shop.

Springboard collects 120 million footfall counts each week across over 400 shopping sites, providing crucial insight into habits across high streets, shopping centres and retail parks.

High Street
Shopping Mall

Getting to grips with these figures, and the direct correlation between footfall and sales, can inform decision-making and help develop better models for workforce management.

Beyond the basics, understanding the capture rate of a store can provide additional insights.

Also known as ‘peel-off rate’, the capture rate reflects the percentage of footfall in a location that enters a particular store. This rate will depend on the store’s size, its brand strength and the nearby competition.

Measuring how footfall performs in relation to its location can significantly assist with evaluating and future-planning. Analysing granular capture rates by the hour, day, week and month not only provides a resilience marker, but can also plug into labour modelling: optimised staff allocation that leads to sales.

Diane said: “Capture rates have been steadily declining since 2015. Retailers are losing footfall to the destination itself.  Your aim is for each store’s capture rate to outperform the location rate. So, even if a store’s footfall is going up, if it’s not going up as fast as the location footfall, then you’re under-performing

“The pressure that retail is under is reflected very clearly in capture rates. Consumers are more selective now. They have greater choice and don’t need to browse like they used to. This impacts dwell time, conversion rates and ATV. Reversing the decline, especially in this culture of discounting, is hard so having access to the right data is essential.”

Understanding The Impact of Online

The demise of high street retail is almost always attributed to the rise of online spending.

But Diane disagrees: “The question I’m asked all the time is ‘Is this down to online?’ and my answer is always ‘no’.”

“What it’s actually down to is some retailers’ failure to react to that challenge, making the necessary changes to evolve and overcome it. Online shopping is only a reflection of how our lives have changed. It’s not sitting there on its own in isolation. We live in a digital world now.”

Diane explained how our lives were once very segmented with limited choices and little overlap. “We watched the news on TV at a certain time,” she continued. “And we stopped work when we left the office, maybe printing off a report to read at home.

“Now, those lines are blurred: we check emails all the time, we catch up on the news whenever it’s most convenient. The days don’t end, there’s overlap everywhere. And it’s the same for retail. Our browsing and shopping doesn’t stop when the stores close at 5pm.”

Shopping online
Shopping at home

This digital makeover of consumer habits extends not just to purchasing products but also to completing service-related tasks. Banks and post offices are becoming less and less common on the high street as their services have become digitalised.

Instead of visiting a bank to pay in a cheque, then popping into the department store next door for a browse, consumers are accepting online payments and completing transactions without leaving the comfort of their home.  

With that necessity to head to the high street gone, there’s an inevitable negative effect on footfall.

Indeed, Springboard’s figures show that high street footfall has decreased by 17% since 2008. And with regular year-on-year falls of 1-2%, this slow, steady decline has to be reversed quickly.

“Quite simply,” added Diane, “We have to address and embrace this. A lot of the larger retailers haven’t done and that’s the issue, not the demise of retail overall.

“The key is to create a point of difference. Customers expectations are rising exponentially. They’re more knowledgeable, have greater choice and are more demanding about cost, quality and delivery.

“There might be fewer people coming into our stores but we can be clever with those who do. They’re experience-hungry, it’s no longer just about buying stuff, so understanding what they want and tailoring our offer to them is vital.

“We’re all social beings and a great in-store experience involving human interaction and exceptional customer service is what every retailer who wants to survive must provide.”

This focus on experience will boost capture rates, drive dwell time and convert visits to sales: an alternative to online shopping that will always be in demand.

Online spending will of course continue to increase. The Centre for Retail Research predicts that it will rise from the current 17% of all retail spending to 30% by 2028.

Retail’s role now is to respond by understanding their customers’ habits, embracing the right tech to meet their demands and their employees’ expectations, and adapting their offer to suit.

Diane said: “We’ve been acquiring for so long that for many, it’s not about buying things. Spending is generally challenged at the moment: new car sales are down, inflation is up, household budgets are under pressure.

“For the younger generation especially, they’d rather spend the money they do have on experiences. And the growth of the hospitality sector reflects this.”

Understanding Key Trading Days

Once upon a time, retailers could look forward to regular calendar dates when footfall would rocket and tills would happily ring.

Boxing Day, Easter, Bank Holidays, they all held the promise of profit.

But their importance has faded and footfall declines on these days have been recorded year-on-year recently as shopping habits change.

Black Friday is now the star of the show with 2017 footfall levels higher than Boxing Day.

Diane said: “Black Friday is now well-established in the UK. It brings forward spend and creates two peaks for retailers to address. With the continued emphasis on discounting driving consumer habits, its influence shows no signs of abating.

“Sales driven by discounting are now the norm. It’s expected, especially in the run-up to Christmas. As consumers, we’re all guilty of thinking ‘Only 10%? I think I’ll wait until they reduce the item I want by 20%’. This is a serious issue for retailers as lower margins inhibit investment.”

With December footfall decreasing every year since 2012, Diane doesn’t expect the pattern to change this year: “2018 has been fascinating due to extreme weather, both very cold and very hot, along with political and economic issues. As the year progresses, the pressure on capture rates is increasing.

“This year’s festive trading results will be very interesting but I’m not predicting a hugely successful period for any retailer.”

Understanding the Technology Available

To succeed in the digital world, a bricks and mortar store must be tech-enabled. From streamlining workflows to understanding the customer journey, the right software solutions can future-proof our high streets.

digital transformationThe power of AI, machine learning and data science is already giving retailers unrivalled insights into business operations. Game-changing technology can profile customers via facial recognition, revolutionise forecasting and transform stock and delivery systems.

By plugging into its power, retailers can empower employees, exceed customer demand and boost both productivity and profit.

If they adopt new tech, understand the drivers behind falling footfall and spend, and respond to the changing retail landscape, they can all play their part in preserving the UK high street.

“Having a point of difference has become the difference between success and failure on the high street,” said Diane. “By facing the challenge head-on and establishing the type of differentiation that consumers now demand, retailers can ensure that the high street doesn’t just survive, but thrives.”