‘The future is multichannel’
Brand and retail expert, Mark Pilkington, gave a video presentation at this year’s Retra Conference, based on findings from his new book, Retail Recovery – How creative retailers are winning in their post-apocalyptic world. He gave Sean Hannam an exclusive interview, in which he talks about some of the retail trends he’s seeing in the ‘new normal.’
Sean Hannam: In your Retra Conference presentation, you said that most stores were “glorified warehouses full of stock” – you stressed that they need to change and offer people experiences and retail theatre. You added that retailers should be “brand ambassadors” rather than “box-shifters.” In electricals, who is doing retail theatre well? Mark Pilkington: I don’t know of anyone in the electrical field specifically, but Apple is always cited – when you go into an Apple Store, you always feel that you’re participating in a cultural milieu. They have live training sessions in-store, and they do their repairs there too – it’s very interactive. There is quite a lot of demonstration going on in electricals, so I don’t think by any means that it’s the worst [sector]. In most electrical stores, the products are laid out to be tried and demoed, which is more than in most other types of retailing, where they’re just sat on the shelf.
It hasn’t been as bad in electronics as it was in fashion –
apart from a few big players and some smaller smart ones, almost everyone in the UK fashion world, and a lot in the US, went bankrupt, as well as the department stores.
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Almost everyone is gravitating towards a multichannel model – I don’t think we’re going to see the enormous fallout we’ve seen over the past six or seven years
That was a huge cull, but I don’t think we’ll see that again –
retailers now are much smarter, and they understand that you’ve got to have multichannel. They can leverage their stores for deliveries and that gives them an advantage over pureplay e-commerce companies because they have more outlets. The big problem in e-commerce is the cost of delivery and
returns. If you’re a retailer with 100 outlets you have an advantage – assuming you can have a really good horizontal view of your stock through your distribution chain, and that it’s accurate. The big American electronics retailers, like Best Buy and Target,
SH: In this “post-apocalyptic” retail world, there has been a growth in start-up online businesses, because the barriers to entry have been lowered. Do you expect to see even more growth in online and more
traditional retailers to disappear from the high street? MP: The trend started before Covid, which accelerated it. The share of the UK online market has gone from 19 percent to 27 percent. If you look at the previous period, that took about 10 years to
achieve that. There’s no question that online has grown dramatically, but there’s some evidence that it’s levelling off – that people are going back to stores, so, therefore, I think that, in the short-term, there will be some rebalancing towards stores, but the factors that drove the online growth in the first place aren’t going away. I do think there will be more growth in the internet, but I don’t
know where it’s going to end up. A lot of retailers now are getting close to fifty-fifty [online and in-
store], but I don’t see it as being a war between online and [in-store] retail – the future is multichannel. Almost everyone is gravitating towards a multichannel model – I don’t think we’re going to see the enormous fallout we’ve seen over the past six or seven years.
have taken a huge step forward and have leveraged their stores to do deliveries and kerbside pickup – buy online and pick up or return in-store. For the UK electronics industry, that’s the way to go – not to have a dedicated internet warehouse for shipments because that’s going to be too expensive, especially with big boxes. Integrate the stores and do local deliveries and returns –
that will give you an advantage over Amazon, which doesn’t have those stores.
SH: During Covid, we saw a trend for consumers to shop local. Do you think that’s here to stay, or will it go back to how it was before the crisis? MP: I think most of it will go back. It gave an opportunity for local players to make a relationship and help people, but if they don’t follow up and keep it going, it won’t have any benefit. We had a fruit store that was across the way from us – they helped us out and shipped to us, and we called them when we needed to, but the moment Covid stopped, we never heard from them. They never exploited that relationship – they could’ve called us up and said, ‘We’re still here – we’ve still got nice stuff, and would you like some?’ They never did. I think it’s in the hands of the traders to do it.
www.markpilkington.net Retra Conference Review 27
Retra Conference Review
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