Thursday, 17 January 2013

What can the high-street offer us that the internet can't?

DISCLAIMER: For the purpose of this post, I'm going to be putting my marketing hat on, so apologies if I get a bit jargon-tastic. I promise I'll get back to talking about blowtorches and food soon - and I promise that I'll try to not babble on for too long. However, a bit like carbs, curry and good books, this is something I feel really passionate about - and I think it has a place in my blog somewhere in amongst the other bits and bobs. 

In the first few weeks of 2013, three of the UK's most familiar high-street chains - HMV, Jessops and Blockbusters - have closed their doors for the last time. Add electrical retailer Comet to the mix - which went into administration in December - and that's an awful 18,000 people without jobs and an even bigger number of Twitter commentators who are left  bemoaning the demise of the high-street.

So, why do I think the high-street is 'failing'?

Obviously, there's the recession and all the other economic stuff that I only have a very vague understanding of, so I won't even attempt to discuss that. But there is something that I feel is at the crux of what HMV, Jessops, and Comet have in common: they all lost sight of what their customers wanted when they chose to shop in their stores rather than spending their hard earned pennies online or elsewhere.

Blockbusters are perhaps the only retailer to not fit this bill. With the rise of online movie streaming and home-delivery sites such as Lovefilm and Netflix, their business model was completely outdated. Added to the fact that the amount they charged for DVD rental was verging on criminal, to be honest it was a little bit of a miracle that Blockbusters survived for as long as they did.

But HMV, Jessops and Comet all offered something that I still believe there is a consumer need for - entertainment, cameras and electrical goods. OK, so in HMV's case the number of people downloading music and entertainment has increased, and as such selling physical media was inevitably going to get harder - but I don't think this was the sole reason for their demise. Just look at Amazon - they sell a similar product mix to HMV, and they're thriving (let's just not talk about tax here).

It has been repeatedly commented that HMV, Jessops and Comet all faced tough competition from online retailers and supermarkets. Of course this has a part to play in their fall - HMV should have invested heavily online during the 90's as Philip Beeching points out in this Guardian article - but I fail to believe that their target audiences have entirely disappeared. There are always going to be people who get a kick out of browsing a music and film store for hours, or chatting face-to-face to a fellow camera enthusiast about what camera lens is best. People like these want to speak to people who are knowledgeable and passionate about what they sell - and they are often willing to pay more for that pleasure. Price isn't always the issue.

What can we learn from retailers who are doing well? 

Bricks and mortar retailers who have ridden the recession have focused on providing an experience and a brand image that people are prepared to pay for. Think of John Lewis' promise to never knowingly undersell, or Apple's focus on excellent customer service. Both of these brands have invested heavily in a multi-channel approach to selling (for those non-marketers among you, this basically means that they sell online and instore, and maybe over the telephone too) but it is a truly integrated experience. It's this integrated experience - a clear brand message, a perceived expertise of their product and a  passion for what they sell that is communicated across every channel - that is key to any successful brand strategy. These brands don't go in for the hard sell, they aren't completely price orientated, and yet they've continued to thrive in the recession.

A disjointed experience

This leads me on to an experience that I had today which led me to write this blog post. It went a little bit like this:

  • I want to buy a new laptop, so I did an online search.
  • I found the laptop I wanted at a price I liked at a 'multichannel' electronics store. It's a famous one which goes under two names (see above comment on clear brand message for my feelings on this).
  • I tried to buy the laptop online. My bank decided that because I rarely spend money in electronics stores, they'd flag it up as fraud and stop me from making the purchase.
  • I tried searching the website to find out if they had any laptops in my nearest store,  but there wasn't a stock-checker.
  • I went to the store. After waiting for ten minutes to speak a sales person who was busy fiddling around with laptop wires, I was told that they didn't have any in stock, and the nearest store that had the model I wanted was in Halifax.
  • When I asked when the laptop would be back in stock if I ordered one today, I was told that they weren't able to tell me that.
  • I then pointed out that I was able to order online and it'd arrive tomorrow. I asked if I could do that in store.  They said I couldn't, as the retailer runs two different systems that don't work concurrently across their stores and website.
  • When the salesperson finally looked on the system, he discovered that nine laptops were indeed being delivered tomorrow. By this point, I was practically shoving my money into his fists and screaming "just sell me a bloody laptop!"
  • At which point, not sensing my rising blood pressure levels and the anger in my voice, the salesman attempted to sell me a hundred years' worth of insurance cover and a ton of software I didn't need.

What did I come away from this experience thinking? It sounds harsh, but if this retailer goes down tomorrow, they deserve it. It was a completely confusing and disjointed brand experience. The sales person (when he finally served me) spent time telling me about the products and insurance that would make the retailer the most profit, without even considering to ask me about what I was using the laptop for and selling software and accessories that could have genuinely been of use to me.

Having shopped in Comet and Jessops before they went under, I don't think I'd be alone in saying that the experience that I've described above could have just of likely taken place in one of their stores too.

What can the high-street offer us that the internet can't?

Just like the computer salesman not taking the time to understand what I was going to be using my laptop for, HMV also removed any form of personality from their sales process when they banned their staff from having tattoos. In my opinion, the high-street can still thrive if it seeks to offer a sense of community, knowledge and personality from stores and staff that the internet struggles to offer. Face-to-face, word of mouth marketing is still the most powerful form of communication - people want to feel part of something. They want to believe that sales people actually care about their needs and always strive to understand why they are buying a particular product. An e-commerce website, no matter how wonderfully the copy has been crafted, will always struggle with this.

Whilst I am tempted to agree with pundits that blame the rise of the internet for the demise of the high-street, I still believe that people want the touch-feel-listen-see completely immersive, interactive experience that only a bricks and mortar store can offer (well, until the Internet of Things really comes into its own anyway). Apologies for the fact that I keep on harping on about Apple, I really think that struggling retailers have a lot to learn from them. Apple have placed both their stores and their e-commerce offering at the heart of their strategy - the two work in harmony together. The Apple website is great for information gathering, and the stores offer complementing knowledge, re-assurance and a brand experience.  Retailers need to invest to make their high-street stores become 'destinations' which complement their internet offering.

At the end of the day, people don't see a channel, they see a brand. And they want to see a brand that can offer them value for money and a smooth, pleasurable, interactive experience what ever way they choose to shop.

1 comment:

  1. Good blog. I would disagree with you on some points though. Blockbusters did expand into the online market and have a very competitive second hand service for both DVDs and games.

    Also I don't think you can mention Amazon without mentioning the tax issue. They have an advantage over HMV in that they don't have the maintenance costs of running high street stores. Add onto this the massive savings from not paying tax and suddenly you can afford to undercut your rival in everything which brings in more customers and more turnover again increasing your ability to have offers and sales undercutting your rivals. If amazon were made to pay the tax they rightfully should be paying it would destroy their business model as their massive advantage has suddenly be taken away.

    I agree that retailers should have more one entity so that their web prices reflect their store prices. One of the reasons CEX is such a success is precisely that. You can look up selling prices, trading prices and even stock levels in individual stores on their website. I will always look this up first, then make the trip to the store and often make impulse purchases as well as my intended ones.

    On this front Apple are a little more unique. They've managed to create a brand that has become massively desirable. So much so that they charge nearly double (sometimes more) than a equivalent product from another manufacturer. Again this gives them massive profit margins allowing them to run high street stores. Also buy restricting who can sell Apple products they make their stores necessary to people. If HMV were the only store that you could purchase DVDs, they wouldn't have gone under as everyone would shop there.