Vihan Sharma, European Managing Director, LiveRamp
Recently, Marks & Spencer announced a recruitment drive to hire 85 tech specialists. This is reflective of a much wider trend affecting the high street, as retailers are increasingly pouring resources into e-commerce in the wake of the pandemic.
However, while e-commerce will undoubtedly continue to be crucial in the coming years, this does not have to mean the end of the high street. Instead, to thrive after the pandemic, physical retailers need to reconsider how they can effectively use the data they gather through e-commerce channels to improve in-store interactions.
The rise of e-commerce over the last 15 months has been hugely significant, growing by more than 46% in 2020 alone, according to the ONS. In the last year, online shopping has become a preferred mode for retail purchases, with people of all ages turning to the internet for groceries, fashion and food deliveries.
For many high street retailers, the past year has been spent trying to catch up with online retail giants by creating better e-commerce platforms, and beginning to gather data about their customers that they could use for marketing and business insights. In fact, research we conducted with YouGov showed that over half (56%) of retail and hospitality leaders believe the data they gather from e-commerce would give them the opportunity to compete with the UK’s online retail giants, such as Amazon or ASOS.
While it’s clear that new ways of reaching their customers and driving sales is a good thing for the high street, the retail sector shouldn’t overlook the advantages of a physical shop.
In-person shopping creates an experience that online-only retailers cannot replicate easily, from allowing shoppers to view products in person, to try on clothes, or interact with a shop assistant. So, while customers may be more inclined towards online shopping for its convenience, high street retailers with physical stores should realise the attraction of the in-person experience and the advantage this can bring to their dataset.
While customer data analysis has become more familiar to many high street stores through their e-commerce offerings, in-person retail also has the potential to generate new insights, from the products that customers tend to buy together when in-store, to the success of in-store promotions. The real value is created when in-store data is connected with data generated through online channels, allowing the retailer a clearer and more complete view of their customer’s journey.
By investing in a secure third-party platform to connect their online and offline data, retailers can make sure that protecting their customers’ data is a priority, while at the same time deepening their understanding of their customer and their journey, measuring the impact of marketing campaigns, and more accurately reaching new customers.
However, to truly compete with larger online retailers, businesses with physical presences can go further – they can collaborate with other trusted retailers and brands to drive new insights and reach a new pool of customers. For example, a sports brand stocked in a clothing store can partner with the clothing store to gain access to important sales data, allowing them to see which products are selling well, which audience segments are buying certain items, and enabling them to create data-driven marketing strategies and offers that benefit their customers and drive sales.
In practice, this might allow the sports brand to see that a certain type of running shoe is very popular with a certain demographic. This insight can allow brands to create offers that shift slower-moving inventory, such as running shorts, as part of an offer alongside the more popular shoes. This benefits everyone involved, driving sales for the brand and the store they are stocked in, and the customer by giving them better and more relevant deals.
Retailers can also take this one step further, creating more innovative connections and partnering with businesses they do not work directly with, all within a secure framework that prioritises consumer privacy. For example, the sports brand in the previous example might work with a healthy food brand to connect their data through a secure third-party platform, identifying new sets of customers with an interest in maintaining a healthy lifestyle.
Importantly, this allows the brand to identify and reach new customers with more relevant advertising, while also maintaining full control of who can access what data and when.
E-commerce will undoubtedly be an important part of the future of retail, but high street retailers with an in-store presence can capitalise on the rise of data too. In-store data analysis can provide a wealth of insight for businesses, helping them to compete with online-only retailers, and keeping Britain’s high streets alive and well. Through making better use of their customer data, adopting a privacy-friendly approach, and opening up to the possibility of data collaboration, in-store retail can thrive for many years to come.
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