5 ways eCommerce can help reverse physical retail space vacancies

By Ben Sillitoe

Instead of bemoaning the growing vacancy rates on high streets and in shopping centres across the UK, attention should be – and is – turning to what will fill the gaps.

The government-supported High Streets Task Force is offering support and expertise to individual towns and regions, empowering local leaders to shape their communities in a relevant manner and in keeping with the mood and heritage of each area.

It is just one example of multiple community-led projects and initiatives dedicated to improving UK placemaking, as retail becomes less of a dominant industry in many towns. These schemes are necessary, with PwC and Local Data Company research showing a record net decline in the number of retail and leisure sites in 2020.

According to the report, there were 17,532 closures last year, and a new low in the number of store openings (7,655), resulting in a net decline of 9,877 sites in operation. PwC said it is concerned we’re still to see the real impact of the pandemic, adding it expects many temporarily closed shops not to reopen.

More services such as libraries and education facilities, shared workspace areas, and residential property will – and are – filling some of the gaps. Communities should pay attention to demand for indie markets and competitive socialising in the form of crazy golf and other games, as part of finding the right formula to attract crowds again.

And as society hopefully practices what it is preaching, environmentally, more spaces should crop up in towns dedicated to product repair, recycling and refilling. Personally, I want to see visible examples of a more circular society and retail industry in action, and I think we will.

But this piece is about how eCommerce, specifically, can help reverse the decline in shop vacancies. With the help of IMRG members, here are five things worth monitoring.

1. Online retailers can open stores

Amazon has opened three Amazon Fresh grocery stores in the UK since the start of the year, and judging by the queues outside on launch day at Ealing, it’s going to be a footfall driver.

Retail Week consumer research conducted earlier this year illustrated that Amazon opening a physical shop locally would be a real trigger to get people using their high streets again. Amazon’s neighbours at The Broadway in Ealing, Wembley Park, and White City will be hoping that is the case.

Other previously online-only retailers have opened physical space, and their execs often cite the need to engage with consumers in person as a reason for operating shops. Whether in pop-up, showroom or traditional form, a smattering of online-first retailers opening stores would be a boost for placemaking teams nationwide.

2. Fulfilment hubs in the community

With rising demand for online retail set to be a permanent result of the coronavirus pandemic and warehouse supply under pressure, new areas to store goods for online fulfilment might be required in places traditionally used for shopping.

Many retailers are already leveraging ship-from-store capability, but dedicated mini warehouses for popular items could become part of the high street mix, creating local jobs and allowing faster delivery times and greener fulfilment methods.

Rachel Gilbey, managing director for general merchandise at logistics company Wincanton, says: “Areas of properties could be repurposed. 

“The new ‘free space’ would be ideal for fast-moving, high-demand products for online fulfilment – such as click & collect and home delivery – reducing lead times. This is an interesting area for retailers and the supply chain partners that support them.”

She adds: “Expertise in both store replenishment and online order fulfilment will be essential, but there are exciting options to differentiate and grow with single item picking automation that could be quickly deployed in existing set-ups.”

Alecxa Julia Cristobal, marketing content writer at digital payments provider AsiaPay, says: “Transforming physical stores as mini-warehouses can also reduce the cost of inventory management.

“Moreover, your brand can expand its reach to more locations and safeguard operative distribution.”

In-store Fulfilment

3. Hybrid physical and digital stores

Over time, retailers such as House of Fraser and Ikea have dabbled with stores solely for helping shoppers order online or collect items purchased digitally. Although these have now closed, many commentators still see a place for such a concept, and others are trialling them.

Perhaps to encourage usage and to attract people into stores, certain changes need to be made to click & collect services.

Lotte Weichenfeldt Schjøtt, marketing associate at multi-carrier shipping software firm Consignor, says: “To help combat store closures, brick and mortar stores can drive store footfall by offering an attractive click & collect delivery option.

“By ranking click & collect the first and only free delivery option in the online checkout, and maybe even including a small gift or store discount enhances retailers’ click & collect offering.”

Sean Sherwin-Smith, general manager for post purchase at HelloDone, a conversational commerce technology company, talks up the rise of “click & consult” as a powerful tool in optimising all channels in a retailer’s armoury.

“Click & consult will drive customers to physical stores and keep them coming back,” he argues.

“Using virtual assistants to connect customers with an in-store sales assistant and harnessing digital as a window to browse or book an appointment on the high street, will create a hyper-personalised shopping experience from start to finish.”

Likewise, Scott Lindsay, head of marketing for the EMEA region at eShopWorld, a cross-border eCommerce platform provider, says “click & collect stations” enabling online shoppers to try on items before committing to a purchase have significant potential.

4. Replicate online’s best bits

Instead of adopting an anti-eCommerce approach, multichannel and pure-play physical retailers can learn from the digital world, take what works, and deploy it their own way.

For example, Moonpig and other digital greetings card platforms have driven WHSmith and Card Factory to develop their own online personalised card services. But why can’t retailers leverage new technology to allow customers to print and takeaway cards from their stores?

Brad Houldsworth, head of product at eCommerce platform provider Remarkable Commerce, remarked: “The standard card-shop experience could be reimagined using technology – digital kiosks with in-built card printing could replace the physical stock.

“Blending social media tracking data with this technology could be a game changer, where the customer would login to Facebook, choose a friend, and the kiosk auto-suggests card options based on that users interests/likes/posts/pictures.”

Fresh-thinking like this is not restricted to the greetings card sector, and Ciaran Bollard, CEO of eCommerce platform provider Kooomo, urges all retailers to “listen and learn from the pandemic”.

“What have consumers missed? Therein lies the key to creating a compelling and unified experience,” he says.

“Look for ways to marry online and in-store offerings – buy online and collect in-store with touchscreen technology, simple returns processes that can begin at home and be continued in-store, for example. These will be the cornerstones for driving footfall.”

In store touchscreen

5. Online-influenced department stores?

Despite the decline of mid-market department stores in recent years, Next’s continuing success, supported by clever partnerships and concessions in its stores, shows the affordable physical department store isn’t dying; it’s just evolving.

Compelling propositions will always attract the crowds.

Could some of the department stores of the future feature online-only brands dipping their toes in physical space? It would make for great marketing, while ever-evolving shops of this nature would attract the younger crowds chasing newness, wouldn’t they?

If Boohoo buys any more traditional retail brands, you could envisage the company opening a department store to showcase its portfolio of fashion companies and give its customers a place to meet and engage with the organisation in ways they can’t online.

It wouldn’t even be revolutionary – it would just be a traditional concept digitally infused. It’s all speculation, of course, but something for the industry to think about.

Summary

As former Aspinal of London digital boss, David Williams, said during a recent panel session I hosted at eCommerce Expo 2021, retailers need to think of their stores less in terms of sales per sq ft and more about how they function in an omnichannel manner. Shops are part of a bigger picture, not necessarily the main event any more.

Considering and then acting on some of the trends and ideas we’ve listed, can help retailers get more use out of their real estate. They are ways eCommerce can help – and is helping – fill some of the gaps appearing in physical retail.

By Ben Sillitoe

Published 23/04/21

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