Our High Streets Initiative has been helping to future-proof one of the most recognisable symbols of Britain’s retail economy. Now, the founder of retail software provider Vend, Vaughan Rowsell, explains how to combat the three biggest retail challenges facing small high street business owners in 2018.
This year saw a huge rise in store openings, with an average of four new stores opening in the first quarter, according to data from the British Independent Retail Association (bira). If we compare these figures to 2016, when there was a net increase of justfour stores over the whole year, it’s clear that retail growth has seen a peak in 2017.
Our customer data supports this too, finding that sales were up 15 per cent when compared to the same period last year. To put it simply, existing stores are enjoying higher turnover and stronger profits, resulting in an increase in stores opening.
But you might not think that was true if you looked at the news. Streams of headlines suggesting rising inflation, cautious consumer spending and most significantly, warnings of high capital and operational costs showcase all of the issues weighing heavily on independent retailers wishing to grow and succeed.
So how can store owners be prepared to tackle these obstacles? Here I will discuss the three biggest challenges facing independent retailers and how they can overcome them.
Leading customers in the direction of the high street
Whilst we are seeing increased high street traffic across the UK over public holidays, recent Ipsos Retail data shows that footfall has crashed 22.2 per cent since 2007. These results represent the wider challenge retailers are facing in their attempts to get people off their computers and out of their homes. The convenience of ecommerce and mobile shopping is allowing customers to find everything they need without even getting off the couch.
First and foremost, retailers need to be inventive and innovative in what they offer to lure potential customers back to the streets. Offering exciting and memorable in-store experiences, which go beyond their products can help. We see some incredibly clever examples amongst our customers.
Our Bricks & Clicks video series is helping retailers strike a balance between growing a brand online and establishing a physical presence
For example, urban surf store By WalskI taps into London’s frustrated population of land locked surfers, by hosting screenings of surf competitions and tutorial videos on a biweekly basis.
This not only draws customers to the store, but it also encourages a sense of community and loyalty that has transformed the store into a meeting place and a destination for London’s surfer community.
Survival of the fittest: Competing with the larger retailers
it’s hard to deny that economies of scale pose a major challenge to independent retailers. Whilst their unique characteristics make them more attractive such as the ability to offer more personalised service without the buying power, these characteristics don’t quite cut the mustard when it comes to competing with the industry giants.
Large retailers with deep pockets for integrated marketing campaigns and the purchasing power that comes with ordering products on a national scale creates a playing field that independents cannot compete on.
Additionally, expectations from customers such as a full suite of omnichannel services that large retailers now provide, many smaller stores find hard to replicate as they focus on the day to day running of their businesses.
So how can independents overcome this? They need to be more enterprising and smarter in the way they operate, thinking outside the box of their four store walls. Being smaller means these retailers actually have an advantage they can be more nimble.
For example, pop-up stores at festivals, trade shows, and even street markets offer fantastic opportunities for independents to test new products, and new areas and audiences, and share their passion with a fresh group of customers.
Pop up locations are also becoming ever more numerous and affordable, and intelligent apps such as Appear Hereallow independents to quickly and cheaply book unusual pop up spaces across the world’s cities.
Business growth whilst tackling looming overheads
With wider economic fluctuations impacting independent retailers as well as the industry giants and the costs of doing business increasing, exploring ways to reduce overheads is key.
One solution for many retailers is moving to cloud-based software. Most significantly, cloud-based systems for areas such as point-of-sale, reporting, inventory management, accounting or staff management, are more affordable. They are built on a model of low-fee subscriptions, which keeps costs down whilst providing access to the innovative technology larger retailers use.
Weve found that, on average, a retailer saves 2, 000 per month just by switching from their old till system. The efficiencies that come from cloud technologies also create significant cost savings.
Cloud software also dramatically reduces the on-going service and upgrade costs associated with more traditional proprietary-based systems and is far faster and more flexible when opening a second store, setting up an ecommerce site or launching a pop-up outlet.
don’t let these challenges dampen spirits. Every day we see amazing work from independent retailers, displaying shows of innovation through upgrading their systems and offering better in-store experiences. The biggest leap is simply to start.
Vaughan Rowsell is the founder and chief product officer of VendRead more from the Business Advice High Streets Initiative😕
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