Comet’s imminent fall into administration has once again highlighted the precarious position that many high street retailers find themselves in thanks to a flagging economy and a general consumer shift towards e-commerce.
The news is perhaps more surprising as, unlike many of its competitors, Comet had begun to alter its business model and integrate digital and mobile technology in-store as part of its multichannel strategy.
However analysts suggest it was too little too late, as successive owners had failed to see the benefits of e-commerce in a competitive market and the company also saw revenue from its audio visual products fall away as consumers moved to combined platforms on smartphones and tablets.
So Comet’s demise shouldn’t be seen as evidence that multichannel retailing can’t work on the high street.
In fact data from House of Fraser shows that the use of digital technologies in-store can improve both sales and the customer experience.
The department store reported a rise of 4.6% in like-for-like sales for August and September, with sales through the internet and mobile currently accounting for 10% of turnover – a figure that is predicted to grow to more than 20% within a few years.
In order to continue to grow sales revenues HoF is working with eCommera to bring closer integration between its sales channels to provide a more joined-up experience for customers.
One part of this strategy is to offer a customer loyalty scheme that offers the same rewards regardless of which channel the customer uses.
According to director of e-commerce Andy Harding:
The company’s multi-channel strategy is to encourage customers to shop across multiple channels by differentiating the service and through innovation.
Buy and Collect
In contrast to other high street brands, such as Argos, HoF’s move towards multichannel doesn’t involve reducing its number of brick-and-mortar stores.
Instead it plans to use technologies such as buy and collect and online ordering in-store to enhance the shopping experience.
More than a third (35%) of HoF’s online sales are now collected in-store, which is a great way of driving footfall into the high street. An impressive 84% of users rate the service as ‘excellent’.
Harding also told us that 25% of people make an unplanned add on purchase when in the store, so it’s clearly a great revenue driver.
Stats included in Econsultancy’s ‘How The Internet Can Save The High Street’ report show that 80% of UK consumers have reserved a product online for in-store collection, while 20% do this at least once a month.
Halfords introduced a ‘Click and Collect’ service three years ago, and now 86% of all its online sales are for in-store collection.
Do you reserve products online before collecting them in-store? How often?
HoF’s ‘Order in store’ service works the opposite way to buy and collect, as it allows shop staff to help customers order goods online that are out of stock in the store.
A quarter of HoF’s traffic comes from a mobile device and Harding says he regards mobile as “the glue that binds our store and online offer.”
The company launched its first mobile site in January last year, and in December partnered with O2 to offer customers free Wi-Fi in 11 UK stores.
The promotion involved several O2 services, including Priority Moments and real time location to deliver personalised targeting for House of Fraser’s O2 customers.
The aim was to drive footfall and brand loyalty, but also to increase incremental sales and drive purchase decisions around specific offers and promotions.
Free Wi-Fi is really a no-brainer for retailers these days, as the common fear that shoppers will simply check prices before buying online doesn’t really hold water.
According to a recent Econsultancy Multichannel Retail survey, 43% of UK respondents said they had used their mobile to compare prices and look at product reviews while out shopping, up from 19% in 2011.
As with purchasing on mobile, the likelihood to have researched price information and reviews increases among younger respondents.
Have you used your mobile to compare prices and look at product reviews while out shopping?
Stats included in our High Street report show that Deloitte estimates that around 6% of in-store retail sales will be influenced by smartphone use this year, equivalent to £15.2bn of sales.
This is almost double the value of direct purchases made through mobile, which Deloitte puts at £8bn in 2012.
If this prediction comes to pass, and it may even be a conservative estimate, then it is the brands and retailers that use mobile effectively who stand to benefit from this trend.
One of the more experimental aspects of hoF’s multichannel strategy are its ‘.com stores’ which are currently being tested in Aberdeen and Liverpool.
Instead of displays of shoes, clothes and accessories, shoppers are greeted by banks of iPads, computers and interactive screens - giving them access to more than 1,000 brands on line, in a small physical store location.
Staff are on hand simply to help customer to use the technology and navigate the websites.
The stores were inspired by the success of buy and collect, and Harding predicts the Aberdeen store will pay for itself in just 12 months.