The death of the high street has been pronounced many times in recent years, normally after another major retailer has fallen into administration.
However there are occasional signs that offline retail can survive as long as it adapts to face its new reality.
After many years as a pureplay online retailer, Cloggs is seeking to expand its business by establishing high street stores in towns across the UK.
It began with a boutique store in Shrewsbury in December 2013 and will open another shop in York before the end of this year. The plan is to open as many as four new shops in the first half of 2015.
To find out more about Cloggs’ multichannel strategy I spoke to managing director Chris Thomas…
Why did you choose Shrewsbury?
Prior to being acquired by JD Sport two years ago, Cloggs was a pureplay retailer selling branded footwear.
This included a broad range of products and price points, as the team had become very skilled at identifying pools of traffic, drilling into it and converting those customers.
But after the takeover, we conducted research to identify gaps in the market and deduce which demographics the brand should be targeting.
It was decided that the brand should appeal to the middle-England mum and her family.
This didn’t mean having a female-specific product range, but meant targeting mum as the lead purchaser as she then helps choose for the kids and husband as well.
Once we had a customer in mind, we had to look at logistic factors such as where brand distribution was available and where there was a good unit for us to move into.
We also wanted to avoid major urban centres. There were three or four contenders and Shrewsbury ticked all of those boxes.
Clearly you don’t believe that the high street is dead?
There was a lot of talk last year about the death of the high street, but the mobile web has helped brick-and-mortar stores to fight back.
In Shrewsbury we’ve seen evidence that people come in-store and use their app or the mobile web to browse prices, but then want to convert in-store.
There’s definitely a case that the high street has fought back thanks to mobile.
But empty shops still blight many town centres. Are there enough brands like Cloggs to ensure offline retail continues to thrive?
Another factor worth noting is that the relative cost bases for the high street and ecommerce are now becoming more comparable.
The online cost base is inflated due to increased competition, and then you’ve also got high street landlords becoming a lot more flexible, though that’s not uniform across the country.
It makes opening a store that much more achievable now compared to five years ago.
Back then there were high barriers to entry, such as ten-year leases, so it was more difficult to get going.
But the two P&Ls are far more similar than they have been for a while, which is helping the high street.
Does your store incorporate a lot of digital technology?
Not at the moment, but we’re working hard to make sure that digital and multichannel experiences are very much part of the business model.
By the end of the year our systems will be completely aligned, but at the moment they’re operating separately.
The next store we open in York will have digital kiosks and a set of iPads with a tailored version of the website.
Does your mobile app act as a loyalty system in-store?
That’s something that’s in progress, but it will also go further than that.
We want people to be able to use the app to browse product information, receive targeted promotions, or scan barcodes.
I think iBeacon technology is quite interesting and something we’d be looking to include as well.
But we need to be sure we’re not bombarding the customer, as push messaging can be a little bit invasive if it’s used in the wrong way.
There are ways of using iBeacons for customer service, such as a welcome message when they come into the store, or to give customer service details.
At John Lewis store staff are given credit for online sales within a certain proximity to their location. Is this something you’ve looked at doing?
I think John Lewis pioneered the idea of attributing online sales to store staff, and it makes sense.
If the two experiences for the customer are going to be seamless – and that’s what it needs to be if it’s going to be fully exploited – then the staff in-store have to be full bought into it.
That means that sales in a certain area have to be attributed to that store otherwise you run the risk of disengaging with the staff and the concept gets diluted for the customer.
How has the Shrewsbury store impacted sales in the area?
Sales growth in Shrewsbury is outstripping growth in sales online.
I haven’t put too much emphasis on it at this point because it is one store in one location, but there is evidence to suggest that the move offline has worked for us.
House of Fraser has concept stores that hold no products – instead people can just browse then order online. Was this something you considered?
No. I like the concept but it’s not something that would work for us.
If you’re a brand of a certain scale I can see how the economics work, but from where we’re at it’s not something I can see in our evolution.
What about pop up shops? Was that an option?
Yes, it’s something we looked at. The pop up model has the wrong connotations, as it’s often just associated with having a three-week opening for Christmas.
A 12-month pop up can be done in quite a cool way and it can help a new startup business get a bit of presence and cash flow, and give it the first rung on the ladder.
But those sorts of deals weren’t available five years ago. The high street has had to change the way it approaches leases as it just couldn’t compete before.
Do you find that people who visit the store tend to be familiar with the Cloggs brand?
We get a good representation of Cloggs customers, possibly more than I thought there would be actually.
Part of our retail plan is to build our brand. We’re fairly well known online, but not on the high street for obvious reasons, so we want to build awareness through these retail outlets.
How quickly will you be rolling out the new stores?
It’s not for me to say at the moment as it’s JD that is backing the operation, but each one clearly has to be successful,
We believe there’s potential for the brand to gain access to a huge part of the population that isn’t currently being catered for.
I’d certainly like to be in a position where we increase the rate that we’re rolling out the stores, but they need to be successful one step at a time.