No wonder the retail sector is in a mess

Offline and online retail is in a muddle

Shopping is socialThe retail industry is fond of statistics. They love telling us that “like for like” sales are up. Or they love quoting the “fact” that growth has risen year on year. They even love telling us that this month we spent more than last month. The problem with statistics is that they can say one thing, whilst meaning another. Furthermore, retailers appear to be fond of quoting statistics rather selectively. And it is not only them, the media tells us that retail is booming, when actually it might not be.

For instance, earlier this month we were told that UK retails sales had hit an eight month low at the same time as being told that they had accelerated. Technically, of course, these two articles are correct; one month of “acceleration” can still happen even if over the previous eight months sales were down. In other words, we have to be very careful about what we read on retail – the complete picture is not always correct.

People watching helps analyse things

Watching people as they shop is part of consumer psychology. And when you watch people shopping in the real world bricks and mortar stores, it doesn’t always tally with what the retail statistics tell you. The other day, for instance, I stood in the middle of Oxford at 2.30pm on a weekday afternoon. I counted 100 people walking in one street. Only two of them carried any shopping bags. I then went to another street and counted a further 100 people, of which only three had any shopping bags. I then went into a shopping centre and counted 100 people and only one of them had a shopping bag. Out of 300 people in a busy retail area only six had any shopping -and three of them were supermarket bags.

Retailers might have relatively high footfall – another figure they like quoting – but if people walk into your shop, look around and do not buy anything, that’s a “#fail”. Most of the people I saw were not buying anything. Most of their activity was social. Indeed, the only places with queues were coffee shops.

Where is the growth?

This year in the UK the amount of what we buy from retailers has fallen. But the value of what we buy has risen. Retailers can point to increased money in their tills – but that has only happened because of rising prices. We are buying fewer items from retailers but paying them more.

Some big retailers, though, can point to volume growth. They can legitimately say that the amount of stuff bought from them has risen. But what they do not then like saying is that almost all of that increase has come from their website. Almost all the growth in the UK retail market is happening online. And that is causing a problem for offline retailers in bricks and mortar stores.

The real issue for bricks and mortar retailers

Online stores are convenient, true. But so are real world stores. You can nip out of the office, stroll down the street, buy what you need and take it back to the office with you, for example. You might be able to order online from your desk, but you then have to wait 24 hours to get the item. That is often more inconvenient. Saying that online is convenient misses the point that real world shopping is also frequently highly convenient.

The problem for real world retailers is that online retailing has changed behaviour and expectations. You can “walk in” to most online retailers and within moments find exactly what you want. The ease with which you can find things is speedy, the range available is wide and checking out is easy and quick. That means nowadays when we walk in to a real world store we expect to find things easily, to have a wide range and to pay quickly.

A little test

So, I put this to the test and pretended I was going clothes shopping in three different retailers – Debenhams, Marks and Spencer and Primark. Would these stores make it easy to find things, have a good range and make checkout quick and easy? I went to these company’s stores in three different towns.

My cursory findings did not impress me. Each of the six stores showed differences from one town to the next. There was no consistency between the way things were displayed, the range available or the way you could pay. Indeed in Primark in Reading they have completely hidden the checkouts behind a massive set of pillars at the back of the store; it is as though they do not want you to pay. Meanwhile, in Marks and Spencer they appear to think that the world is made up of people who are not the average size. The UK average waist size for men is 38 inches. So you would expect clothing in these stores to reflect that with half of their items available below that average and half above. Not true, something like 80% of the sizes available are below the average waist size. Not to be sexist, I checked some women’s clothes racks too, only to find that the majority on sale were below average dress size. In other words, the range of items stocked in retail clothing stores doesn’t, at first glance, to represent what people actually want to buy.

Is it any wonder that bricks and mortar retailers are struggling against the competition even of their own websites? Their real world shops make it hard to find things, awkward to pay and do not have the range people want.

Until the bricks and mortar stores respond to the growing change in behaviour and expectation triggered by online shopping they will continue to lose out. That convenience of being able to nip down the road to a shop and get something now is being eroded all the time bricks and mortar retailers restrict ranges and make it hard to pay.

What it looks like is that bricks and mortar retailers have given up – they appear to be saying “we have lost to the Internet”. That’s why you find towns packed with people going to coffee shops but not carrying much shopping any more. They did that at home before they went out.

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