4-in-5 high street stores will survive

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High Street

A detailed new report of UK retail suggests 1-in-5 high street stores could close by 2018. It's time for the other '4' to act quickly and positively welcome fundamental change, says MIG.

In this article, we offer five top professional tips that draw on our extensive experience and success in this field. In the next issue, we will provide five more. Once again, using data effectively plays a central role.

The report suggests that some sectors do face an uphill struggle. But many others will succeed by forging new, ultra-loyal twenty-first-century customer relationships - online, face-to-face and via fast-changing social media channels.

New commercial environment
The Centre for Retail Research's (CRR) 'Retail Future 2018' report says that local demographics, a drop in spending power, changing social habits and the power of the internet will radically redefine retail shopping, with many casualties.

Survival is one thing. Prospering is another. MIG believes that the basic concept of the 'store' could change soon and for the better. Shops will almost certainly become critical two-way customer communication hubs.

We also have a long-term interest in customer development. In 1997, MIG first implemented its innovative Customer Farming process. The underlying theories are as relevant today as they were 16 years ago. Each element is now well-proven and recognised in many fields. However, whilst originally developed specifically for retail, only in the past five years have many retailers truly begun to understand their importance. To help, we have broken the process down into ten distinct steps. Here are the first five.

1. Customers - It's time for a mind-change. Stop thinking about shops, location, pricing, merchandising and the many other terms we learned as conventional retail best practice. Instead, start thinking about customers. Everything else becomes a sub-heading.

2. Know thy flock - When customers stop coming to your store, don't be in the position of wondering who they were. Capture their data now. Then you can keep in touch with them in future. When they do stop coming, you'll exactly know who to re-activate to get your business working healthily again.

3. Build your fences - Find a way to re-engineer your product offer so that you put inertia on to your side. Customers must feel not only that they want to buy from you but also that they have to because you have made sure they are 'locked-in'.

4. Search for the Prize Pedigree - 2 customers out of every 10 will provide you with enough future income to sustain your business. It is vital to know who those '2' are and how you will look after their future needs.

5. Customer Cultivation - Human nature means that even those '2' will stop buying at some point. You need to know who the next '3, 4 and 5' are, plus how to nurture them to replace your current Prize Pedigree customers. There are several very easy and quick things you can do to build future customer value.

Joining the winners
While the CRR report suggests that some industries may be more prone to failure - it names pharmacies and health and beauty stores, followed by music, books, cards, stationery and gifts - there are plenty of retailers who can adapt successfully. Many are already well down the line.

MIG's teams are more than happy to help. We can draw on examples of successful transitions that could be directly relevant to your goals and ambitions. In the next issue we will be giving you the second five winning top pointers to high street success.

For further information, please contact Catherine Owens on 01565 653000.

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