Why making better use of data is key to the high street’s survival
Vihan Sharma, the European Managing Director of LiveRamp spoke to Business Leader about the importance of making better use of data in order to secure the survival of the UK high street.
After a brutal year for the British high street, the collapse of Arcadia was not a huge surprise, nor was the following announcement that ASOS had struck a deal to buy its most popular brands, Topshop, Miss Selfridge and HIIT.
Ten years ago, it would have felt implausible that a retailer as iconic as Topshop – the epitome of British fashion in its heyday – could fall into administration, but over the last decade, digital has changed the retail landscape irreversibly, with COVID-19 only accelerating the shift away from brick-and-mortar.
The rise of online retailers such as ASOS, and also Boohoo, which recently agreed to take over Debenhams, has been the other side of the story. These online retailers were so far ahead of the game in terms of digital that it was only a matter of time before physical store retailers ceased to offer competition.
While we should certainly celebrate the achievements of these online retailers as great UK success stories, the future of the British high street looks uncertain. The reality is that high street shops have for too long under-invested in new technologies. When the pandemic hit, many found themselves scrambling to create an infrastructure that could successfully accommodate e-commerce and help them more effectively engage customers digitally. Online retailers such as Amazon, ASOS and Boohoo on the other hand, immediately had the upper hand with digital and data strategies already at the core of their business.
For traditional retailers to survive the final few months of lockdown they must act fast and decisively. Creating an effective data strategy is one way to make a real impact, enabling retailers to connect to customers and develop impactful marketing strategies.
Many retailers are still not leveraging the value of their first-party data. Understanding this data and investing in a framework to support their commercial goals and connect the dots between their online and offline data can be complex, but when done well, can be transformative. A robust data strategy could help struggling retailers deliver more accurate and relevant marketing by engaging with both existing customers and new ones at the right time, ultimately generating better business outcomes such as higher revenue. High street retailers need to invest in their first-party data strategy to better engage the customer and have a collaboration strategy to engage their brands partners to deliver a more coherent customer experience across all touch points.
In practice, a high street department store might partner with a luxury perfume brand it stocks, which doesn’t have a high street presence of its own. The transaction data that the store holds is incredibly valuable to the brand, as it allows them to connect engagements customers have with the brand’s digital presence to shopping behaviour that occurs in the department store. From here, the brand can measure the impact of their digital campaigns on in-store sales, and better understand who their customers are, the products they buy and what marketing strategies might better reach them in future.
In the case of ASOS, the new family of brands it has absorbed through its Arcadia deal now provides a treasure trove of data insights. Understanding their joint customers’ engagement across all brands and through myriad touch points will paint a stronger, clearer view of the ASOS customer and provide opportunities for personalisation and better customer experiences.
For physical shops, the new roadmap out of lockdown provides a new wave of optimism, but returning to business as normal will not stop the wave of digital change that has swept the retail sector globally. As much as UK consumers want to support the high street, their buying habits have changed dramatically in the last 12 months and loyalties will lie with the retailers who have offered outstanding customer experiences during lockdown.
Competition for the UK consumer will remain fierce, but through data collaboration it does not need to be an ‘either or’ between digital or in store. With the right investment and data framework, retailers and brands can create a new balance that supports both experiences, and enables the UK high street to adapt and flourish.