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Will retail survive the dramatic drop in footfall?

23rd Mar 2022
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Retail footfall in the UK decreased by 17.1% year-on-two-years (Yo2Y) last month according to the British Retail Consortium (BRC). The BRC data also reveals that High Street footfall dropped by 24.2% Yo2Y and was 1.1% lower than in December. As if these numbers do not sound bad enough, footfall in shopping centres decreased 37.5% Yo2Y, which was still below the three-month average decline of 36.5%.

The BRC has adopted this Yo2Y standard for comparison because it clearly makes no sense to contrast the present results with the lockdown period a year ago, so we are looking at a significant change in retail footfall from the period just before the pandemic began.

BRC chief executive Helen Dickinson said: “It was a slow start to 2022, with only minor improvements to UK footfall despite a significant decline in Covid cases. Indeed, it was quality over quantity in January; less people visited retail parks and shopping centres, but those who did went to more stores at each location. It is likely the January sales influenced this behaviour, encouraging consumers to shop around in their quest to find the best deals.”

Although the Omicron wave is fading, and more people are returning to offices the BRC prediction is bleak. Helen Dickinson said: “…retail footfall will not return to pre-pandemic levels any time soon.”

I find that I agree with the BRC for several reasons. Working patterns have changed over the past two years. Almost all office-based professionals had to work from home during the pandemic and many are now embracing a hybrid working model - they will occasionally be in the office, but not five days a week. This reduction in commuters affects city centre retailers that are close to large offices.

There has also been a significant change in consumer behaviour. Many people that were forced to embrace e-commerce or direct-to-consumer (D2C) model during the pandemic have found that they like this way of shopping. Why return to the supermarket for your breakfast cereal if Kellogg will send it direct to your home? The Amazon share price soared throughout the pandemic and if you compare the price now to a couple of years before the pandemic started then it has grown over 500%. A 2021 UN report (UNCTAD Global Review on Covid-19 and e-commerce) on how Covid affected commerce and trade states: “ [the] accelerated trend towards e-commerce seen during the pandemic will be sustained during recovery.”

This is the reality. A mixture of changed shopping habits and fewer people commuting to city centres has led to a dramatic drop in retail footfall that appears to be a permanent reset. Retailers cannot change commuting patterns or consumer preferences for D2C so they need to focus on what they can change.

If your e-commerce offer is limited, then build it out further - make it easier and more fun to order online. Explore D2C opportunities. Consider your customer, their needs and how they approach a purchase. Draw them in with options and alternatives to keep them on your site. Connect all this e-commerce activity with your stores. Make returns and collections easy at local stores or through local carriers. The pandemic has shown that those retailers who make it minimum friction to return goods, have increased repeat footfall. Customers don’t want a hassle if the purchase isn’t quite right. Make your physical stores more visual and experiential. Integrate the in-store experience with the online - especially for special offers and recommendations. The personal experience you receive online needs to be replicated on the High Street.

IKEA is a great example of this blending of the online and offline experience. Their new retail stores in London, including one on Oxford Street, show that they are moving far from out-of-town megastores and getting closer to customers - plus their online service includes highly sophisticated options like Augmented Reality to check if your new furniture will fit in your room.

There is no silver bullet that can revive footfall after Covid, but if retailers focus on improving the customer experience, then they can thrive by meeting customers where they want to be. Customers now crave and expect shopping to be an experience, not just a chore and retailers will need to rise to that new way of thinking.

Let me know what you think about the changing footfall patterns in British retail. Leave a comment here or get in touch via my LinkedIn.

 

 

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