The Future Of Retail Is An Omnichannel Including Smart Tech

I saw a recent gloomy news story about the retail industry in the UK. Visits to high streets and shopping centers declined by 3.6% just in May 2024 alone. The trend is consistently down and has been for a year now – and that high point was only really achieved by people rushing back to shops after the chaos of the Covid pandemic.

Most countries are facing a decline in in-person shopping, but the UK has a special set of circumstances that make it quite expensive to run a retail business. Every retail company must pay a tax called ‘business rates’ that is calculated based on the value of the property they occupy — not how much the business trades.

This means that shops in locations such as central London are taxed at an extremely high rate – the tax is only focused on the property value and not the business itself. But as in-person shopping is struggling, online shopping is booming.

The UK now has almost 60 million e-commerce users. This means that UK citizens that have never shopped online are now in a tiny minority – almost everyone shops online. Online shopping jumped enormously during the Covid pandemic because most non-essential shops were closed, but one look at the data shows that as the economy recovered, most of the new shoppers continued to shop online.

So the message is clear. Consumers are shopping far more online and less in-store, but the real picture is much more complex. Retail brands need to think of their business in the round. To the consumer there is no distinction between an in-store and online experience using technology – there is just an interaction in some way with that retail company.

Walmart provides a good example in the US. Shoppers who have installed the Walmart app on their phone can easily shop online, but these people also visit the stores in-person twice as often as shoppers who don’t use the app. They also spend 40% more than customers who don’t use the app.

Retail analysts have found that shoppers who use an app when in a physical store are more likely to make a purchase and more likely to spend more. They use their phone to find out more information on the products they see in-store, they are then subject to targeted advertising and marketing that can also provide more information or special offers.

So the real question for retail brands is how to build a relationship with their customers by offering an app that makes it easy to shop from home, but also can improve their experience when in-store. It should improve everything about the shopping experience.

This is a very important observation. There should be no strategic divide between designing the in-store experience and designing the online experience — the shoppers you really want to attract are going to use both depending on what is convenient to them on that day.

Retail brands that believe they can reshape their industry just by calling for property tax cuts are failing to see that the industry has moved on. Online e-commerce is booming, but the smartest retailers are connecting the virtual experience to the physical. Tech is also improving in-store retail.

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