British Retail Consortium (BRC) figures show that footfall in retail stores fell by 3.3% in April 2018 compared to last year, marking a further shift in consumer behavior towards digital adoption.
Two Consecutive Months
The drop in footfall numbers for April was the second consecutive month where the trend away from visiting the physical high street could be observed, and in comparison to this time last year when footfall was on the up, it is seen by analysts as being significant.
Visiting Even Less – But Still Spending
The last time such a significant drop in footfall occurred (3.8%) was recorded was in 2009 when the UK was in recession and consumers were spending less as a result. Even compared to that, this year’s drop in the numbers of people visiting physical store locations is larger at 4.8%.
Despite the apparent fall in physical store visits, Barclays bank data shows that consumer spending is still on the increase.
What’s Happening?
Retail experts have noted a shift in consumer behavior towards digital shop visits rather than physical ones, based on a number of benefits including flexibility (in what goods they purchase and when), product/service ranges available, convenience, digital innovations enhancing customer experiences, and a predisposition towards leisure rather than retail spend.
This changing consumer behavior is forcing the retail industry to evolve and re-structure.
Increased Leisure Spending
One key trend that has been noted by analysts is the increase in leisure rather than retail spending by consumers. For example, a report by Deloitte based on the quarterly survey of more than 3,000 UK adults found that 2017 (last quarter) ended positively for the leisure sector, with consumer spending increasing in 7 out of 11 leisure categories compared to the previous year.
The areas that have shown an increase include experience-led activities, short break holidays, going to the gym, drinking in pubs and bars and attending live sporting events.
What Does This Mean For Your Business?
For retail businesses, these figures mean that the digital retail environment is posing many challenges, but the changes can also be embraced as part of a restructured strategy to remain competitive.
Many retailers understand that they now need to rebalance investment in physical and digital infrastructure, and change the way stores are used e.g. by adopting technology to engage people and to make stores more like centres for experiences rather than just places for purchasing goods. This is particularly important for younger consumer groups.
Retailers can embrace technology as an opportunity to deliver more value to customers whether in store, at home or on the move. Retail commentators frequently talk about the importance of the need to create a seamless customer experience between online and offline, and to develop an omni-channel platform. Improving and optimising the current experience that retailers offer customers, and replicating these as effectively as possible across all channels could be the key to staying competitive in the evolving retail business environment.
