As Another Two Retailers go into Administration, where is Brick & Mortar Going Wrong?

6th March 2018

Commercial Property

Last week saw another two retailers file for administration as growing competition and dwindling customer numbers have resulted in declining sales. Both Toys R Us and Maplin brought in administrators within an hour of each other on Wednesday morning, and it ponders a question of how brick and mortar businesses can compete with the ever-growing e-commerce market.

Why Are Customers Turning to E-Commerce?

The most common reason consumers are turning to shopping online is prices, as often a product will be cheaper online because online retailers have considerably less overheads than a high street retailer.

The second reason is convenience, with many online stores offering next day, or in some cases same day delivery, people don’t have to wait as long for orders as they used to. A company to note here is Amazon who offer unlimited next day delivery, same day evening delivery on early orders, and Prime Now, which can get products from warehouse to your door in under an hour.

Take those two reasons into account and you have a convenient service, with super-fast delivery and often cheaper prices on products.

The Rivals

Looking at Toys R Us as the main case, in recent years we’ve seen rival retailers to them thrive, so what are they doing differently? One notable thing parts the two, and it’s retail theatre. It’s easy to forget that in 2018, a lot of children have smartphones and tablets, providing them with endless entertainment opportunities, and because of this engaging them with toys is difficult.

Retail theatre is a simple concept and it involves hiring staff whose only job is to be out on the shop floor demonstrating toys, dressing up as the hit character of the moment, and generally engaging with the customers, and whilst the parents are paying, the customers are the children choosing the toys. Retail theatre starts at the door and continues throughout the shop and that provides an engaging experience, a fun environment, and more importantly a reason to make the effort to go to the actual store, not just order something online. In recent years, customers comments suggest that at Toys R Us, retail theatre is no longer happening, despite really being the pioneers in the 90’s. Where they’ve stopped, the rivals have started, and this could well be a factor as to why customer numbers have declined in recent years.

This is just one element, and whilst there could be many different reasons for the outcome this week, this is the one that appears to be resonating with customers the most.

How Are Other Businesses Doing It?

Many businesses now have retail theatre but in different forms. Some examples include beauty stores, whose staff will be recommending products to each individual customer, handing out samples, and giving makeovers.

A perfume shop’s staff will be looking to understand the scent variety the customer is looking for and recommending different fragrances based on that, allowing the customers to sample each one before they buy it.

Staff in a computer shop would be asking customers what they need a device for, it is reading? Working? Browsing the internet? Watching Netflix? And from that advising and showing the best products for their individual needs, showing them how to use them, letting them try the device before they buy. Of those three examples, none of them can be replicated with an online experience, you can’t smell perfume, you can’t try a device, and you can’t get a makeover.

That is how retail theatre works, it’s a personal touch with enough staff to handle to the volume of customers so no one is ignored, and every person who enters a store, has a reason to come back, and not just buy the product online. If retail is going to fight back with e-commerce, then the first step is retail theatre.

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