If you are involved in retail in any capacity you will no doubt have heard the news coming out of the UK retail giant Next last week, admitting it had suffered one of toughest trading periods for 25 years. With annual profits falling just over 8% for the 12 month period ending January 28th, Next is, unfortunately, expecting a continued downward trend of in-store spending in the immediate future. An all-too-familiar experience across retailers globally.
Whilst the report is not out of line with Next’s own predictions for the trading year, it is a solemn reminder coming so soon after the news of Toys ‘R’ Us closure that even the largest and most recognisable retail outlets are not immune to the decline in consumer spending on the high street. Next actually saw an impressive rise of 7.4% for their online arm which will no doubt account for a larger portion of overall profits in an increasingly digital age.
For what seems like an eternity now, the industry has been preaching the need for shopping spaces to become multi-functional. But with margins tighter than ever, and profits in the retail sector down, it has taken some of the biggest businesses in the world to take this leap and experiment with multi-purpose stores before the rest follow. No longer should stores treat their locations as a place of transaction, but of a place of experience- think Nike’s Soho square property in New York City and House of Vans in London.
Sales associates in these locations are trained on apps like Myagi in creating experiences as engaging as the environment around them. No longer do these stores’ just offer places of transaction, they’re places for consumers to meet trusted advisors, seek entertainment and receive the best service possible.
Physical locations still playing an important, albeit changing role in Next’s retail strategy, and they have already started putting the building blocks in place for a ‘future-proof’ presence on the high street:
Announcing a partnership with Chef Gino D’Acampo, Next have already started expanding their offering, with Prosecco and Pizza restaurants set to become a feature of its stores across city locations. Already in operation in 2 of Next’s most popular locations, Next is set to spread the idea, diversifying the range of experiences available in-store. Chief Executive Simon Wolfson said the challenges it has faced has prompted the company to “take a fresh look at almost everything we do”, including the structure of its shop portfolio and the “in-store experience”.
Wolfson added: “We know there are restaurants that would like to be shops and shops that would like to be restaurants…Let individual hardworking intelligent people work out how best to use that property and then you will end with a much more vibrant market.”
It is also being reported that Next are looking at more than just the restaurant angle to create a wider experience in store. From travel to cosmetics, the retailer is in a welcomed period of transition, looking to adapt and innovate in order to meet the demands of modern-day consumers. All whilst trying to maintain their status as one of Britain’s most popular and recognisable names on the high street.
Only this week it was announced that motor company Ford is set to open a digital concession concept within Next’s flagship Arndale store in Manchester. The partnership will mean consumers can easily shop for a T-Shirt and a brand new car all in the same visit. Whilst this may seem an unusual crossover, the presence of Ford on the high-street will not only serve Ford with the opportunity to capitalise on footfall, but it also adds a novelty factor for the in-store experience and gives both Next and Ford brand representation to one another’s audience.
With Next set to have a refreshing and modern look over the coming years, they mustn’t forget many of the old adages remain. In-store experience will only be maximised by the ability of staff to craft emotionally engaging connections with customers. Whether advising on a T-Shirt, Prosecco or a new motor vehicle, Next will need to match their ambition to create an exciting ambiance in-store with a culture of learning and expertise to truly drive people from online to offline.
Whilst not all retailers have the finances to match the ambition of Next’s projects, all of them have the resources to ensure staff are prepared with product knowledge and excellent customer service skills that create experiences that can cement customers for life.
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