With high-street stores going bust left, right and centre, it's hard to believe that some of the UK's best-known retailers, including H&M, Gap and Zara, do not yet have an e-commerce site. It either reveals a lot about the complexity of retailing across multiple channels or the antiquated views of traditional 'bricks and mortar' retailers about the potential of online shopping.
Yet it's clear that the web's influence as a sales channel is only going to grow. Last December, UK shoppers spent a record £4.67 billion online, according to the IMRG Capgemini e-Retail Sales Index. A figure that is prompting smart high-street retailers to realise they can achieve greater sales and customer loyalty by making their online and in-store shopping experiences work seamlessly together.
Nike is one of the market leaders in this space. Back in 1999, it came up with the concept of NikeiD, which lets customers create their own Nike product at nikeid.com, share designs with friends and buy through the website. It brought the online concept in store at NikeTown London in 2007 and, most recently, launched NikeiD Touch, a touchscreen window at its Neal Street store that offers internet-style interactivity via the shop window.
"The internet has given consumers the power of control and creativity. We're bringing this to life in our stores," says Sharon Tomkinson, head of marketing for Nike Retail. "It's a great example of the virtual world driving real-world experiences."
Enhanced retail experience
Another high street retailer that's been working hard to blur the lines between different retail channels is Specsavers. "We see the website working really hard with the overall retail experience," says its director of e-commerce, Mark Trustum. "We've been showcasing the whole Specsavers frame catalogue online now for several years. The next logical step was to enable customers to virtually try them on and see what the frames look like."
The digital mirror is a slick application that lets a customer upload their photo to the site and see what different frames look like superimposed on top. Since it launched last July, it has proved popular: "Between 25 and 30 per cent of visitors to our site use the digital mirror, and they're trying on millions of frames," he says. "If customers like a pair, they can order them online but have to pick them up in store so a specialist can check they fit properly and are compatible with their prescription.
Elsewhere on the high street, HMV is trialling internet-style kiosks that let shoppers check stock availability and view film trailers. While Argos' 'check and reserve' service lets consumers reserve goods online and pick them up in-store. "Argos has seen enormous year-on-year growth in that channel," says Hedley Aylott, founder and managing director of Summit Media, which works with Argos.
Not all these strategies are new; Trefor Thomas, creative director of Brand Advocate, recalls some work he did for Vodafone in Harrods while at RMG Connect. "You interacted with the shop window using the keypad of a mobile phone to get an indication of what you might expect if you went inside," he says.
Thomas thinks more effort could be made to bring the in-store experience to life. "Given the amount of investment premium brands are ploughing into in-store design, I think they could do more to increase interactivity," he says.
Instead, most online investment made by retailers seems to have gone into using the web to replicate the in-store experience. Simon Clark, managing director of management consultancy, CVL, was bowled over by the customer support he received using an IM (instant messaging) tool on the Harrods website: "I made up a query about a belt to see if anyone was there," he says. "The person who answered was prepared to find the belt, describe it to me and email me a picture. The customer service was awesome."
Virtual walk-in wardrobes
High-street fashion stores have also been trying to beef up the online experience: Oasis, Coast and Karen Millen have each deployed a virtual fitting room tool on their websites, which lets users mix and match an outfit, and share it with friends via email or Facebook. The most innovative, however, are the pureplay online retailers that lack a high-street presence to promote their brand and products.
My Wardrobe is a designer shopping site owned by Sarah Curran, who used to run a London boutique called Powder. "One thing I was aware of from the beginning was the importance of retaining the element of a personality on the website," she says. Part of that comes from the customer service My Wardrobe offers - its email and phone number are displayed on every web page and anyone calling the company is put through to a sales assistant with a fashion degree. "I've met so many investors who say, surely all you want to do is sell product," she says. "But I disagree, as it doesn't create a loyal customer base." With this in mind, the company launched my-tv last year; also in the pipeline is a virtual fitting-room tool, which will allow shoppers to call sales assistants for sizing advice and invite friends to see outfits through social networks.
Room for improvement
Such developments are exciting and innovative, but unfortunately they're not the norm in the UK. "On a scale of one to 10, I'd give the market a two or three at present," says Steve Davis, international executive vice-president at GSI Commerce. "How many UK retailers have integrated to the extent that they can offer a 'buy online, pick up in-store' service? This capability actually gives high-street retailers the opportunity to better their online-only competitors and yet we're still not seeing it."
Perhaps UK retailers should look to their US cousins for inspiration? LBi's New York team was recently involved in a project for fashion designer Nanette Lepore at Bloomingdales. The agency developed a touchscreen mirror that lets shoppers take pictures of their outfit and send it to friends online or via MMS. Their friends can then suggest alternative products from the website. These appear as buttons on the touchscreen in the changing room and can be superimposed on the mirror image. "It's knitting the virtual and in-store experience together," says Iain Preston, client director at LBi.
Given UK shoppers are just as keen social networkers as their US counterparts, why hasn't the concept travelled over here yet? "UK businesses tend to take a lot more convincing of the value of these things," says Preston.
One reason why some UK retailers haven't invested in e-commerce to any noticeable degree yet is because it requires an overhaul of their IT systems: from the e-commerce platform right down to the tills in-store. "You're talking about a technology migration, so the scale and timing of investment is the biggest barrier for many retailers," says CyberDMG managing director Terry Hunter.
Integration across channels is key, agrees James Roper, chief executive of the IMRG (Interactive Media in Retail Group). "So far, pretty much all traditional retailers have done is build a website and stuck it on the side of their business," he says.
Only once multiple sales channels have been integrated can high-street retailers start to capitalise on their dual presence online and in-store. "My vision for the best multi-channel retailer is one that will allow me to research online, find out if a product is in stock and who to speak to about it in store, reserve it, book a time to pick it up, buy it, get a thank-you email from the store, see the purchase in my online account and receive an email that will incentivise me to buy something else related to that purchase," sums up Summit Media's Aylott.
With an estimated 400 retailers predicted to disappear off the high street this year, it will be the brands that are prepared to innovate that will survive. Funding is scarce and legacy systems need updating, but those bold enough to invest now will reap the longer-term benefits.