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Digital vs. Local - What Approach are Retailers taking in 2018

Ryan Willis

While some people might expect that the rise of digital retail would slowly make the role of the local store obsolete, 2017 was the year when bricks and mortar started to fight back. Although we’re constantly inundated with news stories telling us about the boom in online retail, the fact is that the vast majority of sales are still being made in bricks and mortar stores.

In fact, despite the meteoric rise in online shopping, approximately 85 percent of all retail sales in the UK (excluding fuel) are still made in-store. The dominance of local bricks and mortar stores has even been recognised by internet giants like Amazon, which recently launched its first physical store. The in-store experience offers a level of personal service that can’t be matched by the web, and it is this experience that is driving shoppers to stores.

But while some large retailers may have the resources to focus on ‘omni-channel’ retailing, which gives them a complementary presence online and in-store, many smaller retailers are being forced to choose between the two. We’ve spoken to some UK stores to see what approach they are going to take in 2018?

Digital vs. Local

The digitalised approach

Many of the retailers we have spoken to in recent months are looking to scale back their physical presence and focus their resources on enhancing their presence online. To do that, they are reducing the level of stock they hold in their stores dramatically.

For example, in clothing retail, some stores are holding just one or two of each size of garment in-store, with everything else available online. That’s allowing them to turn their stores into what are essentially fitting rooms, so customers can see how the products look before going online to place their order.

The supermarkets are one example of this digitisation in practice on a much larger scale. In 2017, the growth of grocery sales online was 6.7 percent, compared to an increase in sales of 3.1 percent overall. With online grocery supermarket increasing at a faster rate than in-store sales, online specialists like Ocado and the traditional supermarkets will be looking to capitalise on the potential long-term growth online sales offer over the coming year.

The local feel

Despite the rise of online retail, there’s no replacement for being able to see, feel, taste and try the goods before you buy. This is particularly the case in farm shops and garden centres, which create a completely different type of buying experience.

We are even seeing that bigger stores are trying to tap into that elusive independent and local feel by giving their stores wooden refits. Established brands with hundreds of stores are allocating an area for produce from farmers to cater to consumers who are increasingly interested in supporting their local suppliers. The East of England have invested in doing just that, see how the Evolve S50i range has brought this to life.

One group of retailers that could feel the impact of this increasingly local approach are those in the middle markets, particularly in the supermarket sector. With budget supermarkets increasingly acquiring market share and high-end stores continuing to do well by catering to those wanting an artisanal feel, it is the middle of the road stores who will need to find their niche.

They need to find a unique proposition to cement their place in the market, whether it’s opening more local stores for greater convenience or offering a greater range of products in-store.

The local approach at scale

At Nabco, we can help you take the artisanal approach to scale, creating innovative shopfitting solutions which we can roll out across branches of every size. Design engineering is key is to find the balance between cost-effective solutions and pieces that look like one-offs that retain the artisanal feel. To find out more, take a look at our bespoke consultancy and design solutions or get in touch with our team.

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