Deserted and boarded-up stores are becoming a common sight in almost every High Street across the UK. What used to be central to our very community are becoming a mere shadow of their previous status. The Government, almost in despair, has actually accepted the CRR proposal to turn many redundant shops into homes.
“According to a report by the Centre for Retail Research (CRR), published in 2013, the outlook for High Street retailing by 2018 is looking pretty bleak. Total store numbers are expecting to fall by some 22% by 2018. Community based high streets will probably see nearly 30,000 more streets closing their doors for good. How can this trend possibly be reversed? This article examines causes, and potential solution, to this major threat to our community-building High Street retail outlets. “
How did we get into to this situation? Not only has the spread of out-town retail parks become almost the norm, but the relentless increase in on-line shopping has definitely left its mark on the High Street.
Another phenomenon that is having a massive effect on the decline of the High Street retail community is the massive growth in ‘CashBack’ web sites, such as TopCashback, Quidco. Even offers from any of these sites have to be examined carefully. It’s no point going for say a ‘£50 CashBack’ for a product or service that could be purchased for a lot less from other retailers. Focus on the cheapest deal, not the biggest cashback.
But the problem here is that these organizations actually destroy loyalty. The shopper will just continue to shop around for the best cashback before they make any future major purchase – based on price alone. Another problem with using cashback sites is this. If you buy say a TV in this manner, from some remote, or online purchase, what happens when it goes wrong? Buy a good brand of TV for instance on-line, and it goes wrong, don’t expect rapid service at your home – usually the device will have to be collected and sent off to some remote workshop – not much good when the TV breaks, and you are a pensioner, or a frazzled Mum with 2 kids over the holiday.
Loyalty AND Cashback. The ingredient for success in our High Streets would seem to be a combination of Loyalty and cashback, and although at first glance these may seem opposites, if they can be combined successfully, the result will be a dramatic rise in the fortune of our community-based retailers.
Most retailers, whatever their size, realize that a Loyalty program of some sort these days is almost mandatory to ensure survival in this alleged ‘bigger is better’ attitude. Almost every retailer has a loyalty program of some sort, whether it is a simple coffee shop card, where you get your tenth coffee for free; or at the other end of the scale you have Tesco’s ClubCard, with millions of subscribers, or Sainsbury’s, who have adopted the Nectar Card, with well over 20 million users in the UK.
Limitations. Both card schemes will produce a basic cashback of around 1% on spending; the main difference being that Tesco ClubCard can only be used in Tesco outlets but the Nectar Card can be used across thousands of retailers. Neither scheme however support the idea of rewarding current cardholders when they recommend their friends (word of mouth, or network marketing). Neither do they do much to drive new customers to their stores – this still the remit of massive direct advertising campaigns. The figures spent here are astronomical, and could never be matched by small to medium size High Street retailers.
Combined Universal Loyalty and Cashback card systems. There are two contenders currently in the UK (Lyoness and IDEA REWARDS CARD) that operate a universally accepted combined loyalty and cashback program, that are also aimed specifically in building up new loyal customers, and improving the loyalty of existing customers, for independent retailers. These systems also utilize some very powerful network marketing utilities, which will dramatically reduce the need for expensive ‘pay and pray’ direct advertising. Both systems drive customers to the retailers by clever use of social media, so the retailer only has to pay a small percentage of the sale in marketing costs – only when a customer actually spends in the store. The majority of that small cost gets paid out in Member Benefits – increasing even more the customer’s level of loyalty to the retailer.
Both systems operate on totally different business models, so care should be taken when making your choice.
However, at the heart of both systems is the fact that small businesses are able to create customer loyalty by offering cashbacks of between 2 and 5% on every purchase. On an average spend of say £50, that is just £1 to £2.50 cashback per visit. It’s interesting how a lot of people turn their noses up at that small payment, but most people these days spend more like £500 – £1,000 every month on their overall spend. OK, most of this spend will not be in small High Street outlets, but more likely will go to the big out-of-town supermarkets, and even for on-line purchases. This is the beauty of a system where small to medium sized retailers become SME Loyalty Merchants. These guys, unlike the big Key Loyalty Accounts, can sign up their shoppers as free members of the Loyalty Club. When their customers then shop in any of the Key Loyalty Merchants, the small guy gets paid a small Loyalty Reward. With Ideas, this pays down to 7 levels, so if the SME’s members sign up their friends, down 7 levels, the SME gets paid this bonus on every transaction.
So, in conclusion: –
- There are ways that small retailers can now actually benefit from the shopping spend by their loyal customers, even when they visit their arch-enemies – supermarkets, and on-line shopping.
- The small retailers can dramatically increase the quantity and loyalty of their customers, new and old, and also cut down on the direct marketing cost of driving new customers to their store.
- By joining together in community-based shopping hubs, these small retailers can all build on this common database of loyal customers.
Isn’t it time you joined forces with your independent neighborhood shops, involve your local Chamber of Commerce, and your Local Authority, and stop the rot in YOUR High Street community?