1.Develop in depth knowledge some of the specific issues that are currently regarded as critical to the future success of the retail sector
2.And be able to evaluate critically the tactical and strategic responses of retail organisations.
3.Apply a wide range of frameworks and techniques to the analysis of complex business situations to inform a range of critical business decisions facing today’s retailers.
4.And demonstrate critical, and independent thinking in the evaluation and synthesis of information.
Challenges faced by high-street malls in the UK
The high-street malls in the United Kingdom are surrounded with several challenges which seem to have affecting its performance. The domination of e-commerce platforms and the supermarket stores have collectively created the problems for town centres malls. This is true that the popularity of e-commerce sites like Amazon and supermarket stores like Tesco has attracted a larger audience. On the other hand, shopping malls in town centres have struggled to mitigate a few issues which have pushed it back in terms of attracting a mass audience. Town centres malls have loads of challenges that must be mitigated in order to remain competitive in the industry. The few issues that high-street malls have are management of High Street malls, affordable & large town centre car parking, limited range of products in malls, out of stocks issue, product pricing, crowding, and parking issue (Ntounis and Kavaratzis 2017).
Shopping malls at the high-streets are facing the declining sales while ecommerce and giant supermarket stores continue to accelerate. However, it may not be entirely true that e-commerce websites and supermarket stores have done all the destructions. Indeed, it may also be the strategies which have ruined the retailers at the High-Streets and kept them staggering with the challenges. It must be an interesting research to identify whether the retailers have made any significant change in their strategy. The study uses the responses of some selected retailers. It also observes the circumstances in the light of few selected theories (Parker et al. 2017).
The study is purposefully aimed at understanding the responses of the High Street retailers for the chosen issue. The study also checks whether the retailers have considered any effective move to counter the issue. It also highlights a relationship between some of the retailing theories and the existing scenarios in the retail market.
The growing popularity of ecommerce platforms and a dominance of supermarket stores have already produced worries for the retailers at the high-streets. Worries may not be just the disruptive innovation used by ecommerce sites & supermarket stores but, it rather can be the unresponsive move of the high-street retailers. Retailers might not have adopted the sufficient initiatives to address the urgency. However, there is indeed a need to select the list of sufficient strategies, so that, competency can be attained. Town Centres stores are still the shopping preferences for many; however, the declining sales are the thing to worry. Declining sales is an indication that customers have found other ways of shopping which is why they are not feeling like shopping in street-malls as they used to be in the past (Fletcher et al. 2016).
Factors contributing to the rise of e-commerce and supermarket stores
To understand whether the supermarket stores and ecommerce are disrupting the high-street stores, it is primarily important to analyse whether the retailers have tried to counter the competition. There must be some evidence showing that efforts have been taken. However, no significant differences are evident. High-street malls do still have issues in the form of infrastructure and others. The argument looks valid also on considering a few factors that influence the shopping behaviour. The following list of factors may be able to prove the established points:
Reasons for selecting ecommerce and supermarket stores: There are ample of reasons of customers giving preference to ecommerce shopping zones and bigger stores. The shopping experience at the ecommerce sites is very user-friendly. It just requires the knowledge of internet and the related process to be able to shop on the ecommerce sites. Customers are given a wide list of similar products to choose from. Comparison can easily be established between brands in respect to product quality, features and the prices. Once they are absolutely sure of which product to buy, they just need to book the product by following some sequential and interrelated processes. When they end up doing all the process they are intimidated with an approximate time of delivery (Pappas et al. 2016). Customers are not required to carry a large sum of money in their pocket which is never secured. They are not also required to carry their products. Products are rather delivered to their doorstep. This does not just secure the money but, also free them from the burden of carrying the products. Discounted offers are regularly offered to customers in ecommerce sites which are also one of the points of attractions (Bilgihan 2016).
Supermarket stores are the leading physical stores format in the UK. Top leading brands like Tesco, Sainsbury's, Morrisons, Aldi, and Lidl are all being the top choices for customers. Customers are presented to a variety of store formats like hypermarket, supermarket, discounted stores, and the convenient stores. Availability of range of products is also one of the factors that draws attracts the customers (Maguire, Burgoine and Monsivais 2015).
Facts that customers dislike of shopping malls: Shopping malls at the high-streets are continuously experiencing the declining sales. The declining sales can be due to various issues like insufficient car parking zone, out of stock issue, customer service and competitive pricing (Resnick, Foster and Woodall 2014). There are list of thing which customers do not like of high-street malls especially when they have far much better option in the form of e commerce websites and the supermarket stores. A limited range of products is one of the factors that fail to fulfil the changed shopping behaviour of customers. They now look for one point solution which means getting all the required products at just one place (Resnick, Foster and Woodall 2014).
Retailers' responses to the challenges
Human intervention dominates the technological interventions at the shopping malls. Staffs are available at the entire corner from product shelves to cash counters and the product inspecting belt. Despite such arrangements, the town centres malls appear as unorganised when being compared with supermarket stores and the ecommerce sites. Customer service is another issue which is inferior to the ones in supermarket stores (Törmä, Griffiths and Vaughan 2017).
Change in age-group behaviour for shopping: This also has contributed a significant boost to the online shopping culture. Initially, the elderly members or the matured ones of the family were the decision makers. Kids and toddlers were just the part of the group and they were not the decision maker. Now, things have changed drastically. Those who have sufficient money and the internet access can go for an online shopping (Gentina et al. 2014). On the other hand, the elderly or the matured age groups still prefer visiting to supermarket stores. They are more comfortable with this format of shopping (Gentina et al. 2014).
Price and features comparison: The layout design for products is different in stores than it appears on the ecommerce platforms. Product segmentation is done in such a way that different brands appear at the different positions. On the other hand, ecommerce displays similar products of different brands on the same page. Different brands can be compared in terms of price and features. Supermarket stores provide the similar experience but in a different way. Products of different brands are kept separated to make it easily identifiable for customers. Supermarket stores are well equipped with quality service, competitive pricing, and range of products (Abimnwi and Njuguna 2015).
In addition to this, the range of ecommerce platforms like Amazon gives continual discounted offers to customers. The frequency of discount offers is more for potential customers. Physical stores do also give the discounted offers but, under a separate format of stores. Such stores are generally known as “Discounted Stores” (Borraz et al. 2014). On the other hand, high-street malls are less innovative in terms of discounted offers. In addition, it does also have loads of other issues which modern customers dislike. Those issues include like car parking zone, availability of products, products range and others.
Retailer’s responses to the identified issue can be judged by comparing the responses with the factors which have contributed to the success of ecommerce and supermarket stores. Following factors are worth mentioning:
Management strategy: Online shopping platforms are known for innovative and risky moves. This can be understood from how Amazon has managed to be successful. The company's success lies in the leadership skills of CEO Jeff Bezos who represent an unconventional leadership style. The management team at Amazon operates differently than most others do. Employees are encouraged to take the primary role in contributing to the decision making process. The leadership style in Amazon is not afraid of such risky decisions (Bilgihan, Kandampully and Zhang 2016). The supermarket stores have also been successful in drawing customers. The reasons for such success are an effective management strategy. Tesco has been successful in attracting mass customers for its quality product and pricing. The infrastructural changes like the different store formats are also the key to success.
Effective strategies to mitigate the challenges
On looking the retailer’s responses to the issue, it becomes evident that the high-street retailers lack the entrepreneurial skills. It is difficult to say anything about why shopping malls have not been positive towards the significant changes. Despite the fact that young population in specific are a good customer of ecommerce sites, no significant attempts have so far been given to attract them. Instead, there should have been the changes in the identified areas, so that, customers can find reasons to return to it. However, the management strategy in street stores looks still the very same. Issues like out of stock, car parking, competitive pricing and customer service still persist. It also has a very less intervention of technological advancement which could have been of worth value at this moment. There is a need for some technological intervention to make the youth customers feel like returning to it. Millennials are expected to be the potential customers in the nearing future (Chahal 2015). Hence, a technological intervention is of utter importance for high-street malls.
Propagation of technology: The success of ecommerce is also due to a rapid evolution of network technologies. The first revolution was the introduction of 3G network. It boosted the sales of Smartphones and tablets. The evolution had continued and reached to a different level with the 4G network. These all made surfing or browsing lot easier and quicker. It has effectively reduced the dependency on browsing on PCs and in Cyber Cafes (Kachhavay and Thakare 2014). The intervention of upgraded technologies and high-end Smartphones has both triggered a change in shopping behavior. Now, there are no compulsions like visiting to physical stores to purchase the needful goods. Customers can now make it from being anywhere (Lissitsa and Kol 2016). Supermarket stores have moved in a different direction but, were able to pull up a mass audience. Lidl and Aldi are the examples.
Street malls are yet to take the benefits of the mobile network. They can do it supposedly in the form of an ‘App’ integrated with few features. Such features can raise the shopping standard and hence, the customer behavior. Customers need to feel that they are into a place which is also equipped with technological interventions. It is about establishing a point that street stores can also offer a convenient shopping experience. However, the primary operational objective will be to undone the identified issues only.
Attractive payment landscape: Online payment fails to deliver on most occasions due to server connectivity issues and fraudulent practices of hackers. Customers have mixed views for it. Ecommerce sites were smarter enough to introduce the cash-on-delivery mode for payment. More than half of the transactions happen through the cash-on-delivery mode (Taylor 2016). It has effectively reduced the threats of money theft. Additionally, customers can also ensure at the time of delivery that they have been delivered with a right set of products. This has helped to establish a loyal relationship between customers and ecommerce service providers (Pappas et al. 2017).
Payment landscape in high-street stores is much secured. Customers have to make the payment while being in front of the cash counter. However, it is time consuming also due to high queues at the cash counters. There are scopes for innovation in high-street malls; however, they need to resolve the identified issues to make customers feel like visiting again.
Aggressive competition: There are aggressive competitions between the ecommerce service providers. Extensive competitions have been in respect to attractive prices and the features. Ecommerce sites actually take an attempt to offer prices below then the actual MRP. In addition to this, free shipping facilities are also offered. Such strategies are used to attract more customers (Chen, Yan and Fan 2015).
Innovation: Innovation is a key to the success of ecommerce sites. The product layout design at online stores is much more different to the high-street stores. It enables customers compare the different brands in regards to pricing and features. There are a number of ecommerce service providers available to customers. Hence, customers have the wider choices and they can pick up any service provider depending on their choices. The moment customers visit the ecommerce sites they are able to see the different brands for a similar choice of products. A shopping experience as such was not ever realistic before the advent of ecommerce sites. In the high-street stores, customers need to visit the different corners to find the different brands for the similar products. Comparisons were never that much organized as it is on the ecommerce websites (Shafiee and Bazargan 2018). An effective utilization of organizational resources has been the key to the success for supermarket stores. The use of effective business models such as by Aldi is one of the few examples. The infrastructural developments in and outside of the stores are very rare with high-street malls. The range of products available in supermarket stores is bigger than it is in the high-street malls.
Innovation will be a key to the success of high-street shopping malls. The high-street retailer’s responses have been very positive regarding the change. They have indicated that they are focused on innovative strategies. This is why they have realized a few of improvements like pedestrianisation, management of Town Centres, Town Centres upgrading, and making the planning guidelines strict (Carmona 2015). However, execution is more important than just planning. Town centre malls are surrounded by a range of issues like the limited range in stores, out of stocks or unavailable size, customer service, crowding, pricing, and parking. These are really big issues and require extensive thought process for each of the identified issue (Carmona 2015).
The theory of change and the retail industry states that the external environment produces a reason to consider an operational change (Hayes 2014). Considering the theory, this can be stated that retailers in high-streets have identified the need for change and have also made up plans. However, it just depends on how good they execute it as every single issue require a staretgic thought process of the town stores management. For example, out of stock or the unavailable product size needs to be corrected by improving the supply chain operation. Supply chain operation along with logistics operation is a complex and challenging task. There is a need for an effective relationship with suppliers and to have a control on the logistics operation to resolve the supply chain complexity and reduce the out of stock issue (Hayes 2014).
Conflict theory provides another very important way to understand the existing situation in the high-streets. The theory suggests that industry rivalry is one of the driving forces of change. It also states that change is invariably led by an innovative body. The theory has given two very important points like rivalry drives for change and also innovative firm can only consider a change (De Massis et al. 2015). The town street malls face the heat of ecommerce sites and the supermarket stores. The competition does really exist between high-street malls and the other shopping platforms in terms of customer preferences for shopping. High-street malls were being able to pull up a huge footfall till the time customers were provided with a variety of shopping options. The change that customers have faced in the form of physical stores and the ecommerce sites have also changed their perception for high-street malls. They cannot afford to find tags like out of size or size not available. They also need good car parking zone. They look for competitive prices and also the customer service. The highly gathered zone in town centres malls is also a matter to worry. Competitive pricing is another factor that drives the modern day customers for shopping. However, high-street malls have not been able to establish their point in this regard (Carmona 2015).
Therefore, the town centres malls in the UK needs to consider a few changes which have been escalated in this study. The responses of retailers look very optimistic. However, the identified issues are not that easier. Each of the identified issue needs to be undone with effective management strategies. The supply chain operation is needed to be resolved in order to respond to the out of stock issue. The crowding inside the malls can be reduced by considering a few changes such as the availability of various bar codes on products to reduce the time at the cash-counters. Additionally, street-malls need to work on improving its customer service standard. The car parking zone has also remained a concern for customers. Moreover, the planned change for the car parking needs to be implemented, so that, issues are reduced. The one effective way through which the issue can be tackled is responding to the changing consumer behaviour. The conflict theory helps to understand the scenario and states that industry rivalry is a notification for change & that innovative firms can only respond to it. In the light of the policy recommendation, high-street malls need to move along with the changing dimension of retailing. The change is largely being brought up by a much modernised supermarket stores and the online shopping platforms. It means that there is a need to look out for the factors which prevent customers from visiting to street stores. However, it does not mean matching up with the innovation used by ecommerce and supermarket stores. It is not feasible as well. The different shopping stores are made for distinguished customer types. Hence, it is much advisable to identify the factors that have influenced their behaviour for street-malls.
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