Customer-centric Selfridges defies High Street gloom
Selfridges has not just survived in the internet age, it is thriving, according to Manu Tyagi, Associate Partner for Retail and Consumer Goods at Infosys Consulting. Its success highlights the huge advantages department stores have over online rivals, he argues.
The retailer has increased sales by 6% to £1.85 billion for the year to February 2019. Profits, however, slipped to £170 million, from £175 million the previous year, as it increased investment. This includes the flagship Oxford Street branch becoming the first department store in the world with a cinema from November.
Department stores give shoppers the opportunity to touch and try-on, and to talk to knowledgeable sales assistants. Creating a unique and meaningful customer experience is the crucial element to battling the brunt of online – bricks-and-mortar stores can’t compete on price, so they have to work much harder. Selfridges has been doing just that through its introduction of ambitious shopping experiences such as accessories halls and an indoor skate bowl, along with plans to launch a toy store.
“Ultimately, consumers will spend wherever they get the best combination of choice, convenience, price, and experience,” says Tyagi. “Customer experience is the focus of retailers who are thriving. Those investing in technology for consumer targeting, effective personalisation, robust operations and strong loyalty management will see more revenue and margin growth than those who ignore the consumer journey.”
Selfridges has been able to blend its online and physical presence well. While its online sales are rising, it has also adapted its physical stores. It has made significant investments in these initiatives with an eye on the future, which has impacted its net profits this year, but will likely pay a return on investment as is already reflecting in the revenue numbers, Tyagi believes.
“These examples highlight that there’s scope for retailers with a customer-centric strategy to survive and thrive, while others crumble around them,” he concludes.