The strange paradox of Britain’s High street crisis is that we are lamenting the loss of much-loved stores while using them less. Take Mothercare’s recent collapse. When the firm announced it was closing its UK outlets, customers rushed to share fond memories and mourn a retail ‘legend’. It was an impressive display of brand loyalty, but in truth, too many of those customers were buying elsewhere – especially online.

It is, of course, a familiar tale. Consumers currently spend one pound in five online, and Mothercare joins a list of illustrious High street casualties, including Karen Millen, Maplin, and Toys R Us. While Black Friday 2019 dawned amid reports from the British Retail Consortium that year-on-year sector employment had fallen for 15 consecutive quarters, you can bet there was no such gloom at Amazon HQ, as executives prepared for another bumper Cyber Monday.

So, is the death of the High street inevitable? It’s certainly almost impossible to rival Amazon’s ability to get anything to your door within 24 hours; nor can ethical UK firms maximise post-tax profits through offshoring (as Amazon notoriously does), which suggests the odds are stacked against them. But customers are unlikely to share the sentimental attachment they displayed towards Mothercare for Jeff Bezos’ 100 billion-dollar empire. That should be a clue that High street brands can still compete: just not on next-day delivery.

The problem is that many retailers don’t know enough about why their customers value them. Most investigate this through traditional market research methods, like focus groups. But there is often a gulf between what customers will claim drives their purchasing decisions and how they actually operate. To understand the emotional bonds that will draw shoppers to the High Street, retailers should not simply ask customers what they think: they should watch what they do.

High street brands can still compete: just not on next-day delivery.

Tales from tourism

This is a lesson that other sectors, like tourism, have absorbed. At Modern Human, we recently undertook ethnographic research for VisitScotland, to understand how people really plan holidays. Ask most holidaymakers and they will describe a rational process: choosing a place to visit, finding somewhere to stay, picking a well-priced hotel. We used remote shadowing to take VisitScotland on a more in-depth journey into people’s holiday-planning, amassing 1.5 million data points and creating a map of 132 distinct actions that go into planning the perfect holiday.

This revealed that holidaymakers are less rational than they claim. In practice, their ideas for holidays simmer away – sometimes for years – as an unstructured mixture of partially-defined elements: a sort of ‘ideas soup’. Some are very specific (e.g.: playing golf at St Andrews); others are broad and vague (e.g.: a wilderness adventure). From time to time, an external factor – like finding a cheap deal or direct flight – pushes one of these ideas to the surface, and the customer will act. So the challenge for a visitor information organisation like VisitScotland is not simply to help customers book a holiday in Scotland but to get them to commit to one, by articulating what it will look and feel like.

In another project, for Tesco Bank, we explored how customers choose financial products. Again, customers claim that they will rationally survey the market, select a product and find the cheapest price. When they choose a product that is not the cheapest available, they will cite other factors like better customer service – usually without supporting evidence. What they really mean is brand recognition: they have an inbuilt cognitive bias towards brands that they recognise, and associate this with better service.

The changing value chain

The lesson for High street brands is that the internet is still transforming value chains, and in turn, customer needs and expectations. Twenty years ago, when visiting a foreign country, you might have needed help booking a hotel. Now you can do that yourself, so tourist information services offer something different. Similarly, Mothercare’s customers moved on from depending on their stores for low-cost baby clothes and products.

Yet clearly they still treasured the brand, and one has to wonder whether Mothercare understood why? In its final days, some customers told reporters the firm had lost its ‘personal touch’, degraded the shopping experience, shut down changing areas, and lacked play areas for children. Surely this is exactly what its target market, inexperienced parents and young families, wanted? There are so many ways Mothercare could have created a unique, digitally-integrated experience that would have made their stores an asset.

High street brands must understand where they are uniquely placed to serve customers if they want to create a distinctive experience for them.

High street brands must understand where they are uniquely placed to serve customers if they want to create a distinctive experience for them. Digital can be woven into this, and a relationship between the online and instore experiences developed. But retailers must grasp where their strengths lie against online behemoths like Amazon first.

That requires a much deeper, nuanced understanding of what makes customers tick. Some brands already recognise this. Ikea, for example, visit customers’ homes to see how they live and utilise space before designing their products.

Such ethnographic research may sound intensive, but technology makes it increasingly viable. With their agreement, we can go ‘undercover’ in people’s pockets, witness their behaviour in private, and gather real-time data about their decision-making.

That knowledge could help more High street brands play to their strengths. They may not have Amazon’s vast warehouses and bargain prices, but they can offer something it cannot: integrated online and in-store experiences that drive customer loyalty. Service with a human touch can elevate shopping above simple questions of pricing and delivery. But High street stores will fail if they continue to assume their place in the value chain is simply selling customers what they need. To do so is to play Amazon at their own game – a game that only Amazon can win.