Reinventing the High Street for the Digital Era

7/31/2019 Reinventing the High Street for the Digital Era

1/61Driving growth through a new community commerce model

DRIVING GROWTH THROUGH A NEW

COMMUNITY COMMERCE MODEL

HOW CONSUMER DEMAND FOR DIGITAL INNOVATION CAN SPUR

ENTREPRENEURIALISM, COMMUNITY COHESION AND ECONOMIC GROWTH

ON UK HIGH STREETS



Digital technology and innovation is having a major impact on Britons purchasing habits and the retail, banking,

hospitality and the services sectors at large.

This paper sets out a vision for how this innovation could herald a new, as yet unexploited, era of growth for SMEs (Small

and Medium Sized Enterprises), retailers, restaurants and communities to revive our ailing town centres.

NCR is working with some of the UKs leading high street brands to transform how they interact with consumers and

attract more people into their physical locations by using the online, mobile and social channels that are now central to

our lives. NCR believes that in developing its retail growth strategy it will be vital for Government to look at how a highly

innovative Community Commerce Model could enable smaller, local businesses to harness new technologies rather

than being over-shadowed and, ultimately, wiped out by them.

UK AND THE INTERNET ECONOMY

Britain is the worlds biggest internet economy. The internet contributes to 8.3% of UK GDP in 2010, making it bigger than

the construction and education sectors, thanks largely to the popularity of e-commerce.

Online retailing was worth 68 billion in the UK in 2011 according to IMRG, a consultancy, and already accounts for

17% of all retail spending. This holds true just as much for silver surfers as it does for so-called digital natives born

before 1980 and the advent of the computing age. Online spending levels in the UK are double the average cited by the

Organisation for Economic Co-operation and Development (OECD). Boston Consulting Group (BCG) forecasts some

23% of retail spending in the UK will be online by 2016.

Mobile shopping in particular represents a massive economic opportunity for the UK, promising to deliver a 4.5bn boost

to UK GDP by 2016, and a further 13bn by 2021, according to a study by Verdict Research, commissioned by eBay

(May 2012). The smartphone is arguably the most signicant technological development in retail in generations. It brings

the ability to perform all sorts of functions on a single device - everything from locating stores and restaurants to creating

shopping lists, booking restaurant tables, in-store price comparisons, self-scanning and self-checkout, earning loyalty

points, redeeming vouchers and coupons, and sharing experiences.

DRIVING GROWTH IN LOCAL COMMUNITIES

While online retail grows exponentially, our high streets and town centres remain vital to our local communities and should

act as engines of growth for small rms and local entrepreneurs.

Recent Government measures have highlighted the huge importance of the high street to the UKs growth agenda. In

December 2011 the Department for Business Innovation and Skills published Understanding High Street Performance

to review the role of our high streets, recognising their value in promoting local (and wider) economic health and well-

being.



The new National Planning Policy Framework retained the presumption of town centres rst in land use decisions.

Major changes in the regulatory regime for town centres have been geared towards driving growth, as have initiatives

to improve the management of towns and cities through Business Improvement Districts (BIDs) and community interest

companies.

The Governments response to the Portas Review, published on 30th March 2012, contains 28 measures and signicant

funding initiatives to support innovation on our high streets to promote economic growth and job creation in local areas.

But, to date, local businesses are failing to respond to consumers desire to engage via a combination of digital and

physical channels and, as a result, many local town centres and economies have lost share of overall retail expenditure.

Globally, the UK has the fth lowest number of businesses who use the internet. NCR believes there is a direct correlation

with the loss of 15,000 stores between 2000 and 2009, and an estimated 10,000 loss of predominantly smaller,

independent high street stores since then.

New gures published by the British Retail Consortium (BRC) and Association of Town Centre Management (ATCM)

highlighted the continuing impact that the economic downturn is having. Vacancy rates for UK town centres remain high at

11% in April. Wet weather contributed to a 2% fall in footfall, while out of town shopping centres experienced an increase

in sales during this period.

With the growth of online shopping and out-of-town retail, small independent traders are missing out.

As the Prime Minister said in his foreword to the Government response to Portas Review, the challenge for high streets

is clear, Internet shopping and out-of-town shopping centres are not going to go away - they offer the convenience and

choice that customers welcome. So, for our high streets to thrive they must offer something new and different.

NCR believes that for genuine impact on competitiveness, the Governments strategy for driving local economic

growth must embrace digital innovation as an opportunity not a threat. As e-commerce and m-commerce

tighten their grip on the nations spending habits, collective and individual opportunities through community

partnerships could be developed for local SMEs, struggling retail chains, market traders and public services

to collaborate, using digital innovation to bring customers back to their high streets and drive local economic

growth.

THE COMMUNITY COMMERCE MODEL

Consumers today want to access all the things they love about the online world - including endless choice, total price

transparency and peer ratings and reviews - when they visit our high streets. The internet brings greater diversity and

efciency to their shopping, dining and banking experience.

In order for local high streets to compete with major online retailers today, and in the long-term, we need to integrate

online and mobile in physical stores. It is vitally important to enable local entrepreneurs and community groups to

connect with consumers using these digital touchpoints and deliver a better overall experience in-store. By adopting newconsumer interaction and business management tools, entrepreneurs within our communities will be able to compete on a

level playing eld against the pure-play online retailers and out-of-town shopping centres.



Blending digital discovery and sensory exploration in a new, affordable and inclusive Community Commerce Model

will deliver better service and better overall value in todays experience economy. This principle applies across all

the consumer industries represented on the high street, including shops, restaurants, pharmacies, market stalls, pop-

up shops, post ofces, banks and rail and bus transport providers. One exciting store in a street wont be enough -

businesses will need to work together to ensure the whole destination is somewhere people want to be.

All the evidence shows consumers want to use multiple channels when they shop. Over half of consumers (56%) like to

click-and-collect to avoid delivery charges according to research commissioned by NCR from Buzzback Market Research.

Encouraging people into their local stores increases the likelihood that they will buy other products on collection.

High streets need to take advantage of the fact petrol prices remain high and consumers are also time-starved to

encourage local shopping. Consumers who visit a high street with one specic task they need to carry out will take

advantage of other shopping and leisure offers once theyre there if they can be sure of getting what they need and the

experience is easy, engaging and enjoyable.

COLLABORATE TO INNNOVATE

New collaborative technology means its far easier to take a cost-effective partnership approach to innovating and offering

something new and different on our high streets.

Local Town Team stakeholders - such as town centre managers, high street landlords, councillors and community groups

- can work in partnership to introduce solutions without high up-front costs to reach and interact with consumers in new

ways that are relevant to the way they now live their lives. Advances in technology means software and supporting

infrastructure no longer needs to be owned, but can be accessed on a Pay-As-You-Go (PAYG) basis, like a utility, via a

smartphone or tablet computer.

For example, customers could download a High Street App to their mobile to help them nd a local restaurant, book their

table online, receive discounts and share experiences socially.

A Community Touchscreen could be introduced on high streets or in an anchor site, such as a newsagent or

convenience store, to automate the experience of picking up click-and-collect orders placed with online retailers.

Shoppers could be given the option to buy gifts or owers to be sent to a loved with a personalised greeting. The same

touchscreen could act as a rail and bus contactless travelcard top-up point and provide information on local community

information and services.

Local schools, churches and charities could update a digital Community Pinboard with information about fundraising

events that would normally not be publicised to such a wide audience.



A smartphone or tablet payment and customer relationship marketing app could be used to enable sole traders to

take card payments, but to also offer value-added services, such as signing up people for home deliveries or to receive

information about special offers and events. Such apps now provide real-time information on inventory, sales and

margins.

Non-sensitive sales data could be viewed on aggregate by Town Teams to get an accurate overview of consumer

behaviour on the high street. This could include insights into the days of the week and times that people are shopping and

what sort of stores they spend money in.

This would enable entrepreneurs to make informed decisions about how to attract consumers to the high street, including

whether changes are needed to opening hours or what kind of special promotions and events should be run. This sort of

data-driven approach to managing and marketing products has enabled major retailers to grow from market traders to

international conglomerates in the past. With the democratisation of technology such tools can be, and should be, used

by start-up entrepreneurs.

Community pop-up stores, owned by the Town Team, could be set up with through-the-glass digital signage, displaying

the logo and photos of the latest entrepreneur or charity to try out a new business idea or fundraising initiative. Card

payments - essential in light of the continued decline in the usage of cash in the UK by value and volume as a share of

total payments - could be taken through the mobile POS (Point-of-Sale) business analytics and marketing app.

By off-boarding 3G and 4G mobile phone signals to a Wi-Fi connection , the high street can deliver reliable, high

street online connectivity to consumers and local businesses. High streets and local businesses need enough Wi-Fiaccess points, located in the right places and set to non-competing channels to avoid signal conict to handle rising

consumer demand.

This Community Commerce Model provides an excellent opportunity for transforming community groups and local

health and public service delivery. The Government Digital Service aims for public services to be digital by default and

the new Government Digital Advisory Board wants best practice from the commercial sector to be applied to Government

services.

NCR believes that many local services could be offered within a Community Commerce Model to help drive local

regeneration and encourage people to use local businesses and services.



FOR EXAMPLE:

The Government is investing 1.34 billion in modernising the Post Ofce network to help drive efciencies, but also

to improve customer satisfaction with the many services that the Post Ofce has to offer and ensure that the branch

network is well placed to compete against alternative online services.

Making the Post Ofce a genuine front ofce for accessing government and council services will increase the

convenience for consumers. Already 25 councils are developing pilots to help address this need. Touchscreen

technologies can speed up service provision in main branch Post Ofces or Post & Go facilities to enable people to

avoid lengthy queues. Community touchscreens can provide information on local workshops or programmes, such as Sure Start, and other

childcare services.

The arrival of local NHS clinical commissioning groups that will mean communities have more autonomy to decide

which healthcare services and advice will be provided within their geographic area. Technology can serve to integrate

health and social care networks, as outlined in the recently published NHS Information Strategy. Again, this needs to

be addressed at a community level.

A Community Commerce Model touchscreen could be used in a pharmacy to give simple, clear information on

medical issues and conditions to inform consumers and encourage them to take an active role in managing their

health, complementing advice from their pharmacist.

The option to book an appointment for a u or travel jab, eyesight, hearing or dental check-up, could be given

directly at the touchscreen or via the High Street App, with full, real-time visibility into the service providersavailability and automated reminders by mobile or email to reduce the no show incidences.

We believe it is important that technology providers engage with and support key stakeholders in Government and local

communities in exploring ways to develop a new Community Commerce Model to drive growth and competitiveness

through a partnership approach.

Digital technology needs to be at the heart of our high streets to ensure they remain relevant to contemporary consumers

needs and expectations. By piloting a Community Commerce Model, which can be consistently replicated throughout

the UK, the Government will be able to help support local enterprise partnerships, entrepreneurialism, community

cohesion and economic growth.

ABOUT NCR

NCR is a global technology company. For 128 years NCR has been helping businesses and organisations to better

connect, interact and transact with consumers. NCR developed the rst cash register and commercialised the rst

bar code scanner and currently develops a combination of online, mobile and physical channels for interaction with

consumers. With 22,000 employees in more than 120 countries, NCR enables more than 250 million transactions every

single day.

Reinventing the High Street for the Digital Era

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