Online retail continues to transform consumer shopping habits, and, as a consequence, profoundly impacts traditional brick-and-mortar retailers.  Arcadia Group has pointed to this trend for their recent woes seeing their earnings plunge from £215m to £30m in the last five years and like-for-like sales fall 9% last year.  Retail Week journalist, Matthew Chapman, tapped DynamicAction co-founder and chief scientist, Michael Ross, for his insight as Topshop has invested and turned its focus on their digital platforms. 

Key excerpts:

"“A lot of retailers drive the digital channel and move consumers who were happily shopping in stores to buy online, which makes the business less money overall,” he says. “Typically, the online channel has a higher cost to service when you take into account picking, packing, dispatch and returns. If all you do is move the consumers from stores to online that is not good for you.”

Another key to success for Topshop in today’s omnichannel world is a keen understanding of the customer through data, according to Ross.

“Your starting point has to be understanding who is making you money and how they are making you money,” says Ross.

Once that is known, Ross believes customers can be nudged towards behaviour that will make them more profitable for Topshop. That might be driving loyal in-store shoppers to make incremental purchases online or targeting promotions at customers who have browsed the website but never bought anything.

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