Storemaggedon: 2 key lessons for Higher Education from the retail apocalypse
With coronavirus impacting retailers across the world, costing retailers billions per week of closure, the pandemic has massively accelerated the 'retail apocalypse' that started in the early noughties.
Over the past decade, retail giants have fallen foul of changing consumer behavior, failed to keep pace with digital transformation, and lost out to challenger brands that have created billionaires whilst they burned. Higher Education won't be immune to this trend!
In the UK, 25,000 job losses resulted of the collapse of two major high street retailers. The US has already witnessed the closure of giants such as Sears, Toys R Us and JCPenney, and Australia has lost global and domestic retailers such as Gap and Target.
Higher Education and retail are, of course, very different.
Fast fashion – with its low-cost, quick-consumption culture – is a polar opposite of the high-investment, long-term gain offered by universities and colleges.
However, if storemaggedon shows us anything, it is that giants do fall. So what can Higher Education learn from the collapse of the high street and shopping mall? And how might this impact marketers?
Over-reliance on physical premises
The success of online shopping shows that retail isn't dead; it has just been redesigned. In our pursuit of low cost, high convenience products, brick-and-mortar stores have proved inefficient and cumbersome.
Whilst online retailers have harnessed the potential of improved efficiencies and an international audience, high street stores have fallen behind by:
- Incurring high costs for physical real estate
- Passing this expense on to customers
- Failing to add value to physical vs online experiences
- Limiting their reach to specific geographies and local footfall
For universities, traditionally rooted in specific localities, physical buildings, and in-person experiences, this signals a number of opportunities and threats to their model. Looking at your own institution how much money goes to the building of physical projects versus the overall student experience? Do Alumni donations at your instituion focus on the physical experence? It's an interesting one to think about! The Chronical of Higher Education also raised an interesting point around the congoing cost impact of these large construction projects, buildings that were probably mostly vacant in 2020!
Coronavirus has forced many institutions to offer online learning instead of face-to-face this year, leading to the rapid acceleration of digital transformation in HE. With the genie of online and blended learning released, will this change Higher Education in the same way online shopping has transformed retail?
Online learning has a lot of benefits for both individuals and institutions, by opening up opportunities to learners who may have traditionally faced barriers to in-person learning. This is a boon for widening participation and opening up recruitment in untapped markets.
However, as student protests over tuition fees in a number of countries have proved, the online model does pose challenges in terms of pricing strategy, institutional brand, and how to position the different benefits of campus-based and online offers. Check out this really interesting article in Edsurge on the topic, titled "Colleges Should Build Online Programs, Not New Gyms and Climbing Walls", from 2019.
The risk of 'pale, stale and male' management
In the UK late last year, two bastions of the high street have announced closure. Department store Debenhams has come to the end of its near-250-year history. And Arcadia Group, the parent company for numerous high street fashion stores, is also set to fold.
Among the many reasons cited for the demise of the troubled Arcadia Group – run by controversial businessman Lord Philip Green, formerly known as 'King of the High Street' but now a byword for the corporate malfeasance – is the perception of Arcadia Group as 'pale, male and stale'.
Comparing the fate of Arcadia Group stores with challenger brand PrettyLittleThing, the BBC cited the differences in management makeup at the two retailers.
Arcadia run by someone whose heyday was several decades earlier, in a very different retail environment, versus challenger brands started and grown by digital natives, more closely matched to their target audience and with fingers on the pulse of digital marketing.
Arcadia insiders say that Sir Philip Green had 'ignored the world on online shopping' and was 'lumbered' with a large store estate that proved costly during Coronavirus.
On the flipside, retailer PrettyLittleThing is one of many online-only retailers that have harnessed the full power of digital. Using marketing technology to harness data, deploy insights, and maximize sales, they've seen their Google Shopping revenue surge by 340%.
Furthermore, the social media followings for the two retailers are hugely different. For example, Arcadia's Dorothy Perkins Instagram account has 405k followers compared to PLT's 12.8m.
Low investment in modern marketing channels has seen traditional retailers lose ground by failing to meet customers where they are or provide the content they want to consume. Is your University falling into this trap, investing more in traditional marketing and engagement playbooks, or are you truely investing in a digital first strategy with support and investment from the top?
Is there a lesson here for universities?
Certainly, many universities are seeking to diversify their senior leadership and shake off the 'stale male' stereotype we often associate with the higher echelons of academia. Something that can only benefit recruitment of the Gen Z cohort, who have proven particularly alert to diversity and equality issues.
However, it is the application of digital marketing that is most relevant here.
The use of granular-level marketing data and audience insights allows forward-looking marketers to continually optimize efforts and maximize spend; whilst the choice of appropriate digital channels and appropriate investment to create desirable content can help reach target audiences effectively and measurably.
The real threat of 'stale' management – as Arcadia Group demonstrates – is a failure to recognize and realize this potential.
As all businesses are forced to keep pace with technological change and buyer behavior, marketers need to be at the forefront of strategy and decision-making. As retail shows, agility in the marketing mix can make or break a business, from place and process to people and promotion. Whilst Higher Education isn't confronting the same seismic shifts as the high street, institutions shouldn't ignore the rumblings of digital disruption.Tagged: Online Learning, Investment, Digital Distruption, Covid19, Budget, Strategy Leave a comment