Back to insights

Another One Bites The Dust: BHS

After a seemingly slow and painful death, UK retailer BHS finally admitted defeat last week and announced that the company would go into administration. The announcement comes after a flurry of financial hardship and is arguably the biggest hit to the great British high street since the sinking of Woolworths back in 2008. Here at Reckless, we can’t help but think that things could have turned out very differently for the retailer if only they had chosen to invest in digital.

Since the 1970’s, British Home Stores has been an iconic feature on the British high street. Positioned as a quintessentially affordable retailer, BHS provided shoppers with accessible, affordable solutions.

For those who have been following the BHS nightmare, the administration announcement didn’t exactly come as a surprise. Plagued by a £571m pension deficit and a rumoured creditor bill standing at a mere £1.3bn; marketing would appear to be the least of the businesses worries. But that right there is the issue. The company’s blatant ignorance to even consider the opportunities of marketing has, in my view, been a significant contributing factor to the downfall of the business.

According to Nielsen figures, the company has been slashing marketing budgets for the last few years. 2015 saw BHS spend a sorry £4.5m (excluding online) on marketing activities; down 49% when compared to 2014. When you compare this figure to the high street elite that is John Lewis, who spent a whopping £25.3m in 2015, maybe the relationship between digital marketing and business success becomes more apparent.

Advancements in tech mean that the opportunity to get closer to customers when they are in store has never been more available. Over recent years, competitors such as Debenhams and John Lewis have invested heavily in technology to enhance their multichannel proposition. From VR to flawless execution of the click and collect process; the opportunity to embrace digital in retail is endless.

Online, customers no longer have to search for what they want (well, technically they do) but the results appear in seconds. When was the last time you actually clicked through the online aisles of eBay? I am guessing never. Why? Because you just type what you want into the search.

In store, the instant availability of goods can seem hard to achieve. Customers have to walk around the store to find what they are looking for. The instore experience of BHS, was at best, poor. It has been a good few years since I visited the retailer, but I doubt much has changed since my visit back in the 90’s! And this is all down to the lack of value put on marketing as a whole to change the perception of the business.

Digital Innovation

iBeacons allow you to send push notifications to individuals within a set geo fence. Apple have integrated iBeacon technology into 254 of its retail stores. The service works with an app, which is available for download and detects users when they enter the store. For example, if you are standing next to the latest iPhone display, the app may ask you if you would like an upgrade because you don’t have the latest model and it noticed you kept going back to the display.

For BHS, this technology could allow the retailer to upsell their products. For example, if they notice an individual has lingered around the ‘Evening Dress’ section, this might infer that this person is looking for an outfit for a special occasion. With this data, they could push the customer a message informing them of the location of accessories which would complement their outfit for example.

Virtual reality has also made it onto the rails of many mainstream retailers. In 2014 Topshop recorded its fall runway show and made the experience available in store for the three days following the live event. The result? Several hundred people visited the store and experienced the show on-demand in the days following.

I am unsure if BHS fashion hits the dizzy heights of the runway, however, this doesn’t mean they don’t have content for VR. I am in no doubt that a ‘behind the scenes’ showreel of brand ambassador, Holly Willoughby and her latest collection would have attracted some much needed in-store attention.

The Customer is King

Today the customer is king and digital has played a crucial role in assisting with this power shift. E-Commerce has changed why, how and when consumers shop, not only online, but also in the real world. The digital world has shaped consumers expectations of the real world.

To attract the savvy shopper of today, retailers have to offer a differentiated value proposition. Whether it be different fashion, different price or a different in-store experience; those who innovate prosper. Unfortunately, British Home Stores failed to offer anything different.

It is clear that investment in any form of marketing has simply not been a priority of BHS and as a result they have paid the ultimate price. Sadly, there are still many traditional retailers out there who are ignorant to the ever changing face of retail, both on and off line.

The opportunity for retailers to embrace digital has never been greater and Reckless for one are excited to work with a range of retailers and e-commerce businesses to push the boundaries of digital. If you would like to join the digital revolution of retail then why not get in touch to see how we can work together.