Why High Street retailers are falling behind in digital marketing
The British High Street holds a powerful place in our collective psyche. The current reality of retail in the mid-2020s is unrecognisable from two decades ago.
In 2024, nearly 13,500 retail establishments shut down, a 28% increase compared to the previous year, according to the Centre for Retail Research. The Office for National Statistics reports that retail has shed 360,000 jobs in a decade.
Online sales as a proportion of total retail sales has more than doubled over the past decade, from around 11-12% in 2014 to 26% today.
But the story isn’t as simple as digital players dominating at High Street retailers’ expense.
Many embraced ecommerce early on, adapting quickly to PPC. Then they failed to keep pace with what followed. By standing still they remained frozen in time while D2C disruptors raced ahead. Many of these digital-first brands, like ME+EM and Nadine Merabi, have since gone on to open their own physical stores.
The High Street didn’t lose to ecommerce. It lost to a permanent revolution in digital marketing that it stopped participating in.
The evolution that retail missed
Digital marketing hasn’t stood still. It has undergone continuous transformation:
- Pre-1990s: Retail either in-store or mail order. Traditional advertising via TV, OOH, direct mail. Low understanding of what drives purchase.
- Early 1990s: Development of in-store loyalty cards. The birth of data-driven marketing.
- Mid-1990s: Birth of ecommerce giants. Amazon, eBay, Google Search.
- Early 2000s: Broadband becomes widely available. Facebook founded.
- 2007: Rise of mobile commerce with the first iPhone.
- 2017: The term “duopoly” gains traction to highlight Facebook and Google’s control of the ad market.
- 2020: Pandemic drives surge in ecommerce and High Street closures. TikTok’s rise leads to video-first advertising.
- 2021: iOS changes make tracking harder. Advertisers see significantly higher CPA. Creative becomes the biggest lever for success.
- 2025: Meta announces Andromeda, its machine learning system for ad recommendation.
High Street retailers engaged with the early stages of this revolution. PPC was measurable, trackable, and delivered clear ROI. They built entire marketing cultures around it.
Then the revolution continued without them.
“A lot of the bigger retailers who operate across different channels were initially effective at digital. By the mid to late 2010s, at least from the outside looking in, many of them were running things quite effectively.”
Chris Howard, Nest COO
The problem is that “quite effectively” in 2015 is obsolete in 2025. The retailers who built success on PPC developed marketing cultures centred entirely around its frameworks: budget allocation, measurement systems, team structures. When the platforms evolved, these retailers didn’t evolve with them.
“Large retailers are telling us they’re falling behind. Their in-house teams haven’t kept pace over the last four or five years, and the large agencies they rely on aren’t exactly known for innovation or nimbleness.”
Will Ashton, Nest CEO
In a world of D2C speedboats, many omnichannel retailers have found themselves trapped in slow-moving tankers.
The four gaps in modern retail marketing
Legacy structures trap retailers in outdated thinking. The same systems that made them effective at PPC now prevent them from adapting to what platforms demand today.
Four specific gaps have opened between where High Street retailers are and where they need to be.
Gap 1: Measurement misalignment
Many omnichannel retailers persist in using click-based attribution models like GA4, which provide a misleading view of marketing performance.
These models dramatically undervalue upper-funnel activities and short-form video, despite video-first social platforms now being key drivers of awareness and sales. According to HubSpot, 73% of consumers prefer to watch a short-form video to learn about a product or service. These don’t typically lead to a high volume of clicks but are crucial for introducing customers to brands and building engagement.
GA4 and similar models can only track sales back to marketing channels through clicks. This limitation is compounded by rising consumer privacy measures, like Apple’s ATT framework and cookie deprecation, which further diminish the accuracy of last-click measurement.
Marketers who rely on click-based measurement are driven towards short-term, tactical advertising to keep within ROAS or CAC targets assessed on a fundamentally flawed methodology.
This leads directly to the second gap.
Gap 2: Over-indexing on lower funnel
Operating in a highly competitive retail environment with large stock volumes to move quickly often pushes omnichannel retailers towards short-term returns. Budgets skew heavily towards channels that appear to deliver immediate results, often at the expense of sustainable long-term growth.
“It’s like fishing in the same pond over and over: You go for strong, intense signals that people really want to buy. In order for brands to grow the size of that pond and to attract new customers into the fold, they need to do brand building.”
Rodrigo Aspillaga, Nest Senior Performance Director in WARC’s ‘Retail Media Radar: Ending the ROAS reliance’
This creates a lower-funnel cycle of doom. Continuous optimisation of short-term metrics leads to an ever-shrinking customer pool due to insufficient investment in long-term brand building and new customer acquisition.
Nest’s own data highlights the limitations of a lower-funnel-focused approach. Last BFCM weekend, brands leveraging full-funnel strategies scaled by 41% year-on-year whilst maintaining efficiency, as they were better positioned to capture heightened customer demand after building intent leading up to peak. In contrast, brands focused solely on bottom-of-funnel were flat year-on-year, with spend even dipping below 2023 levels at times, as they lacked the headroom to reach new audiences.
Relying too heavily on lower funnel limits growth and prevents reaching incremental customers.
Gap 3: Creative resource deficiency
The shift to short-form video presents a significant challenge for omnichannel retailers. Not only is this creative more complex to produce, but platforms now demand greater volume and diversity of creative to maximise performance across Meta, TikTok, and YouTube.
“The difficulty for many brands lies in their outdated creative production models. While many have large in-house creative teams, these operations were historically designed for traditional media like in-store assets or catalogs, not to service the needs of modern digital channels with diverse and rapidly iterated creative assets.”
Chris Howard, Nest COO
Many omnichannel retailers don’t have the right team setup to produce creative for these formats. Creative and performance functions often operate in silos with different objectives. Internal design teams struggle to develop skills fast enough to keep pace with platform evolution.
This is the gap where the closed loop matters most. Performance data needs to flow directly into creative production. The volume platforms demand exceeds what traditional creative workflows can deliver.
Gap 4: Disconnect between online marketing and in-store sales
Most omnichannel retailers fail to systematically measure the impact of digital marketing on in-store sales and customer acquisition.
This is a significant oversight given that physical stores often represent a large portion of their revenue. According to CapitalOne research, 73% of shoppers across markets purchased in-store after finding or discovering the item on social media.
While platforms like Google and Meta offer solutions for tracking offline sales back to digital media, many retailers lack the necessary data infrastructure (loyalty programs, paperless receipts) to effectively use them.
One report found that 74% of UK retailers are failing to assess the full worth of their digital marketing spend due to not accurately attributing the impact on footfall.
This leads to under-attribution of in-store sales driven by online efforts and, consequently, misallocated ad spend. Misaligned objectives between online and in-store teams compound the problem: if the online marketing team is solely focused on ecommerce sales while the in-store team aims for footfall, the business misses opportunities to direct the customer journey across all touchpoints.
Five questions C-suites should ask
If you think the pace of change has been quick so far, the next decade will move faster. Retail C-suites need to ask difficult questions about their marketing now.
1. Are our marketing objectives aligned across the team and with our overall business goals?
Misaligned objectives lead to inefficient spending and a fragmented customer experience. Having the wrong short-term tactical metrics can exacerbate the problem by leading to over-investment in bottom-of-funnel ads with limited impact on broader business KPIs.
“The entire team including finance, marketing, brand, needs to be united, singing from the same hymn sheet. They all must understand the business’s core goal, the key performance indicators, and, most importantly, who the customer is.”
Lara Gibbs, Nest Senior Performance Director
Start by developing a “North Star” metric for marketing which reflects the overarching, omnichannel goals of the business. Ensure the objectives of your whole marketing team ladder up to achieving this goal, with a clear link between the North Star and their day-to-day activities.
2. What are the signals my marketing isn’t working?
As an organisational leader, it’s vital to look beyond optimistic channel reports and grasp the true impact of marketing on your business goals. Raw platform data is merely a starting point. Genuine understanding requires deep interrogation.
It is highly risky to stick with the same strategies from years past without them being repeatedly tested and shown to still work. Look at whether you are hampered by slow decision-making (often due to wrong structures and departmental silos), and whether the allocation of your budget to different types of marketing activity reflects the outcomes you want to achieve.
3. How do we measure the incremental impact of our marketing investments?
CEOs and CFOs need to understand how marketing is truly driving additional value. In a cross-channel environment, optimising your marketing efforts requires a focus on incrementality. By quantifying the unique contribution of each channel, you can make data-driven decisions about budget allocation. Without this, marketing spend is a leap of faith rather than a strategic investment.
The development of a comprehensive testing framework conducted by trained experts is essential. Advanced measurement techniques, such as marketing mix modelling, multi-cell and lift tests, can help uncover incremental gains. Geo-lift tests can isolate the incremental impact of digital marketing on both online and offline sales.
4. Do we have the right people, data, and tech setups to adapt?
The digital landscape is in a state of permanent revolution with tech platforms innovating at pace and scale. Ignoring these shifts leads to outdated strategies, missed opportunities, and loss of competitive advantage.
Ensure you’re fully up to speed on the latest releases from major ad platforms, that you have trusted partners providing an external lens on the platforms’ future direction, and that you have the skills and capabilities in your organisation to thrive in the landscape they’re creating.
5. What barriers prevent your marketing team from achieving its full potential?
Marketing teams often face internal or external obstacles that hinder their effectiveness. The complexity of omnichannel retailers means more touchpoints, and in most cases, more potential barriers to driving change.
It is vital the C-suite have a strong understanding of what’s required to achieve success in today’s digital marketing landscape so they can ask the right questions and help remove the inevitable barriers to progress. Ensure you have an open dialogue between teams. This allows the marketing team to articulate challenges such as insufficient resources, technological limitations, or internal silos, and break down barriers.
The retailers who are winning
High Street brands can win with a new approach to omnichannel marketing. Once they confront these difficult strategic questions, they’ll be in a prime position to transform their digital efforts, effectively generate awareness, and acquire new customers.
Brands that excel in this area successfully leverage their existing assets: strong brand recognition, physical infrastructure, and diverse customer touchpoints.
Crew Clothing: full-funnel driving record growth
Crew Clothing is on a huge growth trajectory. Total Christmas sales soared by 45% in 2024, supported by a stunning 70% rise in online revenue, including a record-breaking Black Friday period.
The results came from a full-funnel paid social strategy built over three years. In the run up to Peak, the brand built awareness and consideration on digital channels, before pushing sales-driven messaging to capitalise on shopper interest across Meta and TikTok. This drove unprecedented incremental demand throughout the period.
And for this omnichannel retailer it is not all about ecommerce. Nest deployed sophisticated test-and-learn model to measure how online signals drive both online and offline sales. Crucial in a year when the business is opening 20 new stores across the country.
“After three successful years focused on paid social, we are incredibly excited to be expanding our partnership with Nest. Their creativity, passion, and vision align perfectly with our own.”
Raine Peake, Group Digital Director – Crew Clothing, Ben Sherman, Saltrock and Pringle
Mint Velvet: global growth through integrated channels
Female-founded Mint Velvet is famous for its “relaxed glamour”, catering to women seeking luxurious, effortless pieces, with 23 stores across the country.
It was already a high-performing omnichannel fashion brand when it recognised the need for specialised expertise to evolve its approach, unlock further growth, and optimise performance.
The partnership has since evolved significantly, expanding from paid social to integrated search and social campaigns globally. Brand awareness and sales are delivered through a sophisticated full-funnel approach. The results: 3.7x US sales increase year-on-year, and a 24% increase in new customers via Search year-on-year.
Objectives are set jointly, creating a strong sense of shared ownership and achievement. This collaborative spirit is realised through a “triangulated relationship” involving experts from Meta, fashion-specific performance specialists, and Mint Velvet’s in-house brand and technical teams.
“From senior leadership to the team on the ground, Nest’s people are truly exceptional. We value a collaborative and communicative culture, which fits perfectly with our own ways of working. And the deep retail fashion expertise provides the vital thought leadership we need from an agency.”
Maddy Turley, Growth Director, Mint Velvet
The principles of a long-term partnership are the best ballast against uncertainty: collaboration, specialised expertise, and a shared commitment to growth.
The D2C brands that raced ahead didn’t have the advantages High Street retailers possess: brand recognition, physical presence, existing customer relationships. What they had was marketing infrastructure built for the current era, not the previous one.
High Street retailers can build that infrastructure too. The ones who do will take the next decade.
FAQs
Why are high street retailers struggling with digital marketing?
High street retailers built their marketing capabilities around PPC in the early 2010s, then failed to evolve as platforms changed. Four specific gaps have emerged: measurement systems still rely on click-based attribution that undervalues video and upper-funnel activity; budgets over-index on lower-funnel tactics at the expense of brand building; creative production models weren’t designed for the volume short-form video demands; and most retailers don’t measure how digital marketing drives in-store sales.
Why does click-based attribution hurt retail marketing performance?
Click-based attribution models like GA4 dramatically undervalue upper-funnel activities and short-form video content. While 73% of consumers prefer watching short-form video to learn about products, these formats don’t generate high click volumes – yet they’re crucial for awareness and engagement. Rising privacy measures like Apple’s ATT framework further diminish click-tracking accuracy, making last-click attribution increasingly misleading for budget allocation decisions.
How should retailers measure the impact of digital marketing on in-store sales?
Most omnichannel retailers fail to connect digital marketing to physical store performance, despite research showing 73% of shoppers purchase in-store after discovering items on social media. Effective measurement requires: implementing loyalty programmes or paperless receipts to capture customer data; using platform solutions from Google and Meta for offline conversion tracking; running geo-lift tests to isolate digital marketing’s incremental impact on both online and offline sales; and aligning objectives between online marketing and in-store teams.
Why are D2C brands outperforming traditional retailers in digital marketing?
D2C brands built their marketing infrastructure for the current era rather than adapting legacy systems. They measure beyond last-click attribution, invest across the full funnel, produce creative at the volume and velocity modern platforms demand, and treat the customer journey as unified rather than siloed by channel. Many successful D2C brands like ME+EM and Nadine Merabi have since opened physical stores – demonstrating that digital-first capabilities translate to omnichannel success.
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