The permanent revolution:
Why High Street retailers are falling behind in digital marketing
Contents
Executive summary: Why the UK High Street is behind on marketing
The marketing evolution that retail missed
The four biggest gaps in modern retail marketing
The coming creative tsunami
The questions CEOs and CFOs need to ask about their marketing
Case studies: Crew Clothing and Mint Velvet
Why the UK High Street is behind on marketing
“ We shed crocodile tears over our High Streets then click online and finish them off”
The British High Street holds a powerful - almost romanticised - place in our collective psyche. However, the current reality of retail in the mid-2020s is unrecognisable from only two decades ago. Ecommerce has not just grown, but has fundamentally reshaped the market.
Barbara Ellen
The Guardian 2023
In 2024, nearly 13,500 retail establishments shut down, representing a 28% increase compared to the previous year, as reported by the Centre for Retail Research. Meanwhile, the Office for National Statistics (ONS) further highlights the retreat of physical retail with new figures showing that retail has shed 360,000 jobs in a decade.
According to the ONS, 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.
However, the story isn’t as simple as digital players dominating at High Street retailers’ expense. Many embraced ecommerce early on, adapting quickly to PPC, but have failed to then keep pace with ‘the permanent revolution’ that has followed as digital marketing has become more sophisticated. By standing still they have remained frozen in time while a host of D2C disruptors have raced ahead. Indeed, many of these digital-first brands, like ME+EM and Nadine Merabi, have then gone on to open their own physical stores.
Yet High Street retailers can win with a new approach to omnichannel marketing
This report examines the digital evolution of marketing, highlighting the challenges faced by High Street retailers. It will trace how they initially engaged with this online revolution but ultimately struggled to keep pace.
It will consider the reasons including organisational structures, measurement misalignment focusing on lower-funnel activities, and creative resource deficiencies, which lead to a disconnect between online marketing and in-store sales.
We will then look ahead to the future, what is in store for digital marketing, as the tech platforms’ thirst for creative volume becomes almost unquenchable.
We’ll share the questions C-suites should be asking to start their own marketing revolution – from overcoming organisational barriers, keeping pace with the creative demands of the platforms, to measuring incrementality, reducing reliance on lowerfunnel advertising, and asking the tough questions about their own knowledge.
Finally, we will look at the success stories of those High Street brands who have embraced modern digital marketing and are winning online and in-store.
If you think the pace of change has been quick so far, just wait till you see what’s coming.
Why
The marketing evolution that retail missed
Pre-1990s:
Retail either instore or mail order, traditional advertising via TV, OOH, direct mail, low understanding of what is driving purchase.
Mid-1990s: Birth of ecommerce giants, Jeff Bezos founds Amazon, eBay launches auction based commerce, Google launches Search.
Early 2000s: Broadband internet becomes widely available, facilitating faster and smoother online shopping experiences, Facebook founded.
2017:
Term ‘duopoly’ gains traction to highlight increasing control Facebook and Google now have of ad market.
2021: Changes to iOS make tracking far harder, advertisers see significantly higher CPA, creative becomes the biggest lever for success.
Early 1990s: Development of in-store loyalty cards, birth of data-driven marketing.
Late 1990s: Dot-com boom and bust leads to closure of many early ecommerce pioneers.
2007: Rise of mobile commerce, launch of the first iPhone.
2020: Pandemic sees surge in ecommerce and leads to a host of High Street closures, TikTok’s rise leads to ‘video-first’ ecommerce.
2025: Meta announces launch of Andromeda, its proprietary machine learning system design for retrieval in ad recommendation.
The permanent revolution
“Data is the new oil”
So said mathematician and entrepreneur Clive Humby to describe the application of applied science and technology in marketing and customer data. Humby launched Tesco Clubcard 30 years ago, which signalled the start of data driven marketing in retail.
Retail marketing had relied on traditional methods largely unchanged for decades. Mass media like TV and print ads reigned for reaching consumers, and retail sales were overwhelmingly in physical shops (essentially 100% offline in this period). The era of the talented, instinct-based “Mad Men” marketers was succinctly captured by US retail magnate John Wanamaker’s complaint:
“Half my
advertising spending is wasted.
I just don’t know which half.”
The dawn of ecommerce
While loyalty cards were the spark for a new revolution in data-driven marketing, the advent of ecommerce was the explosion. The late 1990s and 2000s brought the dot-com boom.
Google, a major player in this new digital landscape, completely reshaped traditional marketing. In pioneering PPC advertising, Google enabled businesses to capture demand directly from consumers actively demonstrating purchase intent. This marked the dawn of the performance marketing era.
This new channel offered a significant advantage: a favourable price point compared to other online and offline media. Crucially, its highly measurable and easily trackable conversions transformed how retailers understood and responded to consumer demand.
But it would be overly simplistic to say High Street retailers struggled from the outset. Chris Howard, Nest COO, has worked in ecommerce since its early days, including in leadership roles at eBay, The Very Group and Play.com.
“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
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Legacy structures trap retailers in BOF thinking
These retailers, having built their success on PPC, developed a marketing culture - from budget allocation to measurement systemsthat was entirely centred around its limited frameworks.
Consequently, a significant number of them still cling to bottom-of-the-funnel (BOF) strategies, primarily Paid Search. This narrow, outdated approach is no longer effective for navigating modern customer journeys.
Today’s journeys unfold across diverse channels, like TikTok, YouTube and Instagram, each with unique requirements. It’s crucial to tailor advertising to the specific environment, both in terms of content served and the consumer’s stage in the journey.
The legacy structures within large retailers inherently make it difficult for them to adapt quickly. Their systems, built around individual channels, are ill-suited for the agile approach required to respond to changing consumer behaviors.
In a world of DTC speedboats, many omnichannel retailers have found themselves trapped in slow moving tankers.
Fundamentally, digital marketing isn’t just about keeping up; it’s a permanent revolution.
“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.”
The four biggest gaps in modern retail marketing
1) Measurement misalignment
Many omnichannel retailers persist in using click-based attribution models like Google Analytics, now 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 ways of introducing customers to brands and building engagement.
But GA4 and similar models can only track sales back to marketing channels through clicks. This limitation is further compounded by rising consumer privacy measures, such as Apple’s ATT framework and cookie depreciation, which further diminish the accuracy of last-click measurement.
Consequently, 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 challenge.
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 a focus on short-term returns. Therefore, budgets are heavily skewed towards channels that appear to deliver immediate results, often at the expense of sustainable long-term growth.
This creates a ‘lower-funnel cycle of doom,’ where the continuous optimisation of short-term metrics leads to an evershrinking 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 were able to scale by 41% YoY whilst maintaining efficiency, as they were better positioned to scale and capture the heightened customer demand after building intent leading up to peak.
In contrast, brands focused solely on BOF were flat YoY over the weekend, with spend even dipping below 2023 levels at times, as they lacked the headroom to reach new audiences. In other words, relying too heavily on BOF limited growth and prevented reaching incremental customers.
Winning retailers are adopting a full-funnel strategy, with an appropriate mix of channels and balance between brand-building and driving short-term performance goals. Patience is needed but it is the only way to break out of the ‘cycle of doom, and win new customers.
Over-reliance on Click-Based Attribution
“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.” Focus on Short-Term
quote from Rod in ‘Retail Media Radar: Ending the ROAS reliance’, WARC
Rodrigo Aspillaga Nest Senior Performance Director Follow Rod on LinkedIn
Struggling for Long-Term Growth
The Lower-funnel cycle of doom
3) Creative resource deficiency
A shift to short-form video presents a significant challenge for omnichannel retailers, with the dramatically increased demand for creative content. Not only is this creative more complex to produce, but there is also a requirement for greater volume and diversity of creative to maximise performance across Meta, TikTok and YouTube.
Meanwhile, many omnichannel retailers don’t have the right team setup to produce creative for these formats, with creative and performance functions often operating in silos with different objectives, and with internal design teams often struggling to develop their skills to keep pace with the platforms’ evolution.
“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
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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, such as loyalty programs or paperless receipts, to effectively utilise them.
This lack of comprehensive, unified data prevents retailers from accurately assessing the full ROAS of their digital campaigns. This leads to potential under-attribution of in-store sales driven by online efforts and consequently, misallocated ad spend.
Indeed, one report found that three quarters (74%) of UK retailers are failing to assess the full worth of their digital marketing spend due to them not accurately attributing the impact on footfall.
The coming creative tsunami
Many omnichannel retailers are already operating with strategies 6-7 years out of date, yet the pace of technological change is now accelerating exponentially.
As futurist Ray Kurzweil predicted, the 21st century could see 20,000 years of progress in just 100 years. This rapid advancement impacts ecommerce as much as any other sector, particularly with tech platforms’ insatiable demand for creative variety and deep personalisation, requiring ever-faster results.
Take Meta’s new ad retrieval system, Andromeda, for instance. It represents a significant leap in how to maximise performance on the platform, taking advantage of the advancements in chip technology and machine learning to predict and serve the optimal ad for each user in real time with zero latency. This innovation is part of a broader push by major tech platforms towards hyper-personalisation, aiming to deliver unique ad experiences to individuals.
Consequently, in the vast majority of cases, the sheer volume, quality, and diversity of content currently produced by brands simply isn’t sufficient for today’s demands, let alone tomorrow’s.
Businesses must be able to strategise, produce and deploy a vast amount of creative to satisfy the hungry demands of the algorithms.
The future isn’t 50 ads. The future is 500.
“The platforms are aiming to serve personalised ads, requiring a higher volume, quality, and diversity of creative content, which many retailers are not adequately prepared for. Creative is also the biggest lever for performance optimisation, making this preparedness essential.”
Will Ashton Nest CEO Follow Will on LinkedIn
“The winners in modern advertising aren’t the ones with the biggest ideas. They’re the ones with 50 ideas, 500 variants and a rotating experiment-led production line. Creative made to be tested, content made to be noticed with systems built to adapt in real time. The game is no longer about making ads. It’s about feeding the algorithm.”
Luke Jonas Nest CGO
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What questions should CEOs and CFOs ask about their marketing?
1. Are our marketing objectives aligned across the team and with our overall business goals?
Why it matters:
Misaligned objectives can lead to inefficient spending and a fragmented customer experience. 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. Also, having the wrong short-term tactical metrics can exacerbate the problem by leading to over-investment in BOF ads with a more limited impact on in-store KPIs.
Response:
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-today activities.
“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
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2. What are the signals my marketing isn’t working?
Why it matters:
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.
Response:
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 in both the short-term and long-term?
And how do we know these outcomes wouldn’t have happened anyway without our marketing spend?
Why it matters:
This probes the fundamental return on investment of marketing. 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.
Response:
The development of a comprehensive testing framework conducted by trained experts. Advanced measurement techniques, such as marketing mix modeling, multi-cell and lift tests, can help uncover these incremental gains. For example, 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 to the evolving needs of digital marketing platforms?
Why it matters:
The digital landscape is in a state of permanent revolution with the tech platforms innovating at pace and scale. Ignoring these shifts can lead to outdated strategies, missed opportunities, and a loss of competitive advantage.
Response:
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 are the biggest barriers preventing your marketing team from achieving its full potential?
Why it matters:
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.
Response:
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.
You must also ensure you have an open dialogue between teams. This will allow the marketing team to articulate challenges such as insufficient resources, technological limitations, or internal silos, and break down barriers.
The High Street Brands with the formula for success
Once High Street brands confront the difficult strategic questions surrounding their marketing, 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. There are a few standout examples that provide a clear blueprint for others to follow.
For Crew Clothing, the only way is up
Crew Clothing is on a huge growth tip.
Total Christmas sales soared by 45% in 2024, supported by a stunning 70% rise in online revenue, including a record-breaking Black Friday period. And the ambition is to go even further.
Nest has been a partner in the business’s bold expansion for the past three years, driving new ecommerce customers through a full-funnel paid social strategy.
The fruits of this long standing partnership were truly realised in a stellar performance in 2024. In the run up to Peak, Nest 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, as Crew sailed past its competitors. And this is only the beginning. Raine Peake has recently joined Crew
as Group Digital Director with a mission to further accelerate growth across the business.
To support Crew’s ambitious plans, Nest has now been appointed in an expanded brief to support search, social and creative across all Crew brands, including Ben Sherman, Pringle, Saltrock. And for this omnichannel retailer it is of course not all about ecommerce. Nest’s experts will be deploying a sophisticated test and learn model to understand how online signals can drive both online and offline sales. Crucial in a year when this ambitious business is opening 20 new stores across the country.
For Crew Clothing, the only way is up.
Total Christmas sales up 45%
Online revenue up 70%
“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 Performance Director Crew Clothing
How Mint Velvet made global growth look effortless
Female-founded Mint Velvet is famous for its ‘relaxed glamour’, catering for women seeking luxurious, effortless pieces, with 23 stores across the country.
It was an already high-performing omnichannel fashion brand when it initially partnered with Nest to scale paid social activity in the UK.
The brand recognised the need for specialised expertise to evolve its approach, unlock further growth, and optimise performance.
The partnership has since evolved significantly as Nest has taken on the search activity, including Google and Bing.
The scope has also broadened geographically, with Nest now managing integrated search and social campaigns globally for Mint Velvet, building brand awareness and delivering sales through a sophisticated full-funnel approach.
Objectives are set jointly, creating a strong sense of shared ownership and achievement. This collaborative spirit is further realised by a “triangulated relationship” involving experts from Meta, Nest’s fashion-specific performance specialists, and Mint Velvet’s in-house brand and technical teams.
As their partnership with Nest has grown, Mint Velvet has reaped the rewards of deeper expertise and shared insights, particularly from the Nest portfolio of 40+ ecommerce brands.
Looking ahead, Mint Velvet’s challenges include driving incremental growth in a mature UK market to navigating the unpredictable landscape of the US.
The principles of a long term partnership are the best ballast against uncertainty: Collaboration, specialised expertise, and a shared commitment to growth.
X3.7 US sales increase year-on-year
+24% increase in new customers via Search year-on-year
“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 at Mint Velvet
Our omnichannel clients
Nest Commerce is a full-funnel marketing agency focused on driving global scale for retailers like Reiss, Urban Outfitters, Trinny London, Mint Velvet, Crew Clothing Company and TFG Brands.