Gloomy Future for the High Street?
Looking back, 2011 will not be remembered with any fondness by the High Street. Thorntons, Carpetright and Comet were three retailers in very different markets but all affected by the High Street sales slump.
The gloom on the High Street was confirmed by British Retail Consortium Director General, Stephen Robertson, who referred to 2011 as “…a tough year with virtually no real term growth for retailers”. He’s not holding his breath for 2012 either by adding, “We’re not witnessing any fundamental change in customers’ circumstances.”
Contrast this with the latest online sales figures which show the continued rise of online sales (up 20% in November 2011 vs the previous month and up 11% compared to the same month in 2010 according to the IMRG Capgemini e-Retail Sales Index). Britons spent an estimated £7.1bn shopping online in November 2011 – once again outperforming the High Street in terms of growth.
Looking ahead, one study by Jones Lang LaSalle forecasts that more than 50% of all non-food transactions will be influenced by the web within 10 years whilst a third of retail space will be obsolete.
The report, Retail 2020, says there is no bigger disruptive force than the internet in high street retail today. Store vacancy rates have increased to 14.5% (at August 2011) up from 5% at the end of 2008.
So with the growth of online shopping inevitable what does the future hold for the High Street? A long slow death at the hands of the internet? Or can it fight back?
There’s no denying that shopping online has many advantages which amongst other things can be price, choice, convenience and the ability to read reviews from fellow consumers. There is also no denying that the shopping experience in an average UK city can sometines be frustrating to say the least with consumers having to battle against such things as parking charges, overcrowding, lack of knowledge or help from sales assistants and long queues at the till to name but a few.
So if it is to survive and prosper what should the High Street do? Well, perhaps it should do what any business would when faced with a threat – re-examine it’s own offering and embrace change, play to its own strengths and exploit the areas that the competition is weaker in.
By doing this the High Street has a chance to complement online shopping whilst offering a diferentiated but nonetheless enjoyable consumer experience.
By concentrating on the things it does and could do well at such as; immediate gratification (you can take your goods with you there and then rather than waiting for them to be delivered), sensory experience (touch, taste and smell are senses that cannot be delivered through a monitor), expert advice, acknowledging and catering for the social aspect of shopping and lastly allowing consumers hands-on experience of, and interaction with, the product then the High Street can offer a different experience to shopping online.
There are some examples of where the High Street has embraced change, for example the growth of Click & Collect services where the High Street has become an integral part of the online shopping process, Pop Up shops where the consumer can touch and experience products before buying them online and there are also examples of the High Street playing to its traditional strengths of good old fashioned service and expert advice as demonstrated by the strong performance of John Lewis over the recent Christmas period.
And with new technological innovations to come such as Near Field Communication which will allow consumers to make purchases and get more information instore on their mobile devices and PayPal’s Real Window Shopping innovation which turns the windows of shops that are closed for the night into live shopping areas the High Street should have plenty of opportunities to not only complement online shopping but also to assert itself as a thriving alternative.