The end of the high street, or the evolution of the high street?
Jun 21 - 2018
Over recent months, not a day goes by without a well-known high street name collapsing or issuing ‘another’ profit warning. As retailers battle the high costs of prime retail property (and the rates, staff and bills which goes with it), the rise of online retail appears to be the biggest thorn in their side.
With eCommerce growing by some 15% year-on-year and physical stores staying flat at just 1% growth, futurists have reported recently that by 2025 75% of all commerce will still occur in a physical shop. So why are the big names in traditional retail suffering?
Changing with the digital world
Whilst it is true that many still want to visit a physical shop to buy their groceries, it is fair to say that people (including myself) opt to buy regular branded items online, delivered quickly and efficiently to your door. Whilst I would always opt for a trip to the shops to buy meat or fresh vegetables, I personally do less than half of my regular shopping whilst in a physical store.
Those retailers who have failed to keep up with the evolution of digital have most certainly suffered, but those who embrace it and use it to make the physical shopping experience better, have grown both online and in-store.
Rarely do industries see the same product originating from such wide-ranging sources? From physical shopping in local stores to supermarket chains – all competing in a world where some of the biggest retailers use lorries and vans as their shops. The likes of Ocado are storming the market, with not even a single shop to their name. Those with real estate almost certainly carry higher costs, both for property, people and the way they manage stock. Those who are online-only need only worry about the cost of technology, logistics and fuel.
Where is the high street going?
There can be no doubt that the high street is undergoing a period of restructuring and adaptation and whilst some who refuse to change may fall away, they inevitably provide space for the more ambitious and focused brands to fill the gaps.
Almost certainly, there has to be a future for both online and physical retail, but those who will do the best – I predict – will be those who combine the best of both worlds, by creating an efficient physical experience, but embracing technology to give customers what they want when they want to order online.