There’s no shortage of data predicting a retail apocalypse on the UK high street. According to a 2018 report from PWC, about 14 shops close every day on UK high streets, with a net 1,123 stores disappearing from Britain’s top 500 high streets in the first six months of that year. Meanwhile an ONS report from 2017 showed its Christmas retail figures, usually the highest, slumped to their lowest in over four years, while online sales rose 21.3 per cent.
It seems that, for online retailers at least, these are the boom times. Or are they? Although online sales are on the rise across the board, there is no evidence to suggest that those sales are being led by small players any more than they were on the high street 20 years ago. Despite appearing open to all, the ‘virtual high street’ still needs to protect diversity and choice in order to avoid the mistakes leading to declining sales for its physical equivalent.
At Shopify, we believe that by supporting growing businesses on the internet, particularly those selling direct to customers, we can avoid the increased homogenization that has blighted many of our high streets. Small retailers also need to be provided with the infrastructure to compete with online giants as without this there can never be a genuinely level playing field. For example, up-to-the-minute inventory management, secure payments, multi-channel selling, advanced check-outs and plug and play software – are all compelling examples of POS technology that can help your brand and products to shine.
Meanwhile, despite forecasts, it’s not all doom and gloom on the high street. According to the Office for National Statistics, 82% of all retail shopping in Britain is still in-store rather than online. Retail of the past was a logistics system designed around the distribution of products for the one-size-fits-all consumer. But the world has changed, and this model is no longer relevant in the current environment. The decline we have witnessed to date may in fact be the demise of that particular model of sales, rather than the death of the high street itself.
A good example of this is in the book selling market. Waterstones took a gamble on reinventing their bookstores in the mold of libraries and places that people could congregate and have an experience. That gamble paid off and Waterstones has now been in profit for the last two years. This idea has been so successful that Amazon has followed suit and is building a chain of US bookshops.
Just as traditional and newer business models are converging and learning from each other’s mistakes, the business owners of tomorrow will instinctively understand the need to blend online and bricks and mortar environments. This will result in a whole new model which allows in-person shopping to become far more immersive and experiential. In turn, consumers will be able to connect with their community in a way that hasn’t been possible before.
By democratising the experience economy in this way, it is possible that the virtual and physical high street can be revitalised. Successful retail experiences of the future will allow for the convergence of services and goods, and it is therefore likely that services-based products that extend into the physical store will be key.
Meanwhile a data-driven approach will ensure that the in-person shopping experience can be far more immersive, personal and, importantly, possible for any entrepreneur. This will allow merchants to sell in-person however they choose to do so, including festivals/markets, pop-up stores, single store and multiple store locations.
Even in the short term, there are many ways that business owners can play to their strengths and future-proof their offering too. The online and physical high streets are rapidly merging and the days of making a distinction between web sales and those made in store are numbered. Simply put, customers want both online and offline shopping. The idea that online sales compete with offline is hopelessly outdated and omnichannel delivery is increasingly expected.
Smaller, newer businesses have a natural advantage here as they’re not weighed down by legacy infrastructure or beholden to outdated business models. By putting the customer’s needs at the centre of the offering they can quickly add value where retail giants – online or offline – can’t. Not easily anyway. By understanding that there are times when customers know what they want and just want to buy it fast, yet at other times they need expert guidance and one-to-one support, fast, flexible businesses can steal a march on their larger competitors.
Shopify is working hard to nurture the short and mid-term strategies of growing businesses by ensuring they have everything they need to be the architects of the hybrid high streets of the future. Whether by popularising the omnichannel, creating enhanced Point of Sale Systems that can sell across multiple locations and channels, or developing ways for merchants to offer stand-out customer experiences through improved invoicing, appointment booking or concierge services; helping companies navigate the new landscape will position them for success in an industry that is about to be reborn.