If you follow the media it’s all doom and gloom. A.I. is going to take over the world, driverless cars will become the norm and unless you own a service business you’re doomed to a life of penury – really?
Back when computers were the next big thing, we were told (or our parents were) that we were all going to be out of a job, a computer the size of a small office could replace the whole accounts department and the entire nation would have so much more leisure time. What actually happened? In simple terms, the explosion of the personal computer that started in the 80s paved the way for us to get used to the idea of using a computer at home and at work. The Sinclair ZX80 offered modest computing power, no sound, a black and white display, and its one kilobyte of memory was just a millionth of that of a present-day iPhone, but the home computer whetted our appetite. Today most of us would be lost without our smart phone, just try taking one off a teenager for a day or two.
Fundamentally, we all still shop, whatever metric you use high street is hugely important to the UK economy. However, the way we shop may be changing – I can’t think of a single person who didn’t receive at least one parcel from Amazon this Christmas. So, what is the future for retail on the High Street?
If you walk down any West End street or visit a shopping centre you would say that retail is rosy and buoyant. Try dropping into a village in the centre of Cornwall one wet and windy February and you’ll say it’s dead. In simple terms, retail on the high street must change if it’s to survive, even the mighty JLP is facing compressed margins, but what it isn’t doing is changing its service model. It’s amazing that retail pays poorly yet expects its customer-facing team to perform like gods. We all have a story to tell about the great service we received in Waitrose or a John Lewis store, but we also have an equal number of disappointing stories about other retailers – just try visiting a retail park near closing time if you really want to experience poor service.
Retail on the High Street is, more than ever, a window into a brand. Apple is a prime example of this, they swamp their stores with young, knowledgeable staff but this is not their only channel to market. Waterstones and others have turned the book market around; you would have to be devoid of a soul not to want to buy a book from Waterstones on Piccadilly, they manage to make books desirable again, both in their original form and to be read in the digital format. MADE.com is very much an online retailer, yet it has a showroom in the centre of London to help inspire. You can order a Tesla online and have it delivered to a service centre, having viewed the models at what are termed stores/galleries. The list goes on and on – you may shop some days at your local supermarket and yet on other days you order online.
In addition to service, range and availability, one common factor is more prevalent than ever: location. Rents, business rates and service charges are high, which makes running a retail outlet more and more difficult; if you’re off the beaten track you get little or no traffic to your store. The halo effect of an anchor tenant in a shopping centre works on the high street too. It appears that the city centre is often thriving, but where retail must change is in the rural towns. Mary Portas gave it a good go but seemingly failed, yet if you look at a rural town like Wimborne in Dorset, it’s thriving with independent retailers anchored by a Waitrose. 10 miles up the road you have struggling Blandford with an M&S – what’s the difference? It’s the mix of independent and national chains combined with an energy from the local retailers to work together.
Maybe High Street retail as we know it is on the way out. Retailers need to use more than one channel to interact with their customers, which makes the rural shop even harder to sustain. The rural shop should reinvent itself, provide more than a basic overpriced offer and become part of the digital age. It’s a tough ask for the traditional model but with everything from a banana to a car available online, what’s the alternative? Meantime the brand show case will continue to be developed and create a level interest on the high street. There is hope, Google is looking to put a greater emphasis on search results for local companies and local consumers which should help the local entrepreneur, providing they are prepared to change what they provide and how they market it.
One thing is for certain, retailers who fail to respond to the challenges ahead will undoubtedly fail.