Analysis

UK High Street has “worst year since 2009”: investment in mobile now imperative

The UK high street has suffered its worst February since 2009 as headwinds from the economy and Storm Doris curbed spending, figures show – making investment in mobile ecommerce technology more imperative than ever.

Retailers saw like-for-like sales drop 2.2% on the back of an already negative base of negative 1.7% for February last year, according to the BDO High Street Sales Tracker. The figures mark the third month in a row of negative growth and the fourth consecutive February with no growth, BDO said.

Storm Doris, which caused chaos on the roads and rail networks, had hit sales on the high street, sending year-on-year fashion sales falling by 3.4%, the poorest result for the sector since September 2016 when they dipped 5.9%.

Sales of homewares also fell for the first time since June 2016, down 1.4% year-on-year, as households tightened their belts against rising prices.

Even online sales slowed, growing at just 19.9% in February.

Sophie Michael, head of retail and wholesale at BDO LLP, says the figures laid bare the intense pressure on consumers’ discretionary spending. She explains: “February saw a perfect storm, both figuratively and literally. Doris kept shoppers away from the high street, but the relatively poor growth of online sales in February shows that the economic headwinds significantly curbed spending.”

All this make the drive to ‘web enable’ the high street through investment in mobile more vital than ever. As we reported, the High Street is far from dead in shoppers’ minds, but it needs to become more smartphone-friendly and digitally enabled to meet their changing needs.

Jon Lord, Commercial Director, Criteo agrees. He says: “While the high street is clearly having a tough time, it’s far from dead. What today’s figures do highlight is the necessity for brands to master smartphone e-commerce. The figures behind this mobile economy represent a massively different trend to today’s BDO high street data.”

According to Criteo, here in the UK, about half of online purchases are completed on mobile, a year-on-year increase of 13%. Smartphones now account for almost one third of all online retail sales in the UK, showing a YoY increase of 41%. In Q4 2016, the UK leapfrogged Japan to take the top spot in mobile share of transactions.

Lord continues: “Not only are record numbers of users now transacting directly on smartphones but these users are also leveraging the smartphone to research transactions that ultimately materialise later on other devices. Marketers and brands who can correctly connect users across devices, via their own cross-device identity or the use of a third-party open-system identity graph, will boost marketing efficiency and gain valuable insights on the path-to-purchase.”

The highly competitive supermarket sector – which does still retain a reasonably healthy footfall – is already leading the way in how it embraces digital to make the experience of going to an actual store something that shoppers want to do.

As reported in Internet Retaling this week, Tesco expands its same-day click and collect service, and on Waitrose as it turns to third-parties to build its international sales. We have news of Ocado as it puts new technologies to work to hone its customer communications, and on Morrisons as it uses cross-channel strategies to serve its customers.

There are even lessons to be learned from the Pizza sector, where Domino’s is seeing rising mobile sales as its customer become ever-more digital and is investing in high street stores.

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