EDITOR'S COMMENT How the high street is changing in the light of online shopping
Just how the British high street is changing under the influence of online shopping came into sharper focus this week.
It's become something of an urban myth that the growth of ecommerce will lead to the death of the high street. At InternetRetailing we see instead a balance between digital and the store – one that is currently tilted in favour of shops, whether they are on the high street, in retail parks or shopping centres. But data released this week suggests that balance is shifting.
Figures put together for PwC
by the Local Data Company
for PwC showed store openings at their lowest level for seven years. An average of 11 stores opened on the British high street every day during 2017, the study suggests, while an average of 16 stores closed - with a net loss of 1,772 over the year. There are more beauty product stores, speciality coffee shops and booksellers, but fewer banks, estate agents and travel agents as, suggested LDC, their customers moved towards digital alternatives.
Lisa Hooker, consumer markets leader at PwC, said the year had been a hard one both for retailers and consumers, as less confident shoppers spent cautiously.
“On top of this," she said, "many retailers are increasingly feeling the impact of the acceleration of online shopping as consumers begin to feel more comfortable with the price transparency and reliability of delivery options offered by online players. Digital offerings are increasingly becoming make or break in areas like fashion, but also for banks, travel agents and estate agents – all of which closed a significant number of high street outlets last year. For these sectors, store closures are less driven by the market environment and more by bigger structural changes, as customers increasingly expect to interact with their service providers online or via apps."
But there is a future on the high street, says Hooker, for those retailers that focus on offering their customers the experiences and services that work for them. “We’ve seen a tough start to 2018, but it’s important to remember the British high street still plays a vital role in society and there are elements of growth amongst the headline numbers of decline," she said. "For example, almost 400 new clothes shops opened last year, even though over 700 closed. And, while four pubs a week closed, at the same time three a week opened."
She added: “The British high street is undoubtedly facing headwinds but retailers are waking up to the challenge and reimagining the future. The winners will be those who are agile and open minded in working out the best way to ensure their stores differentiate themselves and earn their place on the high street.”
These latest figures are part of a rebalancing that is reflected in updates coming from across the ecommerce and multichannel retail industry this week. Carpetright said
that it had finalised its company voluntary agreement that will see some 92 stores close while other leases will be renegotiated. The flooring-to- beds retailer said it had too many poorly located stores with "unsustainable rents". Chief executive Wilf Walsh said that completion of both the CVA and at the same time an equity financing would give it "an appropriately-sized estate of modernised stores, on economic rents, complemented with a compelling online offer, enabling Carpetright to address the competitive threat from a position of strength."
High street veteran Mothercare
also reflected the PwC commentary this week as it reported on growing online sales, but falling numbers of visitors to its stores. Like Carpetright, it has an estate of stores that was built when retail was balanced much further towards customer present shopping. Now it's facing the challenge of reshaping that for today's audience.
Online fashion to homewares retail group Shop Direct faces challenges of its own
as it reshapes its business for the way that customers now want to receive their orders – faster. In order to do that it has the challenge of moving away from fulfillment centres that served its catalogue business well with a loss of 2,000 jobs, to a future automated site that will employ less than half the staff.
Supermarket Tesco saw results this week
for its own strategy to reshape its store estate: it's worked with a range of complementary retailers to repurpose excess space from 20 larger stores, and it's refocused its convenience offer while also developing services that bridge the gap between online and the store.
We reported this week how House of Fraser will serve as a platform
to bring Chinese premium brands to the UK and beyond, in a move that goes some way to give the department store, which has faced challenges of its own
as it works to reshape for today's retail market, new value for its Chinese majority owner Sanpower.
This week we also report on the contrasting experiences of two retailers that started life in the digital age, without the legacy store estates or fulfilment centres. Pureplay Asos
and multichannel retailer Quiz
both reported fast growth, in-store and online, as they continued to invest in customer experiences and business models that work for their customers. That lack of legacy and ability to focus on what customers want is proving a real advantage on the high street as much as online.
Today's guest comment comes from Graham Best, chief executive of ReBound
, who considers why senior management need to focus on returns this year.
The 6th Ecommerce Cup
The new-look expanded event - now able to cater for up to 50 teams – is to be held on June 21. This is the sixth annual Ecommerce Cup, in which Tamebay is joined by sister publications InternetRetailing and eDelivery to host the event.
The expansion comes after the cup was last year oversubscribed, with so many players taking part that the pre-match briefing had to be held on the pitch.
This year's 2018 Ecommerce Cup will again be held in Shepherd's Bush – where the entire venue has been booked out – and is now open for bookings, with places allocated on a first-come, first-served basis. Click here to find out more and sign up
Find out more about upcoming InternetRetailing webinars and register for free on the InternetRetailing webinar page.
You can also catch up with past webinars on the page
: recent sessions have come from IBM Watson on using AI to improve the customer experience, and from SmartFocus and The Entertainer on using social to reach digital customers.