Up to four in 10 high street stores will close over the next five years as online shopping becomes more important, a new report suggests.
Deloitte’s Store of the Future study says that up to 40% of shops could close as retailers look to rebalance their portfolios in the light of strong and growing sales through ecommerce and mobile phones.
The report recognises a growing trend as retailers from Sir Philip Green’s Arcadia Group to Carpetright ‘rightsize’ their store networks, closing shops in the hope of creating more balanced estates that recognise how today’s consumers want to shop.
“The majority of retailers have simply got too many stores,” said Silvia Rindone, author of the report and director in Deloitte’s retail consulting practice, quoted in today’s Guardian.
The report comes in the week that the Boston Consulting Group forecast that 23% of UK retail sales would take place online by 2016. An arguably more positive vision of the future came from the BT-led Retailtopia report last week, which envisaged a future in which stores continued to be important in the customer journey but were improved thanks to the use of technology, including smartphones, that would make them both queueless and wireless.
Our view: This report is the latest offering in a debate that is attempting to imagine, and will therefore probably help to shape, the future of the high street. Things, after all, don’t change on their own – retailers following where they see customer demand leading will be the ones to make the actual changes.
But already this is a future that’s starting to become a reality. Shops are closing because more customers are researching and ordering online. But while retailers may currently have too many stores, it’s certainly the case that a window on the high street is still needed. Research into multichannel shopping suggests that shops remain important – a Shoppercentric study published in January found that 87% of shoppers still used bricks and mortar shops in the course of their purchase journey. Even if they’re not buying there, they’re researching, testing, experiencing, even simply checking that they want to make this purchase.
Forward-thinking retailers are currently experimenting to find out just how we would like these stores of the future to be. House of Fraser, for example, now has two HouseofFraser.com stores that carry no stock and act purely as ordering and collection points. M&S has introduced in-store screens that help customers explore its fashion collections, and John Lewis has installed wi-fi in its stores to enable customers to research their purchases via their smartphones.
It’s an interesting debate, and one that will only get more interesting in years to come.