Disruption and Innovation in Retailing – Online vs the High Street

You may not have missed the news headlines lately about our high streets facing some challenging times. Noone is unaffected and even large ‘safe’ department stores are experiencing disruption in their sales with some of them closing at a very fast rate or on the brink of liquidation. There are lots of factors that may have contributed to poor performance and sales, especially with the current lack of consumer confidence, the weak pound with inflated prices, jobs at risks, high business rates, steep rents and overheads. No wonder accountancy firm BDO published their latest 2018 figures for their high street tracker confirming that footfall was down by 6% than 2017, and that there are further shop closures expected in the future.

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Source: eMarketer

 

In my research, I saw worrying headlines with the titles ‘Hell on the High Street’ or ‘The Death of the High Street’! However, it is not all doom and gloom. There are some real disruptions…and innovations already changing the way we purchase goods online and in-stores. Without a doubt, online shopping is changing the physical high street but in some cases – it is offering innovative new in-store experiences and also giving consumers more choices and a different shopping experience with the use of new technology and social media.

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I want to share my observations to highlight the great ways entrepreneurial and creative businesses are proactively changing the high street with the help of regeneration programmes. And I want to stress here that I will always seek to support the high street as it is our living environment and the heart of our communities and local businesses.

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One of the main factors of the changing high street is the proliferation of online buying. Global Data Online in ‘E-retail in the UK 2018-2023’ reports following “robust growth over the past 10 years, the UK online market is set to top £55.9billion in 2018 and remain on a positive growth trajectory, albeit glowing as the channel matures… the online channel will remain a key driver of total growth in the UK retail market as physical channels underperform due to falling footfall and shoppers seeking convenience and choice online”. More and more we are shopping online, and people are increasingly trusting online channels. The demographic analysis shows that younger people are using mobiles to order more so than compared to older spenders – and the figures are growing with social media penetrating retail markets to drive purchases, especially via the smartphone. Surely you have seen promoted adverts on Facebook and Instagram on your smartphone! We have recently just survived the US influenced Black Friday and Cyber Monday.

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The Global Data Online report lists the eleven drivers to online shopping and my personal comments are mentioned here too as I can relate to them:

  • Convenience – do shop from home or anywhere with a smartphone
  • Lower Prices – keep track on items for when they are discounted
  • Can shop at any time that suits me – order groceries from home
  • Save time – not spending time and travel costs to supermarket or high street
  • Better selection – competition to have higher quality and quantity
  • Product not available elsewhere – hard to find items so easy on digital
  • Allows me to compare prices – showing virtually without even visiting the shops
  • More product information – descriptions and photos help indeed
  • Prompted by Online promotions – how can you avoid promotions really?
  • Receive an online voucher – spend it when you can…why not!
  • Less likely to forget to buy it – it is in my basket and always there to remind me!

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This is being silly…but seriously online buying is here to stay. I started using Amazon in the late 1990s to procure books for libraries and our customers. I personally also used to buy music CDs in the early 2000s. I now frequently buy from most online shops or my favourite hunts. Compare this to the 1990s when I used to love browsing the physical shops in my lunch break when I worked near Covent Garden. Now I have a real problem with the shops being at my fingertips 24/7! I sometimes can’t avoid being distracted by push emails, adverts, change of season sales or campaigns. There is now an actual term called ‘impulse buying’ which I certainly do. Are you like me and try to justify your purchases? Yes, I look for bargains and so I try to control my expenditure. Certainly there is a shift in my online buying behaviour on the last 10 years and I am not alone.

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I do like researching items online such as when I recently needed (another!) pair of shoes for work. I was thinking of going to a shop for some comfortable shoes, but I was browsing online recently and saw the right colour, shape, heel height, size and at a discounted price! Therefore, I was unable to resist buying some new Vagabond shoes for work. One feature I look for in online shopping is ‘Click and Collect’ as I am not able to predict the delivery times to collect packages. This option usually means that you do not pay delivery charges and it is my preferred form of delivery. It really is as easy as that to get what you are looking for!

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Another major shift is grocery shopping. I remember my friends trying to convince me to buy groceries online circa 2012. I eventually started ordering groceries online and there are some clear benefits for me. Some of these include budgeting better, saving time by ordering at home rather than three hours of shopping in store, and avoiding to buy items in store that I may not need. Sometimes there are issues with items being replaced by either an inferior or even superior product. You might get squashed bread, wilted vegetables or occasionally order the wrong item yourself, but generally I like ordering food online as it frees up my precious time. I still go to the local supermarkets if I want fresh items from the bakery, butcher and to top-up my mid-week groceries. One friend pointed out that this is more environmentally friendly to grocery shop like this as there are less people using cars, or we are walking to local mini-supermarkets and shops for the mid-week shopping.

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The last main point about online shopping is the ubiquitous Amazon. It is no doubt that Amazon dominates the online cyberspace across devices due to its wide range of products and brand offering. It really is brilliant…but so annoying too! As mentioned above I do remember the earlier days of just buying books, but it is worrying the negative impact it may be having in dominating the retail space and pushing local and smaller shops out of business. Although Amazon says that it is helping small business sellers, there are also big picture issues that they pay little tax whilst their profits are tripling. I have love/hate sentiments about this and so now limit how often I order from them. For example, if I am looking for a book for personal use, I try to use local bookshops but would only use Amazon if I am unable to find the title easily.

Now away from online shopping, the ‘bricks and mortar’ high street is going through some disruption too from this ripple effect. The major retailers are having to innovate and cope with the aftershock of online but high street shops are also changing. For example, pubs are the fastest growing failing businesses but at the same time the pubs that are surviving are gastro-pubs serving food and therefore they tend to employ more people. My local pubs are now used for Quizzes, entertainment and other community initiatives. Coffee shops, artisan, creative makers, boutiques and other start-ups are forging new ground on the high street via pop-up shops, co-working spaces and regeneration of the high street. It is never easy. There are still immense pressures and costs to manage but generally, we are consciously trying to support local businesses by shopping local. In the past there have been the Love Your High Street campaign, and this weekend is the Small Business Saturday initiatives to promote and support local small businesses.

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I recently presented a webinar with Open to Export whereby food and drink retailers are doing fairly okay on the high street (with exceptions of course). Tobacconists, barbers, coffee shops are some of the growing independent businesses but there are some worst off businesses such as Post Offices (which are having to innovate services), Banks, Photographic services, Travel Agents, Newsagents and even Indian restaurants due to healthier eating habits. One thing is for sure is that shops have to be one step ahead of all the challenges faced by being smart and adaptable to the dynamics of the high street, technology and consumer behaviour. It is brilliant to see creative businesses and artisan shops thriving in some areas brought about by groups of creatives and makers who are proactively engaging with their local community and neighbourhoods. In my neighbourhood, they are also collaborating for the seasonal ‘shop local’ street promotions.

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I attended a recent presentation where the founder of Workary and Wimbletech spoke of all the benefits of localism and how these groups use their libraries, local councils and commercial co-working hubs to start and grow their business community. This sort of activities are very prominent in my local area and I couldn’t be more pleased and proud. I just don’t have the money to buy things frequently from these businesses but I am certainly rooting for their success and it pains me when a shop do shut down. The shopping mall is also actively changing to host a new coffee shop, local family friendly events and other social activities. It is interesting to observe all of these shopping options as we also have the famous Walthamstow Market adjacent to the shopping mall and the rising number of independent shops. Walthamstow Market is the vibrant and unique longest outdoor street market in Europe and should be a must on your visitor’s list.

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As we head into the busiest shopping season of the year. It is hard to think we will be exclusively shopping online…or on the high street. I certainly will be looking to mix-up my shopping experiences and try to support these two very different options to make sure that I go with the tech flow, but also to remain human and use these very different two options available to me. Some shops are adopting new technology and surviving brilliantly. Long may they innovate and survive the changes! The robots are not doing it all for us as yet.

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