Ecommerce and the High Street - Assessing the impact of the digital age on high street retail

Written on 1/5/17

E-commerce is increasing. According to retailresearch.org[1], online spending in the USA went up by 14.5% in 2014 compared to the previous year and the total value of sales increased by $37.66bn (£19.78bn in Europe).

Almost every month new reports are produced that demonstrate a continual rise in business activity and sales taking place over the internet and alongside this, we hear of shops closing, businesses going into administration and high streets ‘failing’.

But is that the whole story? And what does it mean for retail jobs?

Online sales have increased by 18% year on year in the UK[2] - indeed, according to an article in the daily mail, 82% of British internet users regularly shop online. But, just because we are making a number of key purchases over the internet, does not mean that there isn’t still a place for high street retail jobs, the model has just adapted.

In the wake of the Christmas 2014 shopping season, some interesting statistics emerged, particularly around the new ‘Click and Collect’ service that is becoming increasingly popular for large stores like John Lewis who has seen a 27.9% y-o-y increase in sales made via this method[3].

‘Click and Collect’ offers an alternative to online shopping with delivery that allows consumers to research potential purchases in detail online and even perform the transaction at that stage but with the additional reliance of knowing exactly when and where you can collect your purchases. The overwhelming success of this service is being put down to the increasingly busy lives of many of today’s consumers which make home deliveries hard to coordinate but at a time when the ‘information generation’ is demanding more and more research time before making purchases.

The rise in ‘click and collect’ services, means that the need for large warehouse stocks and inventories is increasing and with that need comes a need for staff; from operations staff managing stock, to warehouse managers and customer service representatives, plenty of roles still exist in retail, even if every single traditional ‘shop on the high street’ were to close!

But that’s also not going to happen.

Studies have shown that, as people come to collect their online purchases from the likes of John Lewis’ warehouses, they make use of other high street stores in the process. Those doing particularly well out of this arrangement are boutiques and nifty little gift stores that stock a wide range of innovative and novelty products of the kind that customers don’t necessarily head into town specifically to get, but that inspire people as they encounter them and are picked up as more spontaneous buys. These shops, such as the huge Danish success story, Tiger, which doesn’t sell online, are thriving despite the global rise in ecommerce.

Tiger’s Managing Director, Philip Bier, said of the company’s success that very high footfall was essential[4]. By positioning stores in areas through which high volumes of people pass, Tiger are able to provide potential customers with the temptation to pop in and browse with the very high probability that, tempted further by the particularly low prices, they might just leave with something.

In addition to stores like Tiger that continue to expand and inspire customers, in Britain, other high street services such as coffee shops and convenience stores are increasing in volume in response to the increased footfall brought to the high street as well as the growing popularity of a coffee shop culture in the UK.

Furthermore, experiential shopping is also becoming more and more popular amongst British consumers and is driving customers to physical stores. Increasingly, retailers are beginning to generate new and exciting ways of presenting in store products to their customers and provide them with a novel or exciting in store experience.

For example, during London Fashion Week 2014, Topshop, one of the UK’s leading fashion retailers, streamed all the action from their catwalk show at the Tate Modern to their flagship Oxford Street store and provided five competition winners with the opportunity to watch it via a high definition headset in the store[5]. This experiential event was unique and different and had an undisputed ‘cool factor’ which attracted huge crowds of young, fashion conscious people, Topshop’s target audience to the central London store.

Other major high street shops such as Gap and New Look have put on street theatre performances and provided a mobile experience in the form of a moving Bus containing a denim store along with a number of other features to attract target audiences to their stores respectively[6].

This in store experience is often supplemented with online interaction, for example, the Topshop London Fashion Week experience was also streamed online and performed particularly well on social media and the New Look denim bus included an opportunity for customers to win £500 worth of vouchers in return for sharing selfies taken on board, online. This ‘omni channel’ shopping experience is aimed at seamlessly incorporating all available shopping channels into the customer experience and is proving extremely successful in today’s digital and social age.

So, ecommerce is not replacing the high street , it could be argued that it is, in fact, enhancing customer experience and providing opportunities for jobs and business within the retail sector. This relationship is neatly summarised in an article in the Huffington Post[7], which was published last summer and in which, co-founder of ‘The Chapar’[8], Sam Middleton, suggested that his online styling business was not a technological business but was ‘tech-enabled’. He argues that the human touch is essential for the success of his business, which provides style advice for men, but that the website, which acts as a communications platform and registration hub enables the creation of a non-geographically specific customer base and higher level of efficiency.

So, whilst technology may be enabling new forms of commerce and retail, so far, it would seem that it is not replacing the need for human involvement in the sector. In fact, at retail week jobs, in store retail roles registered on the site continue to be as popular, if not more, as those in ecommerce and both sectors saw a comparative growth in the latter half of 2014.

The rise in the popularity of omni channel experiences; new services, like ‘Click and Collect’ that merge online and offline; and the expansion of smaller stores that take advantage of increased footfall on the high street thanks to tech-enabled services, can all be considered responsible for this growth.

The high street is dead. Long live the high street!

References

http://www.inition.co.uk/case_study/virtual-reality-catwalk-show-topshop/

http://www.huffingtonpost.com/fueled/virtual-reality-and-retai_b_5594653.html

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9797618/Online-Its-not-really-our-top-priority.html

http://www.theguardian.com/media-network/media-network-blog/2014/jun/30/challenges-retailers-online-customers-shopping

http://blog.appnova.com/tiger-muji-prove-brick-mortar-stores-far-dead/

http://www1.planetretail.net/news-and-events/press-release/76-online-shoppers-use-click-collect-2017

http://www.theguardian.com/media-network-partner-zone-ebay/2014/nov/03/click-and-collect-boost-festive-spending

http://ecommercenews.eu/ecommerce-per-country/ecommerce-the-united-kingdom/

https://www.gov.uk/government/statistics/monitoring-e-commerce-2014

http://www.retailresearch.org/onlineretailing.php