Internet Retailing: Finding new models for survival

High streets have reportedly been 'dying' ever since the first hypermarket opened in Cwmbran Wales, UK in 1973. Penelope Ody investigated, for Internet Retailing, how online retailing is crossing boundaries and making retailers think again about space and place and putting experience at the fore of UK retail.

man with credit card | ©LDprod

Retail experts argue that 'the store' is a vital component of the omni-channel offering: a fulfillment center providing a digitally enhanced experience to promote the brand. Walk down many high streets, especially in less affluent parts of the UK, and it seems a very different story. There are still around 52,000 empty outlets around the country, many of them in economically challenged districts.

 

At the same time, footfall in the many high streets is declining and is easily affected by adverse weather conditions. Joshua Bamfield, Director of the Centre for Retail Research, argues that around 50% of high streets are coping “pretty well”, another 20% are in a “very difficult” situation, while 30% “could go either way”.

 

In many areas of the UK, units are often small with inadequate IT and poor access, argues Professor Bamfield. Serious remodeling will be needed over the next 10 years as small shops, inappropriate for 21st century omni-channel trading; will need to be enlarged–typically by converting five outlets into three–but with fragmented ownership in many areas. Coordinating that sort of development may prove difficult. Local authorities remain significant landlords in some high streets, leading some to suggest that bringing many of those services which were once found there–such as public libraries, job centers, schools, police stations, council offices, and doctors’ surgeries–back into high streets, could both encourage footfall and create a greater sense of community.

 

©Frank Gärtner

 

Managing the decline

Practical help in the form of major changes to the business rating structure, simplified change of use rules, or even local sales taxes used to support high streets, could all help the future of the UK high street. However, as Matthew Hopkinson explains: “There have been some government initiatives but it needs investment and no one is really looking at what is happening at a local level. For example, if a successful independent retailer owns a shop located in an area which is in decline, who will help them move? What happens to poor areas where the conversion to residential option really is not viable? There has to be a top-down initiative.”

 

 

Tomorrow's high-street supporters

While independent retailers and community groups may be the supporters of tomorrow’s high streets, national brands could become few and far between as the big chains reduce their estates: “Instead of 200 outlets across the country, some are starting to opt for 50 or 100 in strategic locations with other areas served by online sales,” says Professor Bamfield. Perhaps a decisive factor in the coming 18 months will be the very large number of 25-year leases taken out in 1990, when prices were low, which come up for renewal next year. If many of these, as forecasters predict, are not renewed, then the vacancy rates in UK high streets could soar.

 

Tony Stockil has referred to the local pharmacist as “the last man standing”, an outlet serving essential needs which can often be found on even the most depressed high streets. “What does the future hold for independent retailers on the high street? As supermarkets focus on smaller convenience stores and then optimise these for click and collect, furnish them with collection lockers, and local authorities bring frontline services into coffee shops and restaurants, we can envision tomorrow’s high streets - even in the more depressed parts of the country - as vibrant, effective ‘service hubs’, moving beyond simple ‘shopping’”. The national chains may have deserted, but such streets could well be the regions of tomorrow’s retail success stories.

 

 

The full article is in the Retail Space Europe 2015 reference book. Purchase the book in the webshop.

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