The rise of internet shopping has caused severe problems on the high street as more consumers turn from traditional shopping methods in favour of having their items delivered straight to their doors. Now a new report has revealed the repercussions of this consumer trend and the permanent affect it could have on the British retail industry.
According to the Centre for Retail Research (CRR), up to 20 per cent of high street shops will have closed in the next five years, meaning a total of 62,000 commercial properties will be added to the high vacancy rates already plaguing towns nationwide. Yet vacancy rates would not be the only statistic affected by the closures, as 316,000 workers will become unemployed should this forecast prove correct.
Professor Joshua Bamfield, who produced the report, cited that pharmacies and health and beauty stores would be the first casualties due to the high numbers of consumers relying on pharmaceutical concessions in supermarkets to provide their goods and prescriptions. Next, specialist retailers dealing in books, music, cards and stationery will be forced to close due to a lack in demand, with DIY stores also struggling to post adequate footfall rates.
Of course, this trend has already begun, with the high profile closure of music and entertainment chain HMV. Although the firm has been taken over by rebranding specialists Hilco, the rise in popularity of music and film downloads means the brand has an uphill struggle to return to profitability.
However, there is some good news – Professor Bamfield highlighted the success of Argos’ click and collect service, which combines online shopping and physical retailing. The chain has reported that more than 30 per cent of sales are now made using this service, which has allowed Argos to post rising sales since a significant upgrade of its digital platform.
Professor Bamfield believes that, if more stores established systems of this kind, they could greatly increase their chances of survival.
He says; “Customers now shop in multiple ways, checking a store’s website, visiting stores, reading reviews and making online price comparisons with smartphones whilst shopping.
“Retailers have to make clear and strategic responses to the changing pattern of how consumers shop which includes tactical decisions about store numbers and locations.
“They also need to fully integrate these physical stores with their websites, smartphone offering and social media community coherently.”
The CRR predicted that the number of sales made online will continue to increase year upon year, with online shopping accounting for 22 per cent of total sales in the next five years – double the current figure. As a result, it expects local councils and developers to combat increasingly high vacancy rates by converting empty shops into affordable residential space.
With many initiatives in place to save the high street, the future for the retail industry currently hangs in limbo. Only time will tell whether a return to “retro” shopping is on the cards or if the CRR’s forecast will prove to be correct.
Do you think small to medium sized retail businesses should be provided with technical support as a means of improving their online presence, or would the money this would cost be better used to slash business rates?
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