Why the high street is dying a mercifully quick death
There seems to be little doubt that the British high street has been dying a quick death. The recent numbers returned by many big chains indicate it is curling up into the fetal position ready for a final swift blow to finish it off. Sure there are some strong brands still operating and even growing but the stalwarts of the high street are desperately thrashing for any lifeline within reach.
The truth is that old style marketing methods and business models are dead. The way stores have been operating for the past 50 years has come to an end, and the brands clinging to these out-dated models are going to see the erosion of their margins accelerate rapidly until they are a penniless corpse.
The classic high street brands have been following the industrial media cycle to drive sales and profits. Get capital, buy stock, buy advertising to push people through door, push product on x margin, buy more advertising with margin profit, and around and around. There's always been "brand truths" and other marketing jargon thrown on but the truth is stores were a sausage machine where advertising pushed people in one side and profit came out the other.
This problem with this arbitrage model and style of advertising is that it was formed decades ago when distribution of information worked very differently than today. In the past the mass media was the only way to communicate to a mass audience and the ability to control advertising meant a merchant could control the information flow to consumers.
The branding of "best price", "never knowingly undersold", "customer satisfaction", "expert assistance", "wide selection" could control the perception and real-life action of consumers. If there was no way to easily obtain information of pricing, product availability, or product recommendation consumers could be more easily swayed by the brand messaging.
This information inbalance and control of mass communication has now been almost entirely destroyed. The internet has obviously eliminated any consumer need for advertising. Advertising is no longer considered to be an information input by consumers but rather an information barrier - an attempt to deceive and annoy.
There are still old-style consumers - that demographic will exist for a while, but it is a minority that is rapidly declining. The new consumer does not need an ad to inform on pricing or product availability when price comparison sites exist. The new consumer does not need advice from an in-store "expert" when specialist forums and communities abound online.
The comments on Bitterwallet show this clearly. People are upset about traditional retailers because the brand truths no longer correlate to experience. There is an information advantage that consumers have now but traditional retailers still treat us like we are ignorant and reliant on them for information. We don't respond to typical advertising, we aren't even listening.
The Linksys NSLU2 and WRT54G aren't best sellers because Linksys dumped money on glossy ads and sponsorships. The ASUS EEE didn't create a whole new laptop sector by package sponsorship with Happy Meals and the Daily Mirror. These "boring" products are huge because they all had communities emerge organically and passionately around them.
Despite this there is a bright future ahead for the high street. It's just going to be a very different high street from today. The stores that will emerge and survive are those that have escaped old style marketing and have learned to appeal to passionate consumers and groups.
The truth is that consumers do care about products and merchants. The difference is we care about merchants and products that offer something of value back honestly, openly and transparently. The new high street is going to be composed of merchants who understand that if they aren't in a trusted relationship, if they aren't communicating to their expert consumers, if they aren't building communities and information value, they aren't needed. The alternative is to be just a cheap commodity store with a proposition built on price and service but this is the domain of online merchants.
So the death of the high street is here. It's going to take a while to get it dead and buried, we're still going to see classic retail for a while and some sectors will have it easier than others, but the writing is on the wall.
TOPICS: High Street News