The high street isn't dying. Stores are.

28 December 2011

Every pundit these days agrees that high street retail is in its death throes. Over the last few years we've seen one after another big brand struck down as the credit crunch magnified a consumer trend away from the high street. There is little doubt that we haven't seen the last of this as the remaining entertainment chains crumble and the electronics sector hovers on the edge of collapse.

Despite this we love to shop. Sure, the economic malaise of the past years has hurt the discretionary amount we can spend but if one looks at multi-channel retail overall there is little to no decline in overall consumer spend. Those who cry about the death of the high street are missing the fact that the high street isn't dying - stores are.

Transactional based stores have no competitive advantage to their online brethren. Online is faster, cheaper, more transparent and overall easier to use as a consumer. If high street stores exist as a place to simply transact they are sure to lose to the efficiency of online retail. The carcasses we see wheeled off the high street are not the remains of high street retail but rather of those stores which try to compete with a transactional model stacked against them.

There has to be a meaningful move away from transaction based stores if we are to see the high street flourish (and I have no doubt that it will flourish again). The same aspects which make online retail so deadly to bricks&mortar stores also are its greatest detriment. Online is efficient, impersonal, and transactional - all areas which can be seen as a weakness by a true consumer focussed store. Unfortunately, b&m stores have been so focussed on fighting in the transactional arena with online that they have abandoned the areas where they have an advantage.

One of the weaknesses of the online transaction model is that brands have few opportunities to shape brand perception and introduce new products. There is little editorial power in most online retail and it is not an area where online retail has a inherent advantage. An ideal offline store focussed on consumer experience, engagement and advice provides an ideal platform for brands to build their messaging and gain new customers.

Simply put, the high street needs to change its focus from "how do we sell more products" to "how do I create value for consumers". The former mentality is what has led to commission based sales agents, pop-psychology mind games like DSGi's "FIVES" and never dying zombie promotions advocating 2-for-1 deals. Instead, I'd like to imagine a future high street where walking into a store meant walking into a carefully curated and edited selection of products staffed by experts in respective fields who don't care whether I transact with them or with Amazon.

The end game in this shift seems to be that online retail is going to be the master of transacting and they will battle on a field of pricing, product service and technical information. In contrast to this, offline retail will be a series of showrooms battling each other for knowledge, product support, learning and personal advice. In one sense online retail will be the wholesale catalogues of yesteryear and the high street will be the editorial magazines where brand, voice and curation are key.


  • PlatinumPlatypus
    And everyone will go into these 'boutiques' to benefit from the service, then simply go make the purchase online anyway.
  • Paul Nikkel EDITOR
    I still want to write about new models for the high street. There's some good thinking in the comments in here:
  • oliverreed
    So the big chains and out of town retail parks killed/damaged independent retailers and now in turn the internet is killing the poorly thought out big retail chains with little to no parity between the highstreet and their online departments. Although isn't John Lewis thriving? Maybe a mixture of high value, good quality, knowledgeable purchase and bookable delivery service and decent after-care with additional *ahem* free warranties is the way forward rather than some monkey-spun together sales target mantra and the obsessive need to sell £50 HDMI leads. * I'm sure you pay for the warranty somewhere but hey, it seems to be no quibble
  • Jon L.
    The biggest killer is the need for each individual store to turn a profit against rival stores and online outlets within the same company. A high street HMV can't even compete with its own online branch. Chains need to think about becoming joined up - letting me get my HMV parcel delivered to my local branch; allowing me to return goods to the local branch, but to do that, the branch can't see online as a rival.
  • Jeremy
    I went into M&S today. They'd closed the changing rooms "because of the sale". Great displeasure; told the manager they were useless and a waste of space - strangely they didn't throw me out. Can you put M&S on your endangered list? I went to John Lewis instead.
  • Kevin
    If the shops aren't selling what people want to buy it doesn't matter if they are online or on the high street. We are all a lot more savvy now and just won't buy at the prices they are offering. This is especially clear round Christmas/New year when the same products (ie not christmas ones) are suddenly available for half price. If they can make that much of a profit from us during the year then why should we care? Of course it's not that simple but it's a simple thing to see and to be pissed off about.
  • Al
    The costs associated with high street stores is too high and, until that changes, the high street is going to die. The obvious part is the cost for the consumer ... the petrol and parking cost to visit my high street fora couple of hours is almost the same as next day delivery from Amazon. Bring back free parking and consumers may return. Similarly, the rent and rates on high street shops needs to reduce. If retail space was pretty much free (or even subsidised) then internet retailers would be tempted to open shops to showcase their best products. Physical b&m stores musn't charge more than the internet price for their goods and until a solution to that problem is found (reducing the overheads of a b&m store to nil) then the high street will die.
    • Paul Nikkel EDITOR
      @Al Yep - I think part of the revival of the high street will come as rent prices come down. The cost of renting a high street storefront has been dropping rapidly as chains go bust and I think this new price level will encourage and support a new round of retail innovation.
  • Baconbuttie
    What has been described here is very much present in a Virgin Media retail store (in which I work). The aim is to showcase the home service products and to offer expert advice about their use and function. While I agree that yes, getting this experience then setting it up online will happen we are able to offer a customer contact point if you choose to register in store (and many do, we do pretty well). Yes it is comission based but the hard DSGi sell is not there. Similar to apple stores the focus is on the product and the customer not the transaction, did you know it makes absolutely no difference to a sales assistant if you walk out with a galaxy S 2 paying £40 a month or a run-of-the-mill phone on a discounted £7.99 rate? Fully agree with this well written article, viva la web and like Jon L is saying, retail need to interact and integrate the online platform, seriously now, we know it works and we like it but there will always be some form of highstreet so lets make use of both at once.
  • Vincent
    Another great read. Keep this up, Paul! Is there a way to see all the articles you have written? The dominant factor that influences the online shoppers is price. Online shopping will always be cheaper than shopping in-store. Shoppers that buy online are also more sophisticated nowadays that they do not only compare prices of retailers in the UK but also those from other countries ie. USA and Hong Kong/China. So brick and mortar stores are not only competing against online retailers within their respective country, they are competing against the world.
  • Phil K.
    Online HMV have appalling after sales. The High St one is fine.
  • Paul Nikkel EDITOR
    @Vincent - Thanks! It's a good point that the longer game means online retail in UK will have to be competing against the Dealextreme's of the world as well as Amazon. It's only going to get uglier online and I think online stores need to think about curation and editorial already. You can see this happening with sites like Thrillist/Jackthreads where media and commerce is combined in a "lifestyle" brand.
  • Paul C.
    @Jeremy M&S close their fitting rooms every year. It's because people act like cunts and take hundreds of items into the fitting rooms when there is a limit. It is purely unmanageable - so they out the resources onto the returns desk to speed up the inevitable queue of people returning unwanted Xmas items, and onto the tills for those who will want to buy sale items anyway, regardless of trying an item on. As for abusing the manager - I think you're a massive cunt. Perhaps someone should come to your workplace and call you names for following policy. This country....
  • Vincent
    @Paul - Brilliant, I will definitely catch up on some of your articles that I may have missed. Also, I am beginning to see an integration between a company's brick and mortar store and their online store. This will make the purchasing process even more seamless for the customers. But at the same time, many other companies cannot keep up with the technological advances and are now being left behind. Ultimately, its the local moms & pops store that will suffer the most.
  • David
    This somewhat misses the point. I think there are other factors which are literally pushing consumers to shop online and away from the high street. This year I did what shopping I had to do online. It had nothing to do with price. High street shopping is one big disappointment these days. Shops have little variety and stock the same junk as last year. Parking is expensive and I have to pay extra to park a good 15 minutes from the shops to make way for all the (empty) disabled parking slots, spaces for people with children etc etc. When I do pay the card machine probably isn't working and only accepts 20p coins today. And the rain. Yes I get rained on as I walk from the parking spot to the shop and back again. It's raining when I go to the cash machine to draw out a tenner. It's still going to be raining when I find some excuse for a snack at Greggs that I am only buying so I can ask them for 20p coins so I can pay to park miles away from the shop that is stocking stuff I don't want. Shops are staffed with either experienced and rude 60 year old women or 12 year olds. And another thing. You have to climb over all the old people who aren't buying much anyway on their scooters almost knocking people over. Dodge some more jam-faced benefit babies in oversized pushchairs as their mum looks to see where BrightHouse has moved to while dad queues up with the kids' Playstation at Cash Generator to flog it before the weekend. It's all so depressing. And that's why I shop at Amazon.
  • shinkyshonky
    As always excellent article Paul the key quote Online is efficient, impersonal, and transactional – all areas which can be seen as a weakness by a true consumer focussed store. Should be taken on by all retailers, sadly will not
  • Sicknote
    A little while ago I found myself in a high street near Southampton, it was called Shirley High Street - I say high street but what I mean is open urinal really. I thought for one second that the Olympics had started early with everyone decked in leisure wear but my wife said that was just he uniform you wear when claiming JSA (job seekers allowance). Well, about every second shop was a charity shop selling all matter of items including what appeared to be a second hand bra on a mannequin in the window. If it wasn't a charity shop then it was a pay day loan shop, a pawn broker of some description and my favourite shop called Brighthouse; this shop sells stuff to people that can't afford it in the first place at an APR interest rate of 29.9% The high street hasn't died at all; it's simply adapted to the needs of the locals. And that's why I buy almost everything online today.
  • Free K.
    Another thoughtful article, Paul. High street needs to identify what they do best. Instantaneous delivery, local, curation, unique stuff, high touch and value added personal service. Add a free wifi connection/voucher so they can get a cut if the buyer gets the goods of Amazon instead. Maybe something along the lines of a boutique Argos. You get to see the goods, have them explained and demonstrated - and buy them there if you wish or if you want them a bit cheaper and are willing to wait, you can have a voucher and comission link from the store. Alternatively pop-up stores which avoid the high rents and need for staffing during the quiet periods but remind people that they are still around.
  • Alexis
    Not ALL high streets are in decline. The difference is that successful high streets are new and modern. An ageing 1960s high street is a miserable place to visit. Build it and they will come, yet nobody has any money to rebuild town centres. You wouldn't see an Apple store in Stockport - if nobody wants to visit your town, nobody will want to have their shops there and it snowballs into a dead high street full of charity shops and no visitors. Look at Manchester Arndale and Liverpool 1. If they were as they were 10 years ago, they'd be dead. People expect nice, modern town centres. Not a relic from the 60's, full of Scopes and Farmfoods.
  • Loafer1946
    Both John Lewis and M&S are busier than ever. The difference is that they offer a brilliant service and competitive prices like for like against the internet.
  • Loafer1946
    Sicknote. Shirley has always been crap even in the boom years. It is too near to Southampton's main shops and West Quay to compete
  • PaulS
    I posted this in another earlier article but thought it worth repeating. The trouble with b&m stores is that they do not help themselves even when they have an online link. My story is that a couple of months ago I moved house and needed a new cooker, Currys were advertising one of their many sales so my girlfriend and I went to have a look. After a quick browse we settled on a particular oven and waited for a salesman. While waiting I did a quick Google Shopping search and found the same product available at Dixons Online for over £100 less than in the Currys store. When the salesman finally graced me with his presence - which was as I was on my way out fed up of waiting - I asked if he could price match Dixons. He gave me a flat out no, even telling me that the stock would be the same from the same warehouse delivered by the same person if I wanted that price I should go home and order online. Which struck me as quite baffling why they couldn't sell me something from their warehouse at the cheaper price in the store - after all it would be the stores sales figures that would get a little bump - or was an extra £100 too much to lose out on.
  • Richard
    Can I please put one myth right. DSG, PC World / Currys haven't paid sales staff personal commision since around 2001. Sure they have targets they have to meet and certain products they must push as extras simply because they're high profit margin earners. There use to be a small bonus if the store hit their target but I don't think they even get that now. I worked for them for a number of years but left in 2002, as for the "Fives" thing, I have to agree it's hillarious.
  • Paul Nikkel EDITOR
    @Richard - It's a bit of a grey area between sales commissions and getting paid a bonus to hit certain sales targets. In the end it encourages the same kind of behaviour.
  • commy
    it may seem like a grey area but its not for the staff. commission meant guaranteed extra money for the sale. the bonus structure now is based on customer satisfaction thru exit surveys and mystery shoppers, then depending on the level of satisfaction achieved over a 3 month period, that sets a level of bonus such as an extra 30p for every contract hr worked, then add in the bonus for store margin targets and it gets more complicated. so basically if you sell an absolute shit ton of products but none of them make much margin, you arent elligble for bonus, and the same if your store doesnt hit over 85% satisfaction rating, you get squat. so its not guaranteed pay outs for selling anything. you personally could bust your ass selling everything with an add-on and warranty but if the store is a shit tip and customers arent happy, you still get piss all, same if the rest of your fellow sales people don't do as well at selling margin rich items as you.
  • Jeremy
    @Paul Coia I'd just like to say that you're a real Cunt too! Happy New Year!
  • Bish b.
    It has been interesting reading everyones views on this subject however there is no reason to slate each other!!! I live in Southampton - well outskirts - Hedge End and I have not and would not ever dream of shopping in Shirley. Most little towns are now all the same - charity shops, banks, florist, hairdresser, cafe and then the trade in shops. The big centres have done this as the footfall isn't there for the chains to pay the rent. I travel the country and I parking is a good point. Metro - Newcastle, Meadowhall - Sheffield, Bluewater - Dartford, White Rose - Leeds are all FREE to park. So why do you pay over 20 quid for the day in Uxbridge, Reading, etc etc!!
  • businessman
    What is the point of re-inventing shopfulls of helpful sales people who show you the product and give you guidance and all that? If I want a Canon xyz666 then I want a Canon xyz666 and I'm going to buy it at the cheapest place that I think will give me least bad customer service if it breaks. I don't want a shop-spod to show me how the product features beforehand, even if he does actually know.
  • Keith
    I used to work at MVC (the Woolworth's owned music/dvd store), and at least in our store, we had a great connection to our customers, and a really good name for customer service, product knowledge etc... to the point where we had regular customers asking us what new things were worth buying. We'd also actually get alloted time to learn about new stuff, be allowed to make our own playlists in store, sticking to some basic rules about not playing mental stuff that'd empty the place or sweary things. Sure we had some customers who'd come to us, use the listening posts, take up our time then bugger off to order it online to save a pound, but that's part of the deal. What I believe killed us off was the change of management, we were bought out, and the new management stated pretty much that customer interaction was time wasted that you could spend trying to push additional sales on people, it was also the first sign of those piles of 'extras' at the till - "Would you like to buy any of these for £2.99?" (which yes, we were supposed to parrot out to every customer), and a fixed playlist of mindless chart pop, in a store where the staff and store had earned some respect for actually knowing about music of all genres. Yes, we had a jazz and a country specialist, and we could all at least recommend a few things in most genres. No more wasting time with that, just get those X Factor displays filled and keep pushing the extra sales. Unsurprisingly, we lost regular customers, and our profits went down, and they decided it must be the staff's fault. They also started cutting back on staff perks, even those that cost them nothing, seemingly just in an attempt to make sure they weren't giving anything away, or maybe just to let us all know there were new bosses in charge now and things were going to change. In the end, a few months later, we closed and the rest of the company wasn't far behind. As for Paul Coia, leave him alone, his quiz show about hills was excellent, even tho it was only available in Scotland. I do fully agree that if you don't get what you expect from a store, there's not really much point just yelling at the first person in a uniform, consider your complaint, and then decide if the manager can fix it, if not, write letters. Head Office often bends over backwards to accommodate customers, while not letting staff do diddly squat when they'd really like to be able to send you away happy. whoa, Wall'O'Text, but I left some gaps at least, and as I've been there, both as bog standard staff and management, I feel I've got enough to say on it, and believe me, I've held back! As ever, part of the problem is once you hit management above store level, they don't see stores enough and don't deal with customers, they see reports and numbers. We need to promote more people from store level.
  • Keith
    In short, if you're not supplying some form of extra product knowledge to what's written on the box, or some genuine customer service, you're doing nothing better than an average website, and then why the hell should anyone come to you. Bosses, there's NO point cutting service or training to cut in store costs, as you can't match online prices (unless upper management remove their heads from the dark stinky place they store them and link online to high street stores), being BETTER is the only way, you can't do cheaper and still pay rent and staff. As for the trouble with price matching online, again, it's due to rule, if he knocks £100 pounds off for you, he loses £100 off his budget, he may have to sell another 5 ovens at full price to break even, and that's not your fault, again, they need to LET the staff match their own online prices. You can't match everyone, but damn, if you can supply it online yourself for £300, then if they want to walk in and load it into their own car, no delivery or anything, then match that £300.
  • Casper
    HMV days are numbered because everything they sell you can get cheaper elsewhere. Who buys a back catologue cd for £15 when a quick look on amazon/play etc you find the same cd half the price. HMV should try and stick to big super stores and close all the small ones. It has clearly been badly run for years and the directors have just been lining their own pockets instead of saving the coming
  • Jeremy
    @Paul Coia, @Keith, I expect the store manager of one of M&S's flagship stores to have some decision making capabilities. I have written to their Head Office - but will make every attempt to avoid shopping with them, whether its food, clothes or whatever. All the old customer service outlets such as Woolworths or HMV are dead or near to it. If if I want customer service, I shall go to John Lewis. They always seem knowledgeable and helpful.
  • Harfyyn
    It will be interesting to see what happens when LVCR (Low Value Consignment Relief) is abolished from 1 April 2012, and items shipped from Jersey will be subject to UK VAT. Personally, I think we will probably see an across-the-board price increase from certain online retailers.
  • Keith
    @Jeremy - Entirely agree about store management, but they don't, it seems there's a terror that any store might be slightly different to the other hundred in the country, and rules must be obeyed, sadly. @Harfyyn - I think it's a shame, all it's going to do is leave the Channel Islands rife with unemployment and send all companies there to another country instead, they're not going to move to Southampton, create jobs, and pay all the extra tax, they'll just move further away instead. I say that, having a best friend who's losing his job there in April as his company is readying to relocate.
  • Jeremy
    VAT rates in Switzerland have recently increased to a MAXIMUM of 8%... I know where I would put my Company HQ in the near future.
  • zaphod
    I like shirley, it`s cheap ,cheerfull loads of free parking, far easier and cheaper than goin into southampton town centre .yes its a shadow of its former self -gone the indie toy shops mens o utfitters,tailors,fishmongers etc etc but its cheap and busy, loads of footfall. Adaptation ,it survives its retail evolution ...this could be the future up and down the country....aarrrrgh i`ll have to adapt , i told her not to throw out that shellsuit in 1988 i knew i would need it eventually
  • New C.
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  • The w.
    [...] Original Article [...]

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