By Monika Balavakaite, Writing Analyst at Unicast Entertainment
Customers’ buying habits have greatly fluctuated over the recent decade, largely due to the rise of e-commerce and increasing consumption of experiences rather than tangible products. In recent years we’ve arguably seen the beginning of a shift towards a so-called ‘experience economy’ as purchasing access to memorable events has become a greater priority for consumers. Subsequently, spending in restaurants and pubs as well as theatres and cinemas has steadily risen, whilst the demand for certain material products has simultaneously declined. Furthermore, as global access to the internet and the use of mobile phones has quickly grown, the popularity of online shopping has followed suit. Online outlets have allowed businesses to eliminate the costs associated with maintaining physical stores and reduced search costs for customers, which has debatably modified their shopping experiences for the better. Although online retail isn’t as immersive, customers can conveniently make purchases at any time, from virtually anywhere, and have access to a greater variety of goods; hence it isn’t surprising that buyers and sellers have taken advantage of rapidly expanding e-commerce platforms. Such changes in purchasing patterns have contributed to a rise in closures of traditional brick and mortar stores, which has raised concerns about what the future of high street entails.
Multiple lockdowns and changing restrictions indisputably exacerbated already prominent issues faced by Britain’s high street stores. Between 2015 and 2018, employment in high street retail was already declining in all regions, excluding the North-West of England, and this trend was naturally accelerated when consumers were forced to move to shopping online due to the closures of non-essential stores during national lockdowns. In addition to this, thousands of these non-essential stores were unable to reopen their premises once restrictions began to ease due to the financial hardship instigated by the pandemic, leading to net chain store closures rising by 30% in 2020. Given the importance of the retail sector in contributing to Britain’s economic growth and supplying millions of jobs across the country, it’s vital that firms respond to changing consumption patterns to prevent and reverse the gradual breakdown of high street retail. The chancellor, Rishi Sunak, announced a £5bn plan in early 2021 to support high streets in their post-Covid recovery, however some have argued that government support isn’t a sufficient solution in the long run. Unless retailers can adapt their operations to provide more enticing customer experiences, and incorporate the growing importance of online retail into their services, the downfall of high street retail is likely to continue in coming years. Tessa Clarke, the CEO and co-founder of OLIO, discussed the growth of e-commerce and why the retail sector must reinvent itself in an interview with Unicast Entertainment, agreeing that, “we’re going to have to move towards a much more services and experience based economy”, as high streets will ultimately need to change to survive.
Despite the clear struggles faced by high streets in recent years, some are optimistic that they will recover as we’ll see more online based retailers expanding into brick and mortar stores. The world’s largest online retailer, Amazon, has begun opening physical stores in large cities like London, with plans to expand across the UK to reap the benefits of having both physical and online outlets; opening physical stores allows them to cut delivery costs and reach a wider customer base, whilst still enjoying the benefits of their colossal online presence. However, unless these stores can offer something beyond the traditional customer experience, we’re likely to eventually see a retail apocalypse. Some have suggested integrating aspects of certain experiences to make shopping more than just a single transaction. For instance, offering consumers a place to socialise within stores by providing dining in options, or allowing them to enjoy a drink whilst looking for products, may attract more customers to physical shops and build brand loyalty if a distinct service is offered in a competitive market. Businesses like Ikea have been able to do this successfully as they have a strong online presence as well as physical stores which offer an immersive experience. Within stores, consumers have access to play areas for children, can try affordable Swedish food, and see products on display in various showrooms, consequently making the business a leader in retail brand experience. Similarly, some fashion outlets have started opening coffee shops within their stores, gradually making a shift from traditional to experiential retail. Such changes may prevent the collapse of brick and mortar outlets, however, given the rapid pace at which customer preferences fluctuate, it’s difficult to foresee the future of high street shopping, as it’s heavily dependent upon how quickly businesses can adapt.
To hear more of Tessa Clarke’s thoughts on the due revolution in retail and more, watch her full interview with Unicast here: https://youtu.be/ZK1y85Lo7l4
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