What does the future hold for the high street?
Lastminute.com and online furniture retailer Made.com's co-founder Brent Hoberman believes that technology can be used to strengthen brands. “In the near future we’re going to see an awful lot of visualisation technology,” he told The Telegraph. “Returns with sofas were often because people couldn’t fit it through the door, but we’re going to see people uploading floorplans of their houses so that we know how everything will fit in. And augmented reality means that we will be able to see what items will look like in place, too”.
He thinks that it is still important to have a physical presence, as demonstrated by his made.com showroom. "It's a very small percentage of shoppers who visit it," he admits, but adds that there is something "reassuring" about it for customers.
Hoberman says that he thinks high street outlets will essentially become advertising for a brand, which will then allow users to shop online. “Big shops will become sort of brand cathedrals,” he argues.
Future shopping projects such as the Battersea Power Station that's set to open in 2016 and be completed in 2024, will need to consider how technology could affect retail and the high street in years to come.
“It’s clear that as online shopping has grown in popularity so planners, developers and retailers are going to have to work harder and harder to bring people into town centres and retail developments,” says Rob Tincknell, Battersea’s Chief Executive. “High Street shopping needs to evolve so visitors are offered not just a variety of shops, but also a variety of recreational opportunities. That means shops, cafes, galleries and restaurants side by side and framed with architecture and landscaping that make it a stimulating and rewarding place to visit.”
“Shops themselves will need to evolve to serve a generation of customers who may well want visit a shop in order to experience the product - but will ultimately transact online," he added.
Retail marketing expert DR Scott Dacko believes that the high street in the UK will soon undergo a "radical transformation" which will see shops become more like depots.
Fresh Business Thinking reports that Dacko thinks HMV, Jessops, Blockbuster and other failing retail chains are the victims of consumers' growing 'divergent buying preferences'. The success of retailers like Primark and Argos shows that the high street isn't dead yet, but businesses need to be fast in adapting to new technology and trends that this technology brings.
"Increasingly, businesses will have to provide a seamless online and offline experience for the shopper," said Dacko. "They also need to make sure people have a reason to go into their shops by offering unique value. That could be exceptionally strong value such as from 99p Stores or Iceland or in providing the most delightful of shopping experiences. But I also think over the very long term a number of shops will increasingly become like hubs or depots where it is convenient for people to pick up orders placed online, and clearly we are seeing that ‘click and collect’ is growing in use.”
According to Dacko, there are three main threats to the high street that businesses need to address. These are online players such as Amazon, which can offer low prices for their goods. "The high street has to deal with high fixed costs and higher labour bills, which, for example, put HMV at a competitive disadvantage.?These online companies have lower costs and a well-developed system for providing customers with what they need."
The second threat is rivalry from retail stores that are now offering significantly lower-priced, good value items that more and more customers are being attracted by during these tough economic times. Supermarkets like Aldi and Lidl have become more popular in the food market, leaving the likes of Sainsbury's and Tesco having difficulty competing with their prices. Primark is another example of a retailer selling low-priced goods to an increasingly frugal population.
"And then, too, there is part migration by some mainstream consumers to the high end of the market, as they periodically look to enjoy higher quality goods and superior in-store shopping experiences. This is how Waitrose is doing so well,”??adds Dr Dacko, which could ring true for customers opting to buy Apple products. "These dying companies have not been sufficiently adept with their marketing strategies. For one thing, many have not had a sufficient online impact, which is increasingly vital. HMV tried to diversify into live music and electronics, but such actions tried to compensate for rather than address the core problem of lost sales to online retailers. There will be others, too, who, similarly will not get their combined brick-and-mortar and online retail marketing strategy right."
Overall, it looks like the main message to retailers who are facing high street struggles is to think about what the customer really wants. We want competitive prices, but also a benefit that comes with choosing to go to the physical store, rather than buying online. That benefit is likely to be an extra experience that the customer wouldn't get from shopping online, such as Apple's Genius Bar and product set up services.
Personally, I believe that it's not Apple that's killing the high street, it's us. As customers, we are choosing to shop in a way that is most beneficial to us, and Apple just seems to know what we want, both with its iTunes and online services, as well as the in-store experiences the company offers.
What do you think is to blame for the demise of the high street? What action do you think retailers should take in order to attract customers back into their stores? Let us know in the comments section below, or on Twitter.