Digital doesn't have to mean death for the high street

Monday 4 March 2013

Deloitte restructuring services partner in Scotland, John Reid, on the high street’s battle for survival.

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Scotland’s high street is in a fight for its life. This shouldn’t come as a major surprise in light of a number of high profile retail brands including, most recently, HMV, Jessops and Blockbuster, having fallen into administration in the past few months.

Surprising or not, the extent of the high street pandemic is cause for concern. In July and August last year there was an average of 32 store closures a day across the UK and nearly one in every seven British shops is now vacant. And yet, against this backdrop of doom and gloom, December’s retail sales were actually up year on year from £32.6 billion in 2011 to £36.6 billion in 2012. The reason: a 15.5 percent rise in online sales. The exponential growth in online shopping has created a tipping point in the digital era with many commentators calling the increase in web and app-based retail the final nail in the proverbial high street coffin. However, while it’s clear the high street is facing some major challenges owing to fragile consumer confidence and rising rates, the digital retail revolution need not be one of them. Conversely, it may actually present the solution. There is a requirement for retailers to recognise tried and tested, dyed-in-the-wool strategies are a thing of the past. Management teams often like to stick to what they are familiar with, stay true to something they know has worked in the past and essentially play it safe; but that is no longer sustainable. Retailers now have to be forever on the move, they have to be agile and alert to customer needs in order to stay ahead of rival brands. The world is changing and those that don’t recognise that and adapt, won’t survive. Retailers which are performing well, such as John Lewis and House of Fraser, have embraced multi-channel buying, an approach which allows consumers to capitalise on the benefits offered by both online and high street outlets. For example some retailers are already offering app-based services using GPS which allows customers to get real time information at one end of the high street and see whether the product they want is in stock at the other end. Equally, just because the majority of growth we are currently seeing is coming from online stores, it doesn’t have to be a one way street and digital outlets can learn a few lessons from their bricks and mortar counterparts. Click and collect services have given stores like Argos a new lease of life and large multi-purpose retailers like Amazon could implement something similar using the click and collect method to diversify their service and sell more product. Online and high street stores can be good bed fellows and together they can strengthen what the sector has to offer. Digital shopping does not have to mean the death of the high street. Techniques such as multi-channel selling and employing new technology to drive footfall in store can create additional opportunities for traditional retailers to expand their market share and increase sales. Failure to embrace the new digital environment however and Scotland’s high street stores are resigning themselves to the retail graveyard.

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Digital doesn't have to mean death for the high street

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