There can be little doubt that UK retailers, especially those with a strong high street presence, are experiencing challenging times. The past decade has led to a transformative shift in the way in which people shop; enabled by technology, able to access anything from anywhere at the touch of a button and willing to seek out the price and fulfilment options that best suit their lifestyles. Add to this increased regulation and legislation, mounting cost pressures relating to national living wage and business rates, as well as uncertainty surround the implications of Brexit and it is easy to see why many retailers are struggling. Nevertheless, it may not all be as bleak as it initially seems.
The growth of online retail is often cited as a reason for the decline in high street sales, however, online sales still only account for around 17% of total retail sales. Of this 17%, approximately half (a little over 8% of total retail sales) come from the online pureplays such as ASOS and BooHoo, whilst the other half is comprised of retailers for whom online is just a part of its existing omnichannel strategy. For the latter, the ability to offer online capabilities such as click and collect, may actually be a key driver of footfall.
Secondly, despite all of the challenges in the industry at the moment, there are still high street retailers who are doing well. Lush, Ted Baker and JD Sports are all retailers who continue to defy the wider industry malaise. It is clear that the retailers that are doing well are those that have a well-defined proposition, aimed at a particular demographic and can therefore easily tap into the emotions and needs of their consumers and sell products that represent or complement their lifestyle choices.
The challenge for high streets is that it is not solely in the gift of retailers to resolve. The second Grimsey Review, published earlier this year, highlighted the need for greater collaboration between retailers, casual dining brands, landlords and local authorities in order to address the issues facing high street retail. As consumers focus on their own lifestyles and sense of individuality, so too must these providers. An understanding of who the local consumers are and how they like to shop will allow for a much more localised approach to high street retail, encompassing existing high street brands with newer brands – be it emerging national and international players or local businesses – offering tailored experiences, alongside casual dining, leisure propositions and public services.
As fundamental changes in consumer behaviour affect high streets, there will be winners and losers. Those that thrive will be supported by landlords and centre managers who recognise that pursuing an outdated arrangement of units with no focus on individuality or experience will not lead to success. Those that fail to appreciate this run the risk of being left with empty stores, serving only as a reminder of how things once were.