It is well-documented that consumer habits have been changing for some time. More and more people are deciding to pass up on the opportunity of making journeys into their local retail parks and high streets and are instead opting for the convenience of purchasing online within the comfort of their own home and waiting for the product of choice to come to them. According to the Office for National Statistics, online sales accounted for 21.4 per cent of total retail sales in December 2019, and as the Covid-19 pandemic struck in 2020 and non-essential retailers were abruptly forced to close their doors in March, the popularity of online purchasing - albeit out of necessity - continued to soar.
While bricks and mortar retailers are now back open with the necessary social distancing measures and Covid-secure procedures in place on their premises, the effects of the pandemic have seen high street footfall plummet compared to last year.
Retail expert Springboard has indicated that in the week ending October 17, 2020, footfall on UK high streets was down by 40 per cent compared to the same period in 2019, with footfall in retail parks down by 13.2 per cent. In the same week, visits to malls and high street shops declined 3.1 per cent on the previous week, marking four consecutive weeks of decline. The introduction of the government’s three-tiered Covid-19 restrictions system has been earmarked as a contributing factor.
Meanwhile, as of the most up to date ONS data covering up to August 2020, online sales are only growing. Its prevalence rose to account for 26.6 per cent of total retail sales in August, having previously peaked at 32.8 per cent in May 2020 during the full lockdown, before physical retail spaces could reopen.
With the ongoing situation keeping footfall down in UK high streets and pushing consumers more toward online retail, it is feared that the pandemic could have brought the death knell for Britain’s high streets.
However, Brendon O’Reilly, managing director of property business Fashion House Group, does not see it that way.
Fashion House Group is a property business which prides itself on having a “different vision on real estate”. It has developments in Russia, Romania, and Poland where similar patterns in consumer behaviour are being seen. However, rather than accepting that the future of retail is to be solely online, O’Reilly insists that there will always be a cause for retailers to have a physical shopfront premises, and that the industry must play a role in enticing consumers to return.
One key reason for this view is that it is difficult to quantify what impact bricks and mortar retail has on fuelling online sales. This can be demonstrated in the scenario of a person who visits a high street shop and is able to touch and feel a particular product, but rather than buy it then and there, they instead choose to purchase it online later.
O’Reilly said: “The media has recently focused on the impact of online sales upon high street shops. Online shopping is becoming more convenient and the experience is becoming faster and better, but the real impact is not as pronounced as the numbers indicate. This statistic is a smokescreen, hiding the additional transactional costs, which include returns and handling costs. Let’s not forget that we always had catalogue sales, which have now been included into the online pot. How do you calculate the online sales that are generated after a visit to a store to look and feel and better investigate the product?
“Finally, what about online sales generated in real store because the store is out of stock of the item when you are in store? Online sales are an extension of offline activity, and a new channel for retailers.”
For O’Reilly, some retailers are finding themselves struggling against the power of online retail not because bricks and mortar business is outdated, but because they themselves are not keeping up with online as a new market channel and instead view online solely as a competitor.
In addition to this, struggling retailers are also failing to enhance the high street experience to make it relevant and appealing to the modern-day consumer. In O’Reilly’s view, those retailers that recognise the need for this and are able to up their appeal in this way are those that will succeed in future.
O’Reilly added: “The issue of competition is not that online has taken over retail sales, it is more about retailers and brands not keeping up with this new market channel. They see a threat rather than an opportunity. There are clear winners and sadly lots of losers in this new world. Consumers will never stop shopping in our high streets, new concepts new experiences and new retailers will take over the space of dinosaur retailers who rely on the loyalty of consumers to come back week after week to the same old products in the same old tired stores, rather than delivering new and outstanding experiences and products for them to buy.
“In some instances, for example, which amaze me, I can see UK retailers who expect the consumer to work harder to buy in their stores, than they do online.”
Without doubt, bricks and mortar retail does have a future in the UK and the wider world, but the sector must become more innovative to entice shoppers back to UK high streets. While the Covid-19 pandemic may be keeping many people at home for now, it will not be a lasting issue and as O’Reilly elaborated, consumers will never stop venturing to high streets and retail parks completely. Retailers must use this opportunity to alter their perspective of online and embrace it as an extension of offline activity, think about how they can improve and update the consumer experience and implement the changes necessary to keep Britain’s high streets alive. The high street is not dead, but now is the time for action.
