While many high-street shops struggle to meet the cost of rent and business rates, online spending in the UK has more than doubled in the last five years. In 2007 online spending was just 3.6% of all retailing, in 2012 it was 8.1%. The UK spent a staggering £68.2 billion on the internet in 2011, £2,180 for every adult in the country; actually 60% of UK adults made at least one online purchase that year.
The first Monday of December (Cyber Monday) is regarded by internet retailers as the UK’s biggest online shopping day of the year. In 2011, a mammoth £19 million per hour was spent, with £465 million spent overall.
Estimates for the peak Christmas shopping week between 3 and 10 of December have been set at £4.6 billion for 2013. Online purchases are expected to make up 44% of total Christmas purchases next year, a 3% increase over the predicted 41% the previous year.
In 2011 more than 5,200 high-street stores closed, that’s 14 stores per day. They reckon 4 in 10 shops will be forced to close in the next five years for high-street retailers to remain profitable. In the past few years many well-known high-street retailers have been forced to close: Woolworths, Jessops, HMV and Comet, to name but a few.
With our love for the internet and always-connected devices such as desktops, smart phones (20% of online sales are now made through mobile devices) and tablets are we responsible for the demise of the high street?
I believe the high street has been slow to react to online competition – landlords still demand high rents and similarly governments have been slow to support embattled retailers. One of the biggest gripes of high-street retailers is business rates, which comprise up to 70 percent of the cost of rent.
The government has even hired television retail guru Mary Portas to help try and breathe new life into the high-street shopping experience but has been slow in implementing some of her recommendations.
“High Streets must be ready to experiment, try new things, take risks and become destinations again. They need to be spaces and places that people want to be in. High Streets of the future must be a hub of the community that local people are proud of and want to protect.”
You can read a summary of her 28 recommendations here.
When we did have multiple electrical retailers on the high street there was absolutely no competition between them, they all proffered the same prices. There was no real customer engagement, no real shopping innovation or experiences created to make us favour one shop over another and they even charged for delivery.
I don’t think we as consumers are to blame, as in most cases online shopping is a far more convenient and vastly more affordable way to purchase products; even more so in this age of austerity.
Personally, I love book shops. I like perusing the shelves for a new read or technical book; I love the physicality of holding a book and reading a few lines. I’ll even buy a book if it’s a couple of pounds more expensive but I can’t justify the purchase if I can buy it for £10 less online. The same goes for any other product; I’ve become a shopping voyeur. I’ll go to a high-street store, research and review my next purchase and even seek help from the shop assistant. Once I’ve made my decision, I’ll make my excuses and scurry off home to see how much cheaper I can buy it online. The ordering process is streamlined and quick, no queuing for me behind a mother and screaming child. Delivery in most cases is free and I can even have the item the next day. Simples.
I suppose I’m driving change by seeking the cheapest price, but isn’t that what shopping is all about… bargain hunting?
So maybe our high streets are destined to become the playground of betting shops, Poundlands and charity shops, and online shopping will become the norm.