What’s to become of the high street in the post internet age?

This last week/month/year (take your pick) has seen a slew of big name deaths on the high street. Jessops, HMV and Blockbusters all fell in the last week and more will follow. The doom sayers will bemoan another boarded up shop and talk about the death of the high street, the sad lose of the jobs, and cast snide remarks at the internet stealing the soul out of town centres and the social aspect of the shopping experience (in articles published and read mostly on the very Internet they are bemoaning). Not me though. For some reason I’m in an optimistic mood tonight (possibly cause my glass is now only half full of this fine alcholic beverage) and have decided to concentrate on the good.

For a start, the high street died in the UK a long time ago. It’s not a recent thing, it’s been dead for an age and you know what killed it? No, not the internet but chain stores. I live in London: the Mecca for many of UK high street shopping. I could be in Slough to be honest and I’d barely notice the difference – except maybe it would be slightly less busy so a more pleasurable experience. I’ve never been shopping in Slough, and I’m only picking on it because of Ricky Gervais, but I’m pretty confident in that statement as every high street in the UK has, without exception, has been infected by body snatchers who have replicated across the country so we now have the same, faceless high streets everywhere. I’m willing to bet that Slough high street has a Next, a Top Shop, a Gap, probably a Benetton and perhaps a Zara. It will definitely have multiple McDonalds, a Burger King, and undoubtedly a KFC and a Pizza Hut. It will have a Dixon’s/Curries, a Waterstone, an Argos and until this week a Jessops, HMV and Blockbusters. In between will be several Barclay’s, a few RBS’s and a Nationwide or two. There will be a Tesco’s, a Sainsbury’s and a Lidl. There will be a Starbuck’s every 2 blocks as that is now the law. Let me know if I am not at least 90% right on this.

It’s important to realise I’m talking about the high street. Not the cool town-specific markets with their weird collection of fruit and delicious smelling tidbits. Nor am I talking about the funky alleyways that house that cool independent record shop, next door to the funky coffee shop that ONLY serves fair trade coffee and home made buns. These have to be hunted out with a bit of effort by exploring lesser known side streets and all the better for them. They are not the “high street”.

Now, don’t get me wrong, there’s a lot to like about the chains (I’m in a positive mood remember!). They brought three main things to the high street: 1) Cheap prices, 2) Pleasant, clean, environments and 3) Uniformity. The funky alleyways mentioned above are amazing finds but the high streets of my youth, when there were a lot fewer chains, often had expensive, dingy shops that were difficult to naviagte and find what you wanted. Unless you went to your nearest big city, you had to make do with worse shops and pay more. Now if you need a plain, white v-neck t-shirt anywhere in the UK you can pick it up in seconds as you know Gap will have them, and that TK Max will also have them at half the price. Also sometimes in a foreign country you’re tired, don’t feel like trying something new and are delighted to see the familiar golden arches which will serve you a Big Mac simply by pointing and handing over some coins. The chains deliver what most consumers want and that’s why they have been so popular. In fact I’d argue that they initially had a positive impact on the quality of the high street. In a similar way Ryanair initially had a positive impact on the airline industry making air travel affordable and, like that airline, you still use them cause they are cheap and convenient even if you have begun to hate them and everything they stand for.

However there were negative impacts to the chains: they killed the independents who often were more knowledgeable and gave better personal service (people in Dixons know very little about electronics compared to your local hi-fi store and are more interested in a quick sale, though Jeremy Clarkson and a few others thought Jessops was the exception here), they sometimes were a bit cheeky on the tax they paid and most of all they homogenised all our high streets so they are all the same. It’s this last one I find more depressing and the UK seems to be the worst at this and taken it to the extreme. Go to Cork in Ireland and nearly every street in the city centre is a full of shops you will never have heard off! Looking down any of the main streets and you really notice that the chains are in the minority and you have to hunt them out to see them (and yes I’m including Irish specific chains), whereas in the UK it’s the reverse with the odd independent shop being the complete minority. It’s delightful for each high street to be different and makes shopping (something I hate I’ll admit) much more pleasant. Granted Dublin, like most capital cities is very much more like any other UK city, but most of Ireland stands in contrast to most of the UK.

So to me the chains killed the high street. And now they are being killed by the internet. Why? Because the very benefits they initial gave us (1: Cheap prices, 2: Pleasant, clean, environments and 3: Uniformity) are being done so much better on the Internet. Internet retailers are cheaper and easier and more convienient to browse. They have most of the same negatives: they offer even less personal service, they abuse taxes even more, and have homogenised to even fewer store fronts (Amazon and iTunes store for most of our online needs). The chains have been out bullied by the very same attractions that they used to gain their massive growth. The irony is delicious.

In addition they have nearly all reacted pathetically to the emergence of the new internet shopping paradigm. Yes most have a website that will sell you their product, but none are market leaders in that, and mostly they are just windows for their physical stores. There’s some interesting innovations: Next Homeware is nice and expands their high street clothe shop to new markets; John Lewis using Waitrose stores as delivery drop off points so you don’t have to be in for home delivery is a good idea. But on the whole the internet is has been over run by new comers. Newcomers like Amazon, Play.com, Dabs.com…etc have emerged seemingly from nowhere and within a decade killed off their far bigger, far more experienced, far older rivals.

How have the chains allowed this to happen? I can’t answer but it points to a shocking lack of understanding to their core industries and sticking to their, increasingly outdated, one-view-of-their-business-model. This has slowly sounded the death kneel for more and more high street chains. They were the leaders of their businesses and they were caught napping. Only Supermarkets with their online ordering and delivery have managed to stave off any young upstarts coming in. Ocado was successful in muscling in there but they were quickly linked in a supply deal with Waitrose so that now most people think they are the same company. It’s truly shocking that the other bricks and mortar stores are now also-rans in the their businesses areas online.

So, anyway, what’s the become of the High Street? Hate the chains all you want but surely they are better than boarded up shop fronts or being replaced by another pay day loan or Cash Converters? Well I don’t see the high street dying out completely. People still like to window shop, touch and feel stuff and they will pay a premium for this. Whether this premium is enough to offset the cost of a high street shop remains to be seen. Perhaps bricks and mortar shops will move to out of town malls and outlet stores and the high street will end. Perhaps that’s a good thing and we can reclaim the city centres, with all the sights they have, for better uses than just shopping, but somehow I think the high street will be around for a while – even if it’s in a reduced form. I see two different futures for the high street, both of which I think will bring positives.

The first scenario is that, since the chains have so failed to launch credible internet sides to their businesses, the internet retailers step up the battle and bring the fight to the high street. Apple has shown the value of having a physical presence to sell it’s products and provide services. As it has few shackles to the past, Apple has done something different here: it’s stores provide amazing customer service (even if you didn’t buy direct from Apple!), they have oddles of keen enthusiastic staff who know their stuff and Apple are seen to be cool and let you play with their products. Oh yeah, almost as an aside, they sell their products as well if you want. Due to the large markup Apple has on it’s products, they are profitable despite concentrating on those other seemingly unprofitable activities. Can other online retailers learn from this? Sure their model is based on not have the limitations or overheads of a high street store but what if they used them to enhance their brands – like Apple have done? What if Amazon bought the remains of HMV and slowly replaced them with Amazon shops (initially as an instore section of HMV or a joint venture before eventually removing the old HMV brand)? This could offer delivery pickups similar to the John Lewis/Waitrose service mentioned above (replacing the underused Amazon Lockers). They could offer improved customer service ( a traditional weak spot of Amazon). They could even have a net cafe-style bank of computers to allow people to shop, along with some popular products (top 10 CDs, Kindles..etc) in store for immediate pickup. The shop could have regular sales if they over ordered. Or perhaps special guests (authors signing books, bands playing their latest releases like HMV/Virgin used to do). Make them clean cut and cool places to hang out and they could even be run at a lose, as part of a marketing budget, as their main aim is to enhance the brand and drive traffic and profit to the online store. Amazon even has form here selling it’s Kindle hardware below cost and making profit from eBooks. In some ways this would be like taking the chains and turning it up to 11 so I’m sure I, and others, would grow to hate them as much, but it could be interesting in the short term and bring much needed new ideas and innovation to the high street.

The second scenario, and I’ll admit this is less likely, is that the independents make a resurgence. Independents traditionally deliver a better customer service and advice – because they have to to differentiate themselves from the cheaper chains – and people are willing to pay for this. Sure for the stuff we don’t need other’s advice for (music, books…etc) or generic stuff (lightbulbs, groceries…etc.) we go to the cheaper online shops but for the specialist stuff (camera’s, computers) or for clothes and shoes, where you want to “shop” rather than buy, you will still find shops to cater to you. With the removal of the mainstream products and generic products that the chains specialise in, there will be more space and less demand on high streets which will reduce retail rentals and allow smaller firms to afford to come back to prime locations.

I may be a little idealistic here but it’s possible the fall of the chains leads to the rebirth of the high street instead of the death. We can but hope…

(Edit March 2013)
Some interesting further articles on this subject:

http://kamiongames.com/2013/01/15/internet-high-street-co-existing/

http://blog.mailbigfile.com/hot-topics/death-of-the-high-street-in-the-digital-age-is-over-exaggerated/

http://news.cnet.com/8301-1023_3-57569710-93/report-google-to-open-u.s-retail-stores-later-this-year/

http://www.forbes.com/sites/roberthof/2013/02/16/a-google-retail-store-why-its-not-as-crazy-as-it-sounds/

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