Already in 2018, we have seen the decline of many major retail companies, such as Toys R Us, New Look, House of Fraser, and most recently, Waitrose. Each of these retailers has, or is planning, to close a number of branches across the country in an effort to claw back profits. Although it looks negative for the retail sector, the ongoing closures could be a call for high street stores to fight back and change their sales tactics.
There are countless factors that contribute to the number of retail closures across the UK. This includes increasing rent costs, failure to meet profit margins, drops in sales figures and more. It isn’t helped by the rise in online shopping and changing consumer behaviour. Both of these points have proven to cause issues for companies’ in-store presence, as they are either struggle to meet new customer demands or can’t compete with digital shops.
For those who work irregular hours, a weekly food shop can be done on your smartphone and delivered straight to your doorstep that same day. Because of its convenience, it’s no surprise that online shopping figures have been soaring. Internet sales grew by 19.9% in May this year when compared with May 2017. It doesn’t end at grocery shopping though – online fashion giants also dominate the market. For example, ASOS recently reported a huge UK growth of 22% from August last year to February, which translates to around £414.5m in profit.
The blame doesn’t lie solely with online stores, as consumer shopping habits are constantly changing. The luxury of being able to buy whatever you want, without moving from your home, has proven hard to compete with. For example, fast fashion business H&M expects its online sales to rise by 20% each year until 2022, while it saw its store shares drop by 6% at the beginning of this year.
To up their game, high street stores should play to their advantage of being a face-to-face contact point, something that online is missing. Being able to speak to a physical human being can make your shopping much more pleasant, as it adds a social dimension to the whole encounter.
Although it will be sad to see some of our much-loved high street shops reduced to empty units, it could pave the way for existing businesses to learn from their mistakes and better themselves. The closures may also pave the way for upcoming companies to bring something new to the retail sector.