Retail can be seen as a game of two halves. Last year, spending through physical outlets grew by 0.2 per cent, whereas online retail spending grew by 13 per cent. But while the growth of online has put pressure on physical retailing, the situation is not all doom and gloom. Firstly, the decline of physical locations is not even. Strong retail centres, which offer leisure and social experiences, have prospered. Equally, while some shops are closing their doors, others – John Lewis is a prime example – continue to expand. So it is not fair to paint online retailers as the death knell for traditional shops. Indeed, online and high street are not necessarily separate and conflicting parts of retail. Rather, they are two sides of the same coin, as has been shown by the continued growth of click-and-collect style services. So the role of the store is changing, but traditional retailers are here to stay.
Neil Saunders is managing director at Conlumino.
What we’re seeing is retailers paying the price for failing to bring themselves up to speed in the digital age. The traditional model of retailing is on its way out and, for those who fail to adapt, the outlook is undoubtedly bleak. There’s a generational change going on. Young people are accustomed to buying things online – music, films, even clothes. For them, your standard high street store is often little more than a showroom. Go into a store and have a look around; then go home, log on, and find it cheaper. And for the rest of us – once you factor in the cost of parking in town centres and the cost of fuel to get there – it often makes more sense to do your shopping from home. There’s a huge migration online and it’s here to stay. There are some good performers out there: John Lewis and Next, for example, which have both been strong online for years. Marks & Spencer’s is falling behind, and there will be more Jessops to come.
Julie Palmer is a partner at Begbies Traynor.