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One of our Mill Street neighbours, WS Records, has closed its doors for the final time after 10 years of trading.
Owner Paul Willsher said, “It made sense for me to close because 85 per cent of my sales are online.” He told the Bedfordshire on Sunday earlier this year that:
“Unless something is done soon, Bedford will be heading for disaster. With no action, eventually all shops that sell goods that can be purchased online will have to close down.”
His view is echoed by Queen of Shops Mary Portas, who claimed in The Portas Review that the internet is “One of the key threats to retail on our High Streets.”
So let’s look at the ‘digital threat’; The British Retail Consortium found that internet retail sales equalled £29 billion in 2012. However, those sales only accounted for 9% of all retail sales.
That’s less than 10% of all retail sales. Perhaps Portas feels easily threatened.
Far be it from me to disagree with The Queen, but framing digital as the enemy isn’t helpful or even true. Consumers don’t use either the high street or digital. They use both and often at different stages of a single transaction.
A survey by Econsultancy found that 44% of UK consumers always research purchases online before actually buying in store. A further 52% sometimes check online before buying in store. Only 4% of UK consumers say they never do online research to inform their offline purchases.
This suggests that rather than being a threat, digital is a pathway to your store. If you don’t have a good digital presence that allows customers to research your brand, your customers will simply go to someone that does.
Seeing digital as the enemy encourages business to adopt the same attitude as Willsher; resisting it and then reluctantly embracing it when all else fails.
HMV adopted a similar attitude, which is why we now have play.com. Andrew Villars, founder of retail specialists Arrowhead Consulting said of HMV’s decline:
“It’s amazing to me that play.com were ever allowed to enter the equation at all. So why didn’t HMV take that space? That space was available for them, when you consider the brand loyalty and market share they had offline.”
In early 2012, independent local retailer, Clued Up, closed its doors and advising it was headed online. Just over a year later they have no online presence to speak of and a Chip Shop is soon to occupy their vacant premises.
If digital is your last hope, then it is already too late. By then, you will have already exhausted any brand equity your real world presence has built up – evident by the lack of customers to your store. Those customers will now be building up a loyalty to retailers that did embrace online.
There is no denying that digital has changed the way we shop, but many High Street stores are victims of their failure to adapt to digital rather than digital itself. There is still a demand to be able to physically see and touch something before you buy it. In fact, digital retailers etsy, eBay and Net-A-Porter are all trialling real world presences with showrooms and pop up shops. Online homewares store Made.com now has a showroom in central London. Oak Furniture Land, which started life as eBay retailer, now has 36 real world outlets after opening its first showroom in 2009.
Oak Furniture Land’s owner Jason Bannister said of the showroom:
“It wasn’t even a real shop but after a few weeks it was turning over the equivalent of £5m a year…At first we thought it would be £5m taken from the website. But the online business was still going up so we opened a proper shop in Cheltenham.”
Screwfix is a key example of the still-present demand for real world presences. The company started life as a catalogue retailer. They trialled their first store in 2005. Today, they have 300 stores.
Andrew Livingstone CEO of Kingfisher, Screwfix’s parent company said:
“We had tradesmen turning up at our main warehouse in Somerset asking for things that day – our next-day delivery service was not soon enough.”
Both Oak Furniture Land and Screwfix saw there was a demand for a real world presence and created it. It appears many local shops are creating the real world presence and then demanding the custom. Just recently ShopLocally.com, an online business network, posted the following to their Facebook page:
“Who are the businesses in your neighbourhood? Who would you miss? Support them today. If you don’t use them, you will lose them. Make the effort. Shop Locally!”
While the sentiment is noble, no one has the right to custom by virtue of being local. Pleading with and chastising consumers is not a long term strategy to save the High Street. Consumers don’t owe their local shops anything.
Instead of making appeals to consumers, local shops need to start trying to be more appeal-ing. A digital presence is a massive part of this.
Andy Harding, Executive Director, Multi Channel at House of Fraser had these recommendations for retailers:
“If I was a small offline retailer on a budget, I’d start by building a tight website with the store’s products and ranges and preferably with some transactional capability which can be fulfilled from the store itself.
“Ensure that the website has a really good store locator and that all the content can be accessed on a mobile. Then add a small paid search budget across some long tail terms and keep reinvesting any profits into growing the online range. Then as soon as the budget will allow – add in the capability to order from the website in the store.”
For Harding, digital isn’t an optional extra or something nice to have for small businesses – it needs to be at the core of the business strategy.
While local business initiatives do a fantastic job, the focus should not be on rallying against digital. Nor should it be on telling customers off for not shopping locally with a ‘use it or lose it’ warning. More needs to be done to educate retailers about the benefits of digital. It’s shops, not consumers that need to ‘use it or lose it’ – use digital or lose your business and gain a hobby; that is what you call something you do for the love of it, isn’t it?