The last decade has been terrible for the high street. It all started with Woolworths sending shock waves across the UK by shutting its doors in 2008. Since then, shop after shop have had to close their doors. Traditional retailing has been hit by a combination of factors ranging from the rise of e-commerce and competition to business rates and taxes to the move away from stuff and towards experiences.
Physical Retail has been dying for years. And lockdown has been an accelerant towards this trend. I know people who never previously shopped online being forced to do so for the first time over the last few months. The general consensus from them is the same – why didn’t I do this sooner. The fear for many high street retailers is that people through the lockdown have realised how convenient online shopping is and have changed their habits forever.
With the majority of people embracing online, I was super interested to see what was going to happen today. The day high street shops were finally able to open their doors.
Would people turn up to shops? Was the high street really dead. This morning, a friend of mine video called me from Westfield mall in Stratford. What I saw was astonishing. There were lines and lines of people waiting to get into shops. Some queues were so great that they stretched a 200m – 300m long.
This is was genuinely surprising to me. I thought new habits were being formed through the lockdown. Never did I think people would actually queue to get into a shop that is not essential. The human psyche continues to astonish me. I guess it has to do with the madness of crowds.
Are high street retailers even making money?
Normally queues are a good thing. It means that a shop is extremely popular. It means demand is there. It means sales sky rocketing. But in this case, I am not quite so sure. The formation of queues is just illusionary due to the restrictions on how many people can be in a shop at any given time. Retailers have in a sense become highly inefficient. Firstly, they’ve had to hire more labour. From the doorman to let people in to the extra staff needed to cope with covid regulations. This will certainly add to the costs of doing business.
Secondly, any item that has been picked up or examined by the customer will be removed from stock for 72 hours before it is back on the shelves. This will drive huge inefficiencies.
But the biggest problem of all is that of wasted time. With only a limited amount of people that could enter a shop on any given day, it will prove extremely costly for low margin retailers to continue to operate. I’ll give an example of a restaurant to illustrate. No restaurant will allow you to come in and just take up one of the tables without buying anything. The restaurant trade understands that time is money. They only have certain hours in the day they can operate and they need to make the most of it. They need to have a constant flow of people.
That is why at peak time they try and kick you out as fast as possible once you’ve eaten.
Retail doesn’t have that luxury. There is no way of distinguishing who is going to purchase an item and who isn’t. They have to let everyone in the door regardless of whether they’ve come to shop or to browse. And with the new normal of limited selling time, the retailers will have to bear the brunt of these inefficiencies.
With online shopping, why are people still queening?
I understand why people would queue to shop at Primark as the fast fashion retailer has no online presence. To get a Primark item, you need to physically visit the store.
But this is not the case with many other fashion retailers. What was particularly surprising was the fact that the the longest queues at the mall today belonged to Zara, Bershka, Apple and JD. All of these have an online presence – and good ones at that. So why the hell are people queuing to get into these shops when they can simply order the same stuff by the touch of a button in the comfort of their own homes?
I get that people shop in store because they like to try before they buy. But with changing rooms shut, this completely baffles me. Maybe the visitors to the various stores today are from the unbanked population; the people with no access to credit or debit cards. Maybe it is to do with the customer experience – I can certainly see why people would continue to visit Apple, Nike and Starbucks stores from this angle.
But on the whole this is rather surprising. Maybe the high street isn’t really dead. Maybe this is its rebirth. Maybe customers crave that retrial experience. Perhaps brick-and-mortar retailers are stepping up their game and offering experiences that people can’t get online or on their phone. If today showed us anything, it was that popular brands will remain popular.
May be, just may be, the high street does have a future.