High streets are not what they once were. Previously they contained a wide variety of specialist shops and departments stores.
If you wanted anything more than a loaf of bread, you would have to head into your local town centre. This is now ancient history as high streets have had many of their shops replaced with cafes and coffee shops. They have become social places rather than hotspots of consumerism.
In contrast, online shopping has become an integrated part of our lives. As Gen Z comes of age and joins the workforce, this trend is likely to continue, as they will use their new purchasing power in the way they always have, online.
At the end of 2018 the High street retailer, Next, announced that between 28 October and 29 December sales had fallen in their high street stores by 9.2%, while online sales rose by 15.2%. This may be a harbinger of things to come but the bigger picture is more complicated. In late November 2018, Asos, the online fashion retailer had to issue a profit warning after unexpectedly poor sales. At the time commentators assumed this was because of a lack of confidence in the economy. However, when compared with Next’s announcement, it seems there is something else at play.
Both Asos and Next are fashion retailers, marketing their products to similar demographics. The big difference between them is that Asos is exclusively online whereas Next still has a presence in most high streets across the country. This physical presence acts as advertising but also gives customers confidence that if there are any issues, they can easily return purchases in store where they will get to speak to a customer service representative. Laith Khalaf, a senior analyst at Hargreaves Lansdown, also pointed out that over half of Next’s online orders were collected in stores.
Online retail is almost certainly the way forward, but that’s not to say e-commerce operators can be complacent. For those selling online, customer service and returns policy become increasingly important. When customers buy clothes online, they often will purchase them in different sizes and want to return the ones that don’t fit. Providing an excellent delivery service is also hugely important. Online retailers will have to solve the problem of delivering items at a time and location convenient for their customers. This will be the big challenge for e-commerce stores going forward, to provide prompt and convenient delivery.