Last March a grim report from Deloitte, the consulting firm, predicted that four out of 10 high street shops would go bust in the next five years. Cynics could be forgiven for wondering if it will take that long. Last year we lost JJB Sports, Clinton Cards and Comet, among others. This year we’ve already seen Jessops, Blockbuster and HMV fall by the wayside. A bad time to work in retail, it seems; a good time to retrain as an administrator.
An analysis of British shopping trends gives more than a strong hint as to why the high street is under so much pressure. According to a report published last February, Britain is the biggest online shopping nation in the developed world, with almost two-thirds of adults using the internet to buy products such as food, clothing, music or holidays. This is twice the average of the other 34 countries, which include Germany, France and the United States (although if our petrol was as cheap – and our malls as big – as America’s, we too might be tempted away from our laptops).
This trend shows no sign of abating. In 2012, £78 billion was spent at online retailers, a fifth of all retail sales. According to a forecast by IMRG, a body which represents the UK’s online retailers, this will rise to £87 billion this year. Last year saw a 304 per cent increase in sales from mobile devices, with a staggering 80 per cent of smartphone and tablet owners unable to resist fiddling with their device while watching television. Even Christmas Day isn’t safe: Amazon has seen a 263 per cent increase in sales over the last five years. And by Boxing Day we seem to have given up altogether on talking to our families: 14 million hours were spent trawling retail websites on 26th December last year.
Take away all this online activity and you get a much clearer picture of the retail sector. Store sales fell over Christmas – the first time since 2008. Overall, sales were up by just 0.3 per cent in December, thanks to online sales jumping 17.8 per cent.
The high street stores which performed well overall owe most of their success to their online sales. House of Fraser: festive sales up 6.3 per cent; online sales up nearly 50 per cent. New Look up 3.4 per cent; online more than 50 per cent. Debenhams: sales up 2.9 per cent; online sales up 39 per cent. Internet sales now account for 25 per cent of John Lewis’s ever-expanding core business: providing weddings lists for young couples, scarfs for snowmen and work for creative agencies.
There are, of course, some exceptions to this rule. Online fashion store Asos might have recorded a festive increase of 34 per cent compared to last year, and yet Primark, which has no online offering, also saw a 25 per cent growth over the same period. Nothing, it seems, beats the real-life joy of elbowing through a crowd of Spanish exchange students at Marble Arch to pick up a pair of jeans for under £10.
Sources
www.guardian.co.uk/business/2013/jan/17/winners-emerge-high-street-wreckage
www.bbc.co.uk/news/business-13977255
www.mirror.co.uk/money/city-news/high-street-winners-and-losers-in-the-christmas-1542494
www.telegraph.co.uk/news/uknews/9054400/Britons-are-biggest-online-shoppers-in-developed-world.html
econsultancy.com/uk/blog/61886-24-of-uk-consumers-used-mobile-for-christmas-shopping-report
www.ibtimes.co.uk/articles/425063/20130117/imrg-capgemini-eretail-sales-index-online-shopping.htm
www.dailymail.co.uk/news/article-2253686/Boxing-Day-cyber-sales-break-records-busiest-UK-online-shopping-day-113MILLION-visits.html
www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9010740/Festive-cheer-for-New-Look-after-challenging-year.html
www.guardian.co.uk/business/2012/mar/20/high-street-shops-close-deloitte
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Jono Hey
Jono has been responsible for designing and building Nutmeg since it was a PowerPoint deck, and is one of the few Head of UXs to have a PhD. Formerly from the world of physical product design and engineering he spent most of his career switching from making something well to making sure he's making the right thing in the first place. His professional and academic career before Nutmeg includes 7 seven years in the San Francisco Bay Area with Berkeley and Stanford Universities researching and teaching product design, and working at a leading design and strategy consulting firm.Other posts by Jono Hey