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Death of the High Street!

It seems like almost every week there is another brand cutting jobs and closing stores around the UK and no doubt other countries are being affected too.

 

The latest names on the British high street hit list in addition to Toys R Us and Maplin who went into administration in February, New Look last week announced the closure of 60 stores and almost 1,000 jobs cuts, with other chains such as Moss Bros, CarpetRight, Next and Mothercare, likely to follow suit!

 

It’s doesn’t paint a pretty picture of what the high-street may look like in the next 10 years, with increasing rents, taxes, inflation and Brexit all playing a role in the demise of physical retail stores.

 

The House of Commons Briefing Paper on the Retail Industry: Statistics and Policy 21st March 2018 states that;

 

In 2017, the retail sector as a whole contributed £194 billion to UK economic output (11% of the total), measured by Gross Value Added or GVA3; this was an increase from £190 billion in 2016. 4 In 2016, the sector employed 4.9 million people (20.5% of the UK total) and contained 374,000 businesses (15.5% of the UK total).

 

The retail landscape has been changing rapidly since the massive growth of the online retail giant Amazon. That along with other ecommerce providers such as Wix, WooCommerce and Shopify to name just a few, providing anyone who is anyone access to start up their own digital enterprise selling…well pretty much anything at a very low entry cost.

 

Add to this the massive increase in online marketing gurus selling their expertise on the myriad of ways to make money online and you can see why trouble is afoot for high street footfall!

 

Can We Save Our High Street?

 

Change through innovation is inevitable. We live our lives at such break-neck speed nowadays, it’s no wonder the tech industry is booming. According to TechNation/TechCity UK, in 2015 the turnover of UK digital tech was estimated at £170bn, a growth rate of 22% (£30 billion) in just five years.

 

Whilst all high-street brands do have an online presence, competing with the other ecommerce stores who are giving much bigger discounts is obviously proving to be unsustainable.

 

Self service in supermarkets and banks are becoming much more commonplace. Restaurants chains are benefiting from the home delivery revolution created by Deliveroo, Uber Eats, Hungry House, Just Eat, along with brands like Hello Fresh, Potage, Gousto and more. Even our pets are getting in on the act with ‘designer’ food delivery services from Pets.com and more!

 

Whether we like it or not, our high street is changing and our desire for ease of access to everything from the comfort of our homes is increasing. In addition, we have a new millennial generation with who technology is the natural and normal way to live. They will be the ones directing how the world changes in the future, so in essence, we are in their hands and therefore, so is the survival of the high street as we know it.

 

The Back to the Future Effect!

 

Artificial intelligence and digital automation are the growth sectors of this century and whilst we may not be ready for flying cars just yet, the Back to the Future effect is definitely starting to take hold, with driverless cars and eventually trucks too, already ready to be rolled out.

 

A recent tweet from Precision Homes, shows a video from the World Economic Forum, stating that there is a 50% chance AI will outperform humans in 45 years time, and a 5% chance of all jobs being automated in 120 years!

 

When you search online for media articles on AI, the tech experts and pessimists will give you a varying picture over whether they think we humans are going to become defunct or not in the workplace! From my personal perspective, I know that when it comes to professional services such as seeing a doctor, I wouldn’t feel comfortable talking to a robot!

 

There are times when I want to go out and actually see and feel the tangible effects of what I’m looking to buy, which you can’t necessarily experience online. Human fallibility and emotion are something I can and want to have an affinity with, especially when it comes to understanding and empathising with my needs and wants.

 

I think many of us feel the same way and this is something that regardless of how intelligent and ‘emotional’ they think robots or automation can be, we instinctively know they are not human and nothing can change that.

 

Innovate or Die 

 

There is the argument, that this is all inevitable and we don’t have choice but to accept the development of life as we know it now. Every business has to innovate and evolve if they want to survive, that is nothing new, it’s the speed and the financial as well as human cost of that evolution that we may struggle to get our heads around.

 

High street brands really need to look at how they can provide the best of both worlds with their proposition. Does that mean a change in how they communicate their USP? Does it mean integration of technology with the benefits of the tangible in person experience. Or does it mean working with central government and local authorities to help businesses be more competitive with online enterprises? Possibly all of the above.

 

Whatever the case, the British high street is an institution that we want to preserve for as long as possible, whilst still benefiting from the development of technology that is deemed to cut costs and make our lives that little bit easier to manage.

 

Tags: marketing, financial marketing

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