Thursday, December 22, 2011

The Warehouse High Street

Sometime ago in this blog I predicted the end of the high street - Woe, woe & thrice woe! In that post I wrote,
Soon the bricks and mortar shop will double up as a warehouse for the online shop(s) as internet sales see a decisive shift to predominance. The high street is where the window shopping will occur while the transaction is done online. ... Their physical shops are now provisioning hubs for their online outlets, busy with actual shoppers only one or two days a week.

This is now an emerging trend, with retailers offering "Click & Collect" points within existing stores, and some "thin" shops opening, where the shop is little more than a display window, and staff act as "consultants". The shop is effectively little more than a "click and collect" warehouse.

The high street has been caught in the middle of a number of trends and policies that discriminated against traditional high street retailers. Planning policy, almost non existent regulatory controls on anti-competitive trading practices, & economies of scale favours the out of town hypermarkets, parking charges and congestion further undermine the town centre, while high rates discriminate against the small, "boutique" offerings that might make the high street an interesting "shopping destination". Most high street and town centre mall offerings are sterile, uniform experiences that are less and less appealing to consumers.

One high street retailer that has done something interesting and successful is Apple. Their stores appear overrun with enthusiastic staff, who seem to be incentivised to help customers as well as sell stuff. Nor do they discriminate against customers who have bought an Apple product online or even second hand - once you own one of their products, you become part of the Apple "family". I recently took an iPhone I'd bought off eBay into an Apple store & a member of staff spent an hour resolving an issue I had - that's customer service normally restricted to in-store purchases (if you're lucky).

It might be this kind of approach to retailing that helps to save the smaller type of high street retailer. The move to online "click and collect" is sold as customer convenience but its really about reducing costs via cutting stock and staff levels. The loss of customer service that this will entail is where the smaller retailers may be able to offer an "experience" advantage to their customers - that's if there's a high street left after this recession is over.

UPDATE: Recent report on New Look says that 25% of their online sales are "Click & Collect", while they plan to reduce their shop portfolio by approximately 100 stores.