Interviews, insight & analysis on digital media & marketing

Decline and fall? The impact of digital on the UK high street

By Joe Ford, Head of SEO at Organic

It’s by no means news that the UK high street is struggling. We’ve been watching its steady decline for some time now, as footfall has faltered, and numerous long-established brands have entered administration. But COVID-19 has brought a brand-new dimension to the high street’s troubles. The challenge is ramping up, and the impact of digital on the retail landscape has intensified.

First, some scene-setting. How were things looking on the pre-pandemic high street? Toys R Us, New Look and Maplin all went into administration in 2018, while 2019 told a similar story for other big-name brands such as Jack Wills and Mothercare.

All in all, it was pretty bleak. High business rates, squeezed incomes, and an increasing inclination for people to spend those incomes on experiences rather than material goods have all played a part in the plight of the UK high street.

However, recent years have also seen the ascendancy of online retail. Digital is king for today’s consumers and it’s this modern reality, more than anything else, that has contributed to the decline of many high street retailers.

Customers have welcomed the immense convenience, choice and competitive pricing brought to them by the world of online shopping, and with digital natives gaining greater spending power, the rise of ecommerce was set to continue. A 2019 report by law firm Womble Bond Dickinson and research consultancy Retail Economics indicates that online shopping will dominate by 2028, contributing to 53% of total retail sales. And this prediction was made before COVID-19 was even a consideration.

Coronavirus: an unexpected catalyst

The pandemic has created the conditions for ecommerce to thrive, while traditional high street retailers have been hit hard due to enforced store closures. We’ve seen even more consumers moving online as a result, with brands such as Amazon perfectly poised to benefit from this shift in consumer behaviour. Of course, it’s a shift that was already underway, but it’s been markedly accelerated by the effects of COVID-19.

And it’s likely that our shopping habits will permanently change, even as physical stores reopen, and we emerge from the other side of the pandemic. Many of us have come to appreciate the ease of ordering groceries and other essentials online and having them delivered straight to our doors. COVID-19 has also seen older people going digital, where previously there may have been resistant to new technologies.

Through necessity, a demographic which has traditionally helped to support the high street has moved online and learnt new ways to shop.

So, where will all this leave the UK high street? With multiple brands being forced to make thousands of job cuts as the government’s furlough scheme is scaled back, and with the lockdown enabling ecommerce to come into its own, it’s very easy to view the coronavirus crisis as the nail in the coffin for high street retailers. But it’s not necessarily that clear-cut.

Primark is the perfect example here. This brand made headlines for losing millions during the first month of lockdown because it had no online presence, but its reopening saw queues of eager customers ready to shop there. The demand was still there, but retailers must ensure that they’re present wherever their customers want to shop, research, or browse. Whilst this might work for a brand as large as Primark, relying on a single channel just isn’t a viable approach anymore.

The future is omni-channel

Just as ecommerce proved to be a lifeline for so many during the height of the pandemic, it could also help to save the high street too. That might seem like a strange statement, given that the advent of online shopping has contributed so considerably to the high street’s woes, but listen up – the future of retail is actually omni-channel.

Customer experience has never been more important, and today’s customers want the best of both worlds – online and offline. Consider Amazon as an example. In 2018, it became the second US publicly listed company to be valued at $1 trillion (Apple was the first).

The ecommerce giant is hugely successful, and yet it’s still seen the merits of investing in brick and mortar. Argos in the UK is another example, they do extraordinarily well by allowing customers to merge the on and offline experience with click and collect and available pick-up destinations in thousands of Argos and Sainsbury’s stores.

An online presence is crucial, but the demand for an in-store experience certainly remains. For high street retailers to survive, it’s about adopting an omni-channel approach that seamlessly integrates the digital with the physical.

Here are some key considerations for high street retailers to capitalise on this hybrid approach:

  1. Use data wisely – It’s not just ecommerce brands that can use data to their advantage. High street retailers should be using technology and sharing customer data across their channels to maximise opportunities for sales.

For example, online data might show increased demand for a certain product in a certain area, so it makes sense to increase stock availability in the relevant physical stores. And it works both ways: high street retailers can also use in-store purchase data to personalise a customer’s online experience.

  1. Ensure brand ownership – The convenience of ecommerce means that competitor brands are never more than a few clicks away. That’s why it’s so important for high street brands to know their space, know their competitors, and focus on their strengths.

High street retailers can tailor their online content to their consumers in order to demonstrate expertise and drive sales, and it’s precisely this approach that will enable them to stand their ground against ecommerce giants like Amazon too. When it comes to search engines, brands should focus on the terms where they offer expertise and provide content that isn’t easily replicated elsewhere. Consider home entertainment retailer Richer Sounds, which has positioned itself as a specialist which ranks for more technically savvy terms and thus differentiates itself from larger brands in the tech space.

  1. Collaborate – There are opportunities for traditional high street retailers to work with e-commerce businesses. Customers might make a purchase from an online-only brand, but they still appreciate the convenience of an in-store return or a click-and-collect option. That’s where a high street retailer can help and they, in turn, stand to benefit from the additional footfall.

Digital is going nowhere, and the impact it’s had on our high streets is undeniable. However, if traditional retailers can adapt, embrace technology and find new ways of working alongside ecommerce brands, then the UK high street is here to stay – it’s just likely to look a little different.