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While online retailers such as Amazon go from strength to strength, a damning new report in the UK has stated the high street is facing a crisis – in towns and cities, 1 in 7 high street locations lie empty.

Is the report justified? Are online retailers like Amazon responsible for this, and why? What can revitalise the high-street?

Is it that bad?

First off, referring to it as a ‘crisis’ is perhaps a little dramatic and mostly just a headline grabber. Even Amazon admits that it needs brick and mortar stores to drive sales for devices like it’s new Kindle Fire New Amazon Tablet Now Available Along With Three New Kindles [News] New Amazon Tablet Now Available Along With Three New Kindles [News] Amazon has finally launched their much awaited tablet – Kindle Fire. The new lean mean machine is basically a 7-inch Android tablet for only $199, on which you can do anything you would be able... Read More . Though many will be sold online, the majority of consumers will heading out to the shops to get a little hands-on time when deciding on a tablet purchase this Christmas – and that’s where Amazon needs to reel them in.

Though we don’t have the new Fire in the UK yet, the Kindle line has a strong presence even in supermarket retailers such as Tesco – alongside the iPad – while other tablet devices remain noticeably absent.

We also need to bear in mind that a large proportion of the population is still very far from what most of us would define as “tech savvy”, and many remain distrustful of online retailers in general. There is simply too large of a “digital divide” for the high street to be in that much trouble in the foreseeable future.

If my own purchasing habits can be considered a good indicator though, I can tell you now that I’ve placed an average of three orders a month with Amazon, whilst only visiting the high street only once a month. My spend on Amazon is 100 times what I’ve spent on the high street. So why is Amazon winning out – for me at least?

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Cost

It’s fair to say that in the majority of cases Amazon has a product for cheaper. The Amazon app makes it ridiculously easy to do a price check while looking at a physical product, allowing you to quickly compare and add it straight to your online basket. They’ve even gone so far as to undercut high street retailers by offering a discount if you walk into a high street store and scan an item, then purchase through Amazon instead. While most of us will agree this is pretty despicable business practice, I’m sure we secretly all appreciate the savings – especially at this time of year.

Service

I hate to say it England, but I’m sick of the level of service – is this really the best you can do? The typical attitude of retail staff seems to be “for god’s sake, why are you buying this? Just hurry up and bugger off so I can get back to sitting here”. If you want to know how to do good service, go to Japan. They even bow to you. And yes, I have worked in retail before – over the Christmas period no less – so don’t think I don’t know how crappy it can be.

Excuse me if I don’t feel the need to put myself through that. Amazon has always been polite to me, and even makes suggestions for other things I might like. Service – as one of the few things physical retail stores should be able to one-up an internet site – is miserably pathetic for the most part.

Convenience

Parking charges, crowds, queuing – it all adds up to an inconvenient day out. If I can buy the same item online – saving money and time – that’s more time I can spend at home, with my family, enjoying the rest of my life.

The Solution?

The one thing that online retailers cannot offer is an experience, yet most high street retailers are failing miserably there too. One example of a technology retailer that got this spot on is Apple – whose retail stores continue to outshine any others in terms of revenue per square meter. Why is that? Well, not only are the Apple stores a thing of physical beauty – awe inspiring architectural structures – but they also play host to the genius bar, as well as tutorial sessions and events focused around the creative ethos. In short, they create an experience – not just a sale.

Personally, I think the solution is not to try simply try and restore the status quo of the traditional high street filled with retailers, but instead to turn the high street into a more social gathering. That’s something which online retailers simply cannot offer.

As an example from the 8 years I spent living in Kyoto, the biggest thing that drew me into town was not the shopping, but the entertainment centers. A popular high street destination there is called Round One, and for want of a better word – it’s a play center for adults open 24 hours a day. Paying by the hour – the multi-storey building are filled with arcade amusements, billiards, karaoke, bowling, even outdoor sports on the roof – all free play once you’ve paid your entrance fee.

These places make the center of town… a destination rather than a simple shopping trip. Markets and places of historical or cultural interest could do the same job, yet we continue to see the high street as primarily a retail location.

In conclusion, Amazon have played some pretty underhanded tactics to deliberately undercut high street stores, but in these times of cutbacks more than ever I appreciate any savings. I doubt retail shops will ever completely die out, just as books won’t be replaced by eBooks either – yet is certainly a disturbing trend. More high street retailers are disappearing, and online spending continues to grow – that part is no lie. As the next generation of consumers grow up in a world where online transactions are no longer feared – the digital divide will be broken down further. One thing is for certain – the high street in 10 years time will look quite different to how it is today.

How about you? Do you do most of your shopping online? What do you think the high street can offer that Amazon doesn’t? Are US high streets facing the same ‘crisis’ as the UK? Let us know in the comments!

  1. Alan Dee
    December 26, 2011 at 6:07 pm

    I agree with everything said in this article. I spend almost no money at a retail store and why? It's cheaper and quicker. If I'm planning ahead I can wait for the item to arrive, which is not difficult since holidays and birthdays are somewhat predictable.

    Another contributing factor in the states is sales tax. When I buy something online I don't have to pay any sales tax but if I buy it locally I do. The reason is that Amazon isn't located within my states so they don't have to charge sales tax. That difference often covers shipping cost.

    However, it is true that retail stores will not go away. There are always products that are best sold in stores, clothing for example. As for Amazons "underhanded" tactics, life has never been fair, for anyone or anything. It's an evolution of product sales. Survival of the fittest.

    So if your a retail store wondering how you can compete. You can't compete in price with online stores. What you can do is, as this article indicates, create an atmosphere such that your customer base will go there because they enjoy it. Because the staff are very knowledgeable and helpful.

    • James Bruce
      December 27, 2011 at 11:52 am

      I wonder how long the sales tax exception will work though - I'm sure many states will start taxing online transactions soon. 

      Do you see clothing as always being sold in-store though? I think I'm buying some of it online, though certainly clothing was one of the only reasons I visited the high street this year.  I know I'd rather buy lingerie for my wife online, anyway!

  2. Cell Travis
    December 26, 2011 at 6:57 am

    I think it all comes down to how well high street reinvents itself to meet the inevitable shift to digital purchases. The choice of shopping medium is driven by its effectiveness and honesty in reaching end users, and the choices it offers in the process. Lesser overheads in digital commerce means the savings can be passed on to consumers. And at the end of the day, that is "one" of the things that matters.

  3. Scutterman
    December 25, 2011 at 11:51 pm

    The high streets are in trouble, but they have been for longer than e-commerce has been around. When supermarkets first arrived on the scene many high street services disappeared completely. Again, it was cost and convenience that brought it about.

    • James Bruce
      December 27, 2011 at 11:50 am

      True that. A lot of supermarkets moved onto the high street though, which at least helped to keep the whole concept of the high street alive rather than simply moving them to out of town shopping centres though. 

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