Three things that could save the High Street
1 January 2019
The retail sector took a battering in 2018. Some 40,000 jobs have been lost or are at risk. Household names like House of Fraser, New Look and Marks & Spencer have been forced to close stores and take a long look at how they do business. A profit warning from Asos , the online fashion firm, in December suggested that even the internet might not be retail's panacea. So, is the industry on life support? Or is there something more fundamental happening? And is technology part of a shift that could ensure the future of the High Street? BBC 5 Live's Wake Up to Money team has been looking at the key technology trends that could ensure the future of retail. Many of us will have unwrapped a smart speaker this Christmas but few will have thought about its value as a shopping tool. "I think the day (most people) make purchases on it will be the day they don't look back" says Jon Copestake who has been researching the future of shopping for EY, the accountancy firm. But he thinks artificial intelligence (AI) will be a double-edged sword for the High Street. "I think that consumers will become much more time-poor and they are going to rely much more on algorithms or AI to actually pre-empt their shopping needs, that will free up time for them to focus on shopping with the brands and products that really engage them," he says. "There will always be a place for consumers to go to shops, to experience things, but I think those things are going to be things that they care about." This year will be remembered as one full of scandals involving our personal data. However, experts think that data holds the key to the future of shopping. Thread, the online personal shopping platform, uses customer information to help men, especially those with a fear of fashion. The company launched six years ago as a purely online operation but Terry Betts, its head of business development, thinks Thread's ethos could work equally well on the High Street. "I think what you've got to give back is something that is infinitely better than just walking into a regular store," he says. "I guess essentially what we are building is a store where everything is in your size and your budget and we know you. We remember what you've bought and so we are only making suggestions based on what you tell us." Mr Betts adds: "I think expectations are high right now. You just have to deliver something that's superior and that's where the loyalty comes." There may have been a bit of backlash around fraudulent influencer accounts but micro-influencers in particular are still hitting a sweet spot with key audiences. That kind of personal recommendation has seen millions of pounds of advertising revenue shifted online and for one brand it's meant the resurgence of the Avon Lady. Louise Scott, Avon's chief scientific adviser (pictured), says: "We have six million micro influencers around the world who are all about authentically recommending products, whether it be through social media or it be face-to-face." A key part of Avon's turnaround plan, under chief executive Jan Zijderveld, is to make better use of different technology platforms, allowing the company to be more agile. Ms Scott says: "I believe trends today are moving at a speed of light. My challenge as a creator of products is really all about recognising that a product, to be Instagram worthy, actually has to look beautiful as well as work." Wake Up To Money asked shoppers in Leeds about the future of retail. Most told the programme that they believed the internet will take over from our High Streets as the main way we shop in the future. But some experts disagree. The High Street isn't dead, says Samantha Dover, senior retail analyst at Mintel. "It's the value, the brand awareness that having a physical store presence has that is really important to recognise." She says the best performing retailers recognise that online and physical shopping are intrinsically linked as consumers compare prices and research products or use click and collect services. Retailers will have to change though, says Mr Betts . "I think you're going to see retail as tastemakers. More local, more targeted and recommendation based." You can listen to Wake Up To Money's Future of Shopping Special here.
Wake Up To Money asked shoppers in Leeds about the future of retail. Most told the programme that they believed the internet will take over from our High Streets as the main way we shop in the future. But some experts disagree. The High Street isn't dead, says Samantha Dover, senior retail analyst at Mintel. "It's the value, the brand awareness that having a physical store presence has that is really important to recognise." She says the best performing retailers recognise that online and physical shopping are intrinsically linked as consumers compare prices and research products or use click and collect services. Retailers will have to change though, says Mr Betts . "I think you're going to see retail as tastemakers. More local, more targeted and recommendation based." You can listen to Wake Up To Money's Future of Shopping Special here.
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Clicks trump bricks?