The rise of online only retailers
Last year we discussed whether lockdown online shoppers ever return to the high street. As time goes on this is looking more and more unlikely. Over the last 12 months we’ve seen many brands gradually disappear from the high street. More recently we’ve had the big blow of Debenhams and Topshop, both staples of most high streets across the country, now only trading online.
The shift to online only
Some of our much loved high street brands have been saved. ASOS have bought out Topshop, Miss Selfridge, HIIT and Topman, which was a natural fit for the online retailer. They already know and understand their demographic very well and have been selling their products for a number of years.
— ASOS (@ASOS) February 1, 2021
More recently Boohoo have snapped up Debenhams, Wallis, Burton and Dorthy Perkins, as well as Coast and Karen Millen. Debenhams Two huge online retailers growing their online real estate even further.
All of these retailers will no longer have any physical stores. Was this really a shock? This move by ASOS and Boohoo was to be expected by both digital-first companies with their expertise and success to date being online only.
Both brands are challenging the status quo and are paving the way for the future of retail. This shift to online by iconic british brands represents a key change in the fashion industry. With less overheads and the change in consumer behaviours, the move to online only is likely to increase over the coming years.
The decline of the High Street
There has been quite an uproar of these brands converting to online only. However isn’t it better that these brands are saved rather than gone completely? It’s certainly sad to see brands leave the high street and no doubt has a big impact on unemployment but before the pandemic hit, the high street was already on the decline.
In 2017 a report by ParcelHero stated that unless retailers developed an omnichannel approach the high street would reach a dead-end by 2030. The pandemic has only sped this up. One in eight of the UK’s shops now lies empty according to property girl Savills. Consumer behaviours have changed and along with the high costs of brick and mortar stores, the future of online shopping is only set to grow.
Ecommerce grew by 46% in 2020 – its strongest growth since 2008.
If this pandemic has taught us anything it’s that businesses really need to be taking a digital first approach.
What does the future look like for the high street?
ASOS aren’t ruling out keeping Topshop’s flagship store on Oxford Street, although nothing has yet to be confirmed. Will we see the pop of select few stores or flagship stores only whilst brands focus their efforts online? Cath Kidston took the approach to re-open their Piccadilly store in London to provide their customers with experiences such as gifting and crafting events.
We may see the rise of hospitality take over the empty retail space after this pandemic. We may also see the rise in independent retailers who now have more of an opportunity on the high street with less bigger competition. Who knows what’s in store for the high street, but it will likely look very different to what we’re used to.
Retailers investing online
Brands who invest in the online experience and eCommerce will likely reap the rewards. A reason for the decline of many of the high street retailers was due to not keeping up with the digital age. They didn’t invest enough into the transition online and therefore struggled to keep up.
Zara owners, Inditex last year stated they would spend €900m a year for the next three years on big, centralised stores and its online platform.They were already working towards improving their online capabilities but lockdown created a new urgency. A key success for them has been managing their stock levels.
Cath Kidston’s transformation plan has put a huge emphasis on digital, with eCommerce now accounting for 85% of their business. Their turnaround plan focuses on being a digital-first retailer. As part of this process they have invested in their digital infrastructure and stopped looking at marketing channels in isolation. They have focused more on data and technology to deliver a seamless customer journey and experience.
The changing consumer behaviours catalysed by the pandemic has provided brands with a great opportunity to innovate and enhance the customer experience. From virtual stores to virtual try-on tools, brands are upping their game by bringing physical experiences to online. Both of these examples have played a key role in the beauty industry, where customers can’t try on at home and return. To help solve this problem, M.A.C have launched a virtual try-on where you can find your perfect foundation shade before purchasing. Not only does this add to the customer’s experience it also builds trust.
We’ve said it before and we’ll say it again – now it’s more important than ever to invest in eCommerce.