Predictions of the death of the shop have become as much a ritual of New Year as fireworks and the singing of Auld Lang Syne. The two big retailers which have so far reported on their business over the Christmas period have provided the usual ammunition. Next reported sales up by 1.5 per cent in the 54 days to 24 December (compared with 2016), but only because online sales (which rose 13.6 per cent) offset sales in physical shops (which were down 6.1 per cent). Debenhams had a miserable Christmas, with like-for-like sales falling 2.6 per cent in the 17 weeks to 30 December. It is now thinking of shifting out some clothing racks and shoving gyms into its stores.
So is it the end of the shop as we know it, as online retailers gnash away at their business? I wouldn’t write off physical shops just yet. While there is a distinct shift away from paying for stuff in the store and carrying it out in a plastic bag, what no retailers really know for sure is how many of those online sales are dependent on consumers first be able to go and see, feel and sniff the goods in bricks and mortar stores. Last week I bought a dining table and chairs via the John Lewis website. Yet I would not have made that purchase had I not first gone into the shop to have a look. I could have made the purchase in the shop there and then, of course, but it made more sense to visit a few shops, compared the goods on offer and then go home, have a think, and order the goods online.
The trouble for the retailers is: how do they know whether we first took a peek at the goods in-store before we made the purchase online? If we have a store loyalty card and made other purchases in-store a few hours before we ordered goods online then they could connect the two pieces of information and conclude that we probably looked at the item we later bought online. But if we don’t buy anything, then unless they are secretly following us around via our mobile phone signals (which is technically possible, and can be done if consumers have signed up for the shopping centre’s nothing-is-really-free wifi) then they can’t really know to what extent their stores are being used as showrooms.
I suspect that shops will get smaller and that more peripheral stores will be closed, but it would be a brave High Street retail business that ‘did an Independent’ and concluded that it could safely go online only. There is also, of course, the small matter of the impulsive purchase. If a bird manages to defecate on your shirt on your way to the office you need a replacement shirt now – it is no use ordering online and waiting for it to arrive. Moreover, there is a limit to how many delivery vans a street can cope with. It is almost certain that more and more urban streets will be subject to timed delivery slots. Shops can work around that, but it is going to be harder for couriers delivering goods which have been ordered online.
This is why, even with the cash tills ringing a little less loudly each year, I would expect to see High Streets in 10 years’ time looking pretty much the same as they do now.