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Monthly Archives: May 2013

One in five shops could close by 2018, warns study

From The BBC

The Centre for Retail Research (CRR) is warning that High Streets could see 20% of their shops close down within five years as more people turn to the internet for their shopping.

The organisation, which conducts research into retail, technology and crime, says this would equate to 62,000 shops closing down.

The CRR believes large areas of the UK’s High Streets would become housing.

It also says as many as 316,000 workers would lose their jobs.

The CRR says online shopping will continue to expand and the proportion of shopping done via the internet will double to 22%.

The report, which was produced by Prof Joshua Bamfield, said the first shops to go would be pharmacies and health and beauty stores.

Retailers specialising in music, books, cards, stationery and gifts will be next.

DIY shops will also suffer.

Overheads

In its report, the CRR compares the costs of opening a High Street store and an online warehouse.

It says opening a small store on a High Street in the Midlands would cost about £10,000 a month, whereas opening an equivalent space in a warehouse on the outskirts of a similar town would cost between £650 and £1,800 a month.

The director general of the British Retail Consortium, Helen Dickinson, said the country would have to get used to a very different look and feel on the High Streets of the future.

The CRR estimates that there are about 280,000 shops across the country. Closures on the scale predicted by the organisation would leave 220,000 by 2018.

It points out that 16 major retailers have gone into administration this year, with the loss of almost 15,000 jobs.

The latest official figures on retail spending from the Office for National Statistics (ONS) showed retail sales volumes in April were 0.5% higher than a year earlier, much less than expected, with consumers increasingly using the internet to do their shopping, rather than going out.

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Five Non-Obvious Things This Google Study Reveals About Smartphone Shopping

From FastCo.

Google’s recent report on smartphone shopping habits shows that, yes, people are pricing out goods on their iPhone. But what else are they doing with mobile devices in-store?
By: Kevin Purdy

Walk into any appliance store and you get it: People are using their phones to look up product details, scan reviews, and match prices. You know it’s common, and you know that “showrooming” is a tricky but omnipresent part of retail culture. So what else is new?

Google and its Shopper Marketing Council are out with a research study today, “Mobile In-Store Research: How in-store shoppers are using mobile devices,” which quantifies quite a few behaviors you already knew about. Customers desperately seeking store hours and phone numbers? You know it–as evidenced by an entire Tumblr about bad restaurant websites. And Google is always going to highlight the need for mobile sites and promotions. But there are also some surprising bits of data to ponder, gleaned from surveys of more than 1,500 self-professed smartphone shoppers. Here are a few of the more counterintuitive and future-facing findings in Google’s study.

The bigger the item, the more it’s smartphone scanned: At least among the 1,507 survey respondents in this study. Ninety-seven percent referred to their smartphone while browsing big buys, according to Google and its marketing partners. Those who were “frequent smartphone shoppers” spent 40% more on appliances. And 55% of appliance shoppers sought the web’s advice rather than ask an associate, the highest amount of any category.

Everybody’s checking prices: Google asks retail stores to be ready with a price-matching plan, or at least a response, and for good reason. “In-store price comparisons are the most common shopping activity across all categories,” Google’s report reads. Among appliance shoppers, 74% are checking elsewhere. That number declines as you head down in price categories: 62% of baby care shoppers, 46% health and beauty, and 36% in grocery stores.

Store apps? Not doing much: In the hierarchy of phone tools shoppers use while researching purposes, it’s 82% search engines, 62% store websites, 50% brand websites, and then down, way down, to 21% using dedicated store apps. That lineup holds true for finding where goods are sold, price matching, and finding coupons or offers. (Although our Co.Labs and Target Retail Accelerator aims to change that.)

It’s not money, it’s time: It’s easy to miss a small-scale, three-bar chart in Google’s 37-page chart. But note that, when asked what things they like most about using their smartphone to help in-store shopping, “Saves me time” was the pick for 51% of those surveyed. “Saves me money” drew 44% of respondents, and “Makes life easier,” somehow segmented from saving time, was 42%. In other words: Retailers who help customers use their phones to save time, rather than always winning the race to the lowest price, can prevail.

Customers want what Google suggests: To adjust to the new reality of people treating their phones like personal shoppers, Google suggests a number of strategies–most of them in the realm of Advance Common Sense. “In addition to having a mobile website, businesses should use it to prominently display retail locations and phone numbers.” Hard to disagree. And: “Offering expert service from salespeople or interactive product demos can help distinguish your in-store experience from online shopping.” Indeed!

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Online shops take stock and move into the High Street

From The BBC
The era of High Street shopping is not yet over, despite the rise of online retailing

We’re definitely a nation of shoppers. We spent more than £311bn shopping last year, but how we like to shop remains the same – 90% of that money was spent in actual shops and stores.

Figures like that may come as a surprise, because over the past year more and more has been written about the High Street’s inevitable decline.

But the value of having a physical branch for people to visit should not be underestimated.

A recent survey from retail analysts Kantar found that 70% of us like to touch a product before we buy it.

Shopping is a social activity and, despite the bargains to be found online, most people would still like to run their fingers along a clothes rail or fiddle with gadgets before they hand over their cash.

It is a mantra that has been heeded by a clutch of successful retailers over recent years.

Trying before you buy

Screwfix started out as a catalogue retailer in 1979, and its listings of nuts, bolts and nails were the cornerstone of any tradesman’s toolkit, but in 2005, after the business was bought out by the retail giant Kingfisher, Screwfix made the move from paper to bricks and mortar. You can even take a course in Shopify now, the world is moving fast, everyone is playing catch up.

It now has almost 300 stores across the UK.

“We had tradesmen turning up at our main warehouse in Somerset asking for things that day – our next-day delivery service was not soon enough,” says chief executive Andrew Livingstone.

Such is the urgency for a Screwfix fix that he says they now have people sitting in their cars outside stores, ordering items through its click-and-collect service and then popping into the store to collect them moments later.

As any tradesman will tell you, there’s no room for error in the building industry, so it makes sense that being able to try out a product before you drill, hammer or cement it into your home is important.

But the same applies to little luxuries.

Price remains king

Oak Furniture Land started life as an eBay retailer in 2003 but within just a few years it had become the auction site’s biggest retailer and was setting up its own website.

Soon that was not enough, and it has since started opening stores across the UK to keep up with demand.

Managing director Jason Bannister said it was a natural transition.

“So long as quality furniture looks good, it fills people’s needs – which is why the internet worked for us.

Oak Furniture Land store
Oak Furniture Land now does two-thirds of its trade in its stores

“But with it being furniture, and going into people’s homes, there is a big appetite to touch it and look at it, too.”

Oak Furniture Land now does 65% of its trade in-store – and that has boosted its turnover considerably.

But with a store come rent, taxes, utility bills and, of course, staff.

In the world of retail, price remains king; more than two-thirds of us will shop online to get the best price, according to Kantar.

Striking a balance between having a nice store to visit and keeping your costs low is crucial.

“The stores are far more expensive, but the internet doesn’t come without cost – you need to staff sales and service centres, too,” says Mr Bannister.

“But we don’t have to have a lot of staff, as most people know what they want and we get some great deals on rent at retail parks.”

The challenge of ‘showrooming’

Perhaps the biggest lure of the High Street is the experience. Going to the shops is a social habit that people do together. This has been recognised at online fashion group JD Williams.

Shoppers in the Bluewater shopping centre, Kent
Despite online challenges, 90% of retail sales take place in-store

“We opened seven SimplyBe stores last year, and now there is the male version, Jacamo, in five of them, dual-fascia stores like Topshop and Topman,” says director Paul Kendrick.

“We know that a large chunk of our customers still love their High Street. We also know that many husbands and wives, or boyfriends and girlfriends, like to shop together.

“Doing it this way makes a lot of sense.”

It is early days on the street for these brands, but Mr Kendrick says he cannot imagine Britain without shops to visit. It is part of everyone’s Saturday afternoon.

However, many bricks-and-mortar stores are falling victim to “showrooming”, where consumers go in, play with the product they want, and then buy it more cheaply from an online retailer.

It is a phenomenon said to be part of the demise last year of Jessops and Comet, and a survey by agency Foolproof found that 24% of us admitted to doing it in the run-up to last Christmas.

Another major criticism of High Street retailers is overexpansion.

Andrew Livingstone said Screwfix was aware of hitting critical mass with its stores: “We’re still feeling our way, we are still growing, but we want to keep the same very simple model.”

It is worth remembering that although more than 15,000 independent shops opened last year, the same number also closed down.

Still – smaller, leaner, with a hefty website to back them up – the successful retailers of the future could prove there’s life in the old High Street yet.

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