digital wellbeing labs

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Goodbye high-street?

oxford_regentstreetRetail on the high street is in the middle of a massive transformation.The high street as we know it is dying. Although over the centuries the type of goods transacted across the counter in shops may have changed, we now face a situation that the actual transactions are vanishing. [...]

Most visible has been the demise of content providers; the record stores, the book shops and the news traders. The changing nature of distribution of content and the cost structures around it, have made physical locations redundant… or are they? Airline and travel agents have already virtually vanished and post and bank services are desperately seeking ways to validate their presence.

At the same time the consumer electronics industry has matured to a point that most products are sold as commodities. Retail margins have diminished, partly driven by online comparison engines and sales aggregators, such that is has become almost unfeasible to offer any customer facing sales services in brick-and-mortar environments. Consumer electronic stores and soon most mobile service provider shops will vanish in the form we have known for the past decades.

The high street is a social environment. A place where people go to discover and learn about products and services, up till recently an essential place for contact between the producers and their customers. Sure companies have always been depending on word of mouth between friends and colleagues, mail order catalogues arrived with the rise of the railroads, and a range of advertisement tools have evolved to reach customers in the most appropriate context, but the current changes are not far from a revolution.

What type of retail is still viable in brick-and-mortar setting? Over the past decennium, since the advent of the internet, the diversity of stores has been greatly reduced. An average high street is left populated with fashion and footwear stores, the odd telecom service providers and plenty of coffee-shops. One may argue that there are increasingly less incentives to visit the high-street.

Retailers and sales executives will point out that perishable goods, instant gratification, last minute orders, impulse purchases and cross-selling opportunities remain a strong incentive for maintaining a presence on the high street. We have only just arrived in the Information Society and we can see many online and mobile services in development which will directly be competing with this argument.

Recently the discussion has been heated by the news that some of the large supermarket brands in the UK are successfully starting to compete on the internet with huge online catalogues filled with “convenience” fashion articles.

Still, we hang on to business models which emerged as part of the industrial society. Industrialisation drove rapidly expanding transport and in succession communication infrastructures, followed by new distribution models for goods. Retail, in simplified terms, has always been about trading in demand and supply models, based on scarcity or basic availability, volume or quality. The department store emerged as a direct result of industrialisation, purchasing large quantities of certain products straight from factories and then repackaging these into smaller fractions which then are passed on, at added value to the customer. Continuous and transparent access to the internet in combination with modern, highly efficient distribution infrastructures make the traditional retail models obsolete. In the end online retailers like Amazon will always offer more choice at the lowest price.

We are offered more choice, but within less variety. It becomes increasingly difficult for a customer to find out what fits with their lifestyle. The highly successful iPhone Appstore is a point in case. There are already over ten thousand products on offer. How do you know which one suits you? Do you have time to test all the alternatives? How do you know if the reviewers can be trusted and match your sense lifestyle? Recommendation engines and current CRM systems are a far way off to offer trusted insights into products and allow us to form meaningful service relationships.

Future retail innovation, for example, is predicted to include 3D online shelves, in Second Life type environments, promising to offer a chance to preview, see demonstrations and learn about the use of products in the privacy of your home. Really? Shopping online, in its current form, is a solitary experience, but people are inherently social beings that enjoy shopping together with friends and family.

Only in recent years have broadband connections started offering seamless transitions, user interfaces across product and service touch points have become sufficiently integrated, that for the first time we get a hint of what continuous user experiences will be like in the future.


In this blog we investigate the rise of the experience stores, scrutinise technologies appearing to benefit the customer experience, explore the development of new types of products and services that are offering innovative product development opportunities, discuss new directions in CRM (customer relationship management), or what some call CMR (customer managed relationships) and we will make a case for a new type of lifestyle showrooms.

The High-street is an essential part of our economy and we at dwb-labs are investigating the type of hybrid environments that will emerge to replace the vacancies left by diminishing brick-and-mortar retail.

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3 Comments

  1. “Consumers who are fed up with waiting at home for deliveries are increasingly choosing to buy online and collecting goods at a time that suits them.” – Amazon in secret plan to open high street shops http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article6945922.ece

  2. People are on the whole social creatures, but shopping does not necessarily represent the main way in which humans interact with each other. I don’t think its as quite simple as ‘more online shopping = less human interaction’…most of the people I see in shops nowadays look like they don’t particularly want to talk to anyone!

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