Although the steady growth of e-commerce sales in the UK since the mid-2000s has had a dramatic impact on High Street retailers, the Covid-19 pandemic and subsequent lockdowns have only accelerated the issue.
The enforced closure of non-essential stores exacerbated so many of the High Street’s problems as online orders were able to continue operating. According to the Office for National Statistics, online sales reached nearly 28% of all retail sales in 2020, up from 19% in 2019. And November saw online sales’ share of the total jump to a record of 36%.
Now, more than 10 months after the start of the pandemic, we are starting to see some light on the horizon. The UK’s rapid rollout of coronavirus vaccines is boosting the confidence of small businesses, and retailers and consumers alike are starting to consider what retail might look like when we finally see the back of this pandemic.
It was the topic of discussion at a recent roundtable of retail entrepreneurs hosted by the Great British Entrepreneur Awards and haysmactinyre.
Natasha Frangos, a partner at haysmacintyre, said: “No doubt it’s been a rollercoaster year for retail and it continues, but it was such a pleasure hearing the innovative and positive ideas brought by the retail entrepreneurs who joined us. Whilst there are still challenges ahead and we discussed many of these during the session, it was great to hear how these brands are responding to changing consumer demands, focusing on how to maximise the future retail experience and engaging with an omnichannel approach that is critical for future success.”
Starting off on the back foot
The discussion began with Johnny Paterson, co-founder of Dr. PAWPAW, suggesting that brands started off the pandemic at a disadvantage, even ones that have a strong e-commerce presence, because of Amazon’s positioning.
“What it showed me was how far Amazon really was ahead of everybody,” he said. “Once this pandemic hit, we all just shopped on Amazon for almost everything we needed during lockdown because it’s so easy. You literally click one button and it’s done.”
However, Lisa Scott, co-founder of Huski Home, believes that consumer attitudes changed as the pandemic progressed. She said: “Our online community has grown massively since the start of the pandemic and we’ve taken on hundreds of independent retailers in that time.
“They’re seeing this trend as well, where everyone was all about convenience at the start of lockdown but their mindset is changing now, which is really positive to see.”
The one thing online can’t offer
So how does the High Street claw back those sales once the pandemic is over?
Customer experience is the key.
Lizzie Darby, founder of MadeTheEdit, argued that amidst the “doom and gloom” surrounding the High Street at the moment, people still like to go shopping.
“The definition of shopping is the action or activity of buying goods. For many, online shopping is very much a transactional action, whereas in-store there is an opportunity for an experience, a real-world experience that during lockdown people are crying out for. The Highs Street has to take advantage of this.”
Tru Powell, co-founder of Kandy Girl, explained that he is already having conversations with retailers, department stores and shopping centres about introducing children’s spa experiences post-lockdown. He said: “Historically for most retailers the focus has been about getting the numbers in and out as quick as possible. But now they’re really focusing on the shopper experience, so the longer they keep shoppers in store, the better for them.
“That’s the kind of strategy that physical stores need to take moving forward; sell the experience and keep consumers in-store for longer.”
“The experience is the only thing that online cannot offer,”
The easing lockdown conundrum
While developing a unique and engaging customer experience may be key for the High Street post-pandemic, Laura Birrell, founder of Sticky Heelz, warned that it is likely to be some time before retailers can truly provide a full experience.
“Initially when lockdown is eased, we’re obviously going to be under some sort of social distancing measures,” she highlighted.
“When restrictions eased last time, retailers had no option but to get you in and out as quick as possible because they couldn’t allow as many people into the stores.”
If customer experience is the key to the High Street’s survival, it faces plenty more uncertain and challenging months, Laura suggested.
“I love shopping but I just didn’t want to do it when restrictions eased last time - wearing a mask, being pushed this way and that way around a store, feeling like you can’t browse because someone else is waiting two metres away - it really bites into the experience.”
The group suggested it is important for retailers to bridge the gap between lockdown and a restriction-free world in the future.
Nikki Capewell, founder of Pedddle, explained that she is in the process of launching an online platform that allows independent, creative business owners to create and share videos about themselves and their business, record demonstrations of their products, all helping viewers to engage with the brand.
“The plan is that, in this phase between experiences, customers have that touchpoint with the businesses and plan to go to their physical stores after lockdown,” Nikki said.
“It’s about building your tribes online to bring them into store, but also nurturing the people that do support your business in-store and taking them online as well.”
Lizzie Darby argued that a strong click & collect service has been crucial to her businesses’ survival and success throughout the pandemic, and will be vital for High Street stores post-lockdown.
“We added a click & collect service at the start of lockdown and we’ve sold a lot through it,” she said.
“Something I’ve found is that if the lights are on, people don’t forget you. We’re in a good location where people walk past us all the time, so we’ve continued to change our window display and it reminds people that we’re there.”
Closing the skills gap
Working with the Scottish government, Laura Birrell raised the issue of developing digital skills in further and higher education. She said: “The businesses with the biggest budgets and the right staff are the ones that are getting their products in front of consumers first.
“And while it’s really good to be able to build things through Facebook communities or Instagram, in order to create these online experiences, having people who really understand how to develop those platforms is vital.”
Laura added: “Smaller businesses that are maybe not currently online or are quite new to it are really struggling to get the right people to help them move their business forward.”
So where does the High Street go from here?
Johnny Paterson highlighted the importance of diversifying your markets as a retailer. He explained that Dr. PAWPAW products are sold with physical independent retailers, physical major retailers that also have an online presence, solely e-commerce retailers and direct-to-consumer through its own website.
He said: “We’re looking at other avenues because, as we saw when lockdown began, one part of our business (physical stores) could shut down overnight. Not being exposed to one type of market or one type of consumer really saved our business last year.”
Throughout the conversation, there was a very large A-shaped elephant in the (virtual) room. Amazon.
Stephen Shortt, founder of Hawkins & Brimble, said: “In my opinion you have to be on Amazon, otherwise third party sellers would sell your products for a low price anyway. At least you can try and maintain RRP through winning the buy-box with advertising.”
Johnny Paterson added: “We all know that Amazon can reduce prices quite quickly, which means independent stockists can’t compete because someone will go into their store, see a product, look online and see it on Amazon for a lot cheaper.
“If we really want to protect independent retailers then we need to take control of our Amazon pages, take control of our registry and take control of our pricing.”