The death of the high street. It’s the age-old matter of “traffic” versus “spend”
Here at Shopper Intelligence we spend a lot of time talking about traffic and spend. Frankly, we see these two fundamental pillars of retail thinking as being at the heart of category management (which is why we measure them in supermarket categories for the first time)
Much is being written about the pending death of high street retail.
Stores are closing due to the growth of online, the litter of empty units, charity shops and ever-growing numbers of coffee shops, betting shops, hairdressers but no one really selling things. But to me, it helps to go back to the idea of traffic and spend.
The first task is to drive traffic. No traffic, no spend. So, if people are not “coming into town to shop” it doesn’t matter what the stores do, they will see declining spend. I hypothesise that people are driven on a shopping trip by a few crucial “must get” items. I need to get a shirt for that interview, and I need to buy something for dinner, a present for Gran, I need a dress for the party. These used to be the missions that made the retail shopping trip essential. They propelled people out of the house, to brave the weather and the parking, to come into town, and crucially got them looking at/into shops. Once there, they bought additional things on impulse. That’s how stores work.
The critical thing is that online has removed these missions far faster than the 7% of total sales would imply. For the next generation (and even older folk!) needing a shirt for an interview means Amazon. A party dress means ASOS, something for Dinner means Ocado. If online retailers can deliver next day exactly what you want, why make the trip at all. My kids are in their 20s, and the idea that you “pop into town” to go shopping is almost an alien concept. Even going to Tesco is a bit last resort (when you miss the Amazon Prime deadline!) And, of course, you can “window shop” online from the comfort of home.
Today’s high street missions (need a coffee, a haircut, place a bet) don’t require you to look into shops.
So, my take out on how high street retail has to work to survive is to create a new mission. Offer something that you can’t get online, something that generates traffic. Probably experiential, probably personalised. And so do the towns themselves. Events, activities, stuff that requires attendance to enjoy. And activities that are connected to the stores in the town.
The aha moment for me to why high street shopping is dying so fast – is because online is stripping out the “old school” traffic drivers more quickly than others replace them. Too much of the 7% online is taking the traffic with it.