The Role of E-Commerce in the Decline of the High Street Market
The high street market has registered a decline in sales over the recent past. As such, there is need to address the role played by e-commerce in the ensuing decline. Marketers are finding it tough to cope up with this new development and, consequently, success in the high street market is not forthcoming. It is from this perspective that this paper aimed to determine the possibility of success for marketers in the high street market. Furthermore, the paper sought to determine the extent to which e-commerce has killed the high street market. According to Ruddick (2013), the increasing pressure from small and large online retailers is a major threat to high streets. The online commerce platforms are perceived to be behind the recent decline in conventional retail spaces. While the threat from online retailers can have detrimental effects on the high streets, it can be minimised by utilising the Internet alongside physical retail stores and offering more than just a fundamental service to increase customer fulfilment. Fundamentally, retailers must adjust to changing environments and meet customer's needs by satisfying their desires from retail shopping.
The Effect of E-Commerce on the High Street Market
The study evaluated the effect of E-Commerce on the high street market by focusing on different aspects of the market. By failing to adapt to technological advancement, the high street retailers are faced with diminishing sales prospects. Notably, the change from brick and motor stores to online platforms by traditional British sellers has significantly contributed to the deterioration of the high street shopping markets. The study also explored the retail locational obsolescence. The locations include the multi-spatial nature of critical significance which include the local markets, international economy, and submarkets. Other areas include discrete property-specific dynamics. Through this, a theoretical model, description, and analytical criteria are used to direct imminent research, policy change and the allotment of capitals. Outstandingly, three steps are performed to facilitate the conceptualisation of the model, which is vital to future research and the current policy development in this economically imperative, multifaceted and contentious field.
Methodology
Fieldwork was conducted in 15 town centers in South East England, which included interviews with town center managers and planners. Observations of special events and activities were also conducted. Moreover, the study incorporated case analysis of past and present literature concerning the subject and online surveys which involved the searching of key features and content of the online databases. The reliability and validity of the content were determined through a comprehensive testing through the use of a wide spectrum of both high street vendors and e-commerce retailers. The study reveals that including the members of the society in the events and initiatives of the research process is an imperative method to add vitality back to the high street. However, many initiatives are required at the national level to safeguard the detriment of the high street. The issue requires a great consideration given that digitalisation has led to massive transformations across several industries. Research conducted by different scholars discloses that every business is currently struggling to adopt new technologies. The study concludes that the existence of high street market has continually threatened by digitization and technological disruptions.
Introduction
In the United Kingdom, retail techniques have always shown signs of change since the mid-1960s amid the emergence of modern technology (Thomas, Bromley & Tallon, 2004). Retailing was adopted mostly by businesses located in cities and towns. These businesses were referred to as the high street. They were very effective, particularly in the 18th century. However, the emergence of online marketing greatly impacted on their operations. The elective sale techniques used in the high street market transformed from the development of households with an auto to substantial shopping scale conditions.
The high street market plays a critical role with regards to economic growth and development. In a briefing paper concerning business statistics in the UK, Rhodes (2015) divulges that more than 2.9 million people earn their living through activities carried out in this market (Wallace, 2017). However, the market has faced several challenges that threaten its existence. Policies that support shopping advancements have been recognised as a genuine risk to high street retailers as they discourage consumers from the high street stores and hence, have negative ramifications on the community (Gransby, 1988). Due to constant threats from the Internet and different shopping techniques, the high street needs to increment the value of goods and services they offer to their clients. Besides, shopping experiences and delivery times are key approaches for drawing consumers to the autonomous retail stores and the customary high street (Kumar, 1997; Xia et al., 2008).
To infuse vitality back to the high street, it is contended that concentrating on making a social space instead of a "retail attractor" helps owners to limit imminent dangers to the physical retail stores (Griffiths et al., 2013). Town focuses will profit by figuring out how to modify the picture of high streets to make it a more alluring retail space. For instance, reports by Portas (2011) lay out a progression of suggestions to make the high streets all the more engaging to consumers. By utilising contextual analysis cases, this investigation will predominately look at the viability of such activities on neighborhood high streets and the suggestions for retailers. The retail sector has become the center of attention in the UK, especially at a time of complex and rapid evolution. Today, there are centralised policies such as improvement of the town centres and high streets. According to DCLG (2012a) and prominent evaluations from Portas (2011), there are substantial importance and concern for the retail economy by politicians as well as the industry in general. Grimsey et al. (2013) found that 46.6 percent of traders in the UK were considered to have a high possibility of failing. The issue of recognizing outmoded retail settings is vital to the key stakeholders in town centres. However, a concise, reliable, valid and precise conceptualisation of the dynamics affecting the high street markets needs to be considered for the survival of this sector.
The study demonstrates that many perspectives regarding the high streets is directed to expert storehouses and relates particularly to specific partners. The data is left unused and of no meaningful value. Even so, while there has been an appalling reasoning about the high street, a large portion of it has been done in disconnection once in a while supported by any sort of inventive vision. Of note is that an extensive audit truly divulges the reasons why there is a steep decline of the high streets. As such, there is need to consolidate literature regarding the subject. Indeed, it is clear that sales outlay on the street businesses is dwindling and the pattern is set to carry on this trajectory.
The present concerns have raised and reframed consumers' desires about high streets and town focuses. Comfort has turned into the 'trendy expression'. The present state depicts a period of consumerism and, thus, the high street needs to adjust accordingly given that shoppers are seeking alternatives that are convenient for them. Kollewe (2017) records that the UK consumer environment continues to be challenging especially the homeware and clothing markets. The trend reveals that recent times has seen an increase of the retail floor space by 30%. On the other hand, the retail space around the local area has fallen by 14% (Kilby, 2013). The resultant improvements have been facilitated by superb arrangement rules and guidelines.
Are the deteriorating trades in the high street a consequence of e-commerce?
The influence of online businesses on the high street market is inevitable. Technological disruptions have influenced how businesses go about their operations. According to Birrell (2014) and Jayawardhena (2004), the pace of innovation is speeding up, with one in four people shopping from the keyboards. Bury (2017) postulates that the retailers with internet dealings are opening brick and mortar stores in a bid to attract more customers. Conversely, Hawkes (2013) reports that a projected 14 percent of the street stores are either empty or boarded up following a credit crunch that has raged through the retail industry. Consequently, businesses in diverse industries have digitised their operations with many using the internet (Head, 2009). Whereas there are some businesses that have not fully shifted to online trading, they still make use of the internet through the use of supported transactions. As a result, many shoppers prefer to use the online platforms because of their ease of accessibility and the fact that they are time efficient (Vizard, 2013; Joines, Scherer & Scheufele, 2003). The efficiency of the delivery destroys the shoppers continued association with the high street markets. Even though the strength of the physical high street shops lies in convenience, product urgency is a vital aspect of fast-moving products. According to Thomson and Laing (2003) as well as Ha and Stoel (2009), there are three major reasons why customers prefer shopping online; freedom and flexibility, time effectiveness and little physical effort involved in shopping. In this regard, the performance and proceeds of the high street market have been tremendously affected.
The above scenario has prompted retailers in the high street market to employ a myriad of approaches to retain their customers. According to a research by Parker, Ntounis, and Quin (2014), outlets have considered issuing discounts on their products to lure customers back to their stores. However, when money-sparing expert Martin Lewis started to encourage prospective customers to intentionally tie their purchase with a must-have incentive, the strategy later failed (2018). Consequently, marketers terribly failed with the discount incentive approach. It is the reason why various high street vendors have lost interest in the industry’s predicament. The fact that the deterioration of sales has been contributed by the development of online platforms, it means other aspects equally influence the outcome. Some players are equally disappointed with their failed attempts to lure shoppers back. Perhaps it is their approaches that seem not effective enough. Nonetheless, some have relented and accepted that it is quite normal and expectable for people to simply change their preferences and tastes (Parker, Ntounis, and Quin (2014). From this point of view, it can be seen that the e-commerce contributes significantly to the detriment of the high street market. Even so, it is not fundamentally true that the e-commerce is the only cause of this decline.
Online shopping possesses unfair competition in comparison to the high street market. One-sided competition has been lengthily researched in the planning and retailing literature (Parker, Ntounis, and Quin (2014). Studies show that large retailers use their enormous capitals to invest in research and development to support their expansion strategies and can as well manage to pay to challenge decisions made by the Local Authority decisions through appeal. Although the unfair competition posed by e-commerce over the high street is not illegal, it can be perceived as unfair. A study conducted in Cardiff revealed that only 46% of center non-food retailing was in areas identified by the local development plan (Guy, 2008). Even though not unlawful, but smaller merchants lack the resources to construct retail shops on out-of-town areas where land is inexpensive (Stubbs, Warnaby & Medway, 2002). Besides, they cannot be requested to lease such retail property by developers.
The very implement that facilitates e-commerce retailing is the same factor that poses a risk to the existence of high street markets. According to Hart et al., (2013), the internet is a major threat to the retailers on the high street. Hart et al., posit that the issue is caused by the swelling number of online shoppers as a result of the internet (2013). Regular online customers are most likely to shift from shopping at city center stores to the online platforms (Hart et al., 2013). Nonetheless, the undesirable effect of e-shopping on the performance of high street markets is depended on the retail classification (Kwan et al., 2007). For instance, vendors dealing with videos, DVDs, hardware, books, CDs, and software have experienced a calamitous effect of e-shopping on their transactions (Parker, Ntounis, and Quin (2014). What this means for the high street market is that m-commerce provides prospects for invention on the high street. Therefore, adoption of technology can significantly enhance the vivacity of the urban centers (Experian, 2012).
In the recent past, many consumers have abandoned the purchase of the basket of products offered in the high street market. In truth, no one has a precious stone ball to predict how basket abandonment will evolve in the subsequent years, or which techniques would begin to address this long-standing e-commerce problem. At the very beginning, it is imperative to critically evaluate the issue from all perspectives owing to the fact that most high street shops are being abandoned (Parker, Ntounis, and Quin (2014). The high street market, therefore, needs to evaluate how their abandonment rates compare to their sector average; whether the detail is enhancing or getting worse over time, and if there are any seasonal or other time-specific changes. Correspondingly, marketers ought to consider probing customers’ rationality and consideration of their decision-making process during shopping. The acceptance that the decision was made based on the existence of e-commerce alone is precarious. Undoubtedly, a lot needs to be determined with regards to the aspects that influence consumer’s decision-making. Besides, there is a need for a thorough scrutiny of the checkout processes that may as well be too convoluted for consumers to have a preference. It is only when these issues are addressed that the influence of online businesses on the high street market is determined.
It is not safe to rely on the notion that the degeneration of the high street market is solely caused by the e-commerce given that there are other reasons that may have contributed to the decline. Bidddulph (2011) posits that the evening-time economy presents a substitute urban centre market to the residential offer. For instance, in Liverpool, the progression of the night economy in regions such as Ropewalks seems to be targeted majorly by the local population. Conceivably, that could be the reason why the night-time economy is used as an elective indicator for urban centers. Jones, Hillier, and Comfort (2004) note that even though the many restaurants and bars outlets aims at the evening trade, they tend to offer little daytime vitality. Even so, the evening cases may result in an anti-social behavioural concerns which may damage the reputation and perception of the urban center. According to Jones, Hillier, and Turner (1999), the growth of city night life comes with social problems and regularly results to negativity and dislikes from the local people.
The change of the quality of life is another concern that may contribute to the degeneration of the high street market (Parker, Ntounis, and Quin (2014). The performance of a town enter has a political dimension to it. The fundamental aspects encompassing the conservative focus includes social vitality and economic viability of the urban centers. Some scholars have argued that the search for a better life has compelled people to move away from the urban centers (Andrews, 2001). The improvement of the suburban retailing is a result of the consumer income and mobility, high-quality living conditions at the edge of the towns and the lesser costs of living (Birch, 2009). As such, Razin (2007), claims that the fashionable and attractive retail focuses are considered to have total influence on the acuity of the inhabitants regarding the local quality of life. Ozuduru, Varol and Yalciner Ercoskun (2014) claim that traffic, as well as insufficient parking, could be the other reason why consumers dislike shopping in the high street markets. The claim is reinforced by Hass-Klau (1993) who records that pedestrianized areas are more likely to increase the footfall for the retail services by a margin of between 20% and 40% in the United Kingdom.
Various aspects concerning sale suggestions can as well influence consumers’ decision not to prefer the high street shops. By analysing i4 shopping streets and 25 shopping centers, Reimers and Clulow (2009) discovered that all malls satisfied the standards for protracted trading hours in comparison to only 2 of the 14 streets. Therefore, the availability of high street businesses is critical to performance. Findlay and Sparks (2009) confirm this dynamic by noting that pleasant environment and extended hours in newer shopping facilities have contributed to the shrinking of town center performance in Scottish towns. In the event that the main driver of the abandonment is the delivery or returns policy, then the problem lies in the management of the high street shops. As such, marketers need to share this knowledge with the administration and appropriate measures taken. Moreover, if poor reviews are the cause of the detrimental influence, it signifies a broader brand marketing problem that needs to be urgently addressed. Similarly, with a steady rise in the number of external items, the void between exorbitant and complex integrations of the high street market can be filled productively.
Digital revolution has resulted in a decline of 62,000 retail employment within a period of one year. This result was the reason of the immense pressure exerted on the high street market. Consequently, most stores are cut back by the number of high street retailers. The outcome is caused by the huge growth of online marketing since retailers were forced to look forward to meeting the expectations of consumers. They had to switch to the new shopping habits to maintain their investments rates. This contributed greatly to the degeneration of the high street market. According to Savvy Insight, ‘Curious about What Makes Our Company Unique?’ the high street market faced vast problems in meeting their daily sales target. The effect is attributed to the 75 percent of consumers who are willing to shop online and ready to purchase with a condition of quick deliveries. Out of the 75 percent, only 23 percent of the customers were ready to shop in the high street market. The research discovered that online sales were the major causes of the decline of sales in the high street market. Nonetheless, the results cannot be considered explicit owing to the fact that other factors that might lead to this decline as well. In this regard, as much as the e-commerce is said to be the main cause of reduced sales in the high street market, other dynamics are also responsible for the same effect. Therefore, there it is worth considering all the underlying forces in equal measure. Following the massive decline of sales in the high street market, the issue of a vendor being successful in this market arises.
Is it still feasible to accomplish high performance on the high street?
The point of whether it is still feasible to accomplish high performance in the high street market is a worthy consideration. Indeed, there are high chances that marketers can turn around the recent plight befalling retailers in the high street market. The world of shopping is increasingly becoming borderless and the consequences, as seen with the dwindling performance of the high street, can be damaging. Marketers in the high street market need to learn from the case study of Google in China. Google launched a self-censored search engine in China in 2006 following previous government restriction of internet access. Google was forced to adopt new strategies that could commensurate with the policies in place. The situation in UK’s high street is no different. Marketers need to accept and understand that e-shopping is the new trend and it is here to stay. Therefore, retailers need to adopt new-fangled approaches of dealing with the e-commerce disruption. Put differently, marketers must rethink their strategies if the high street market is to be salvaged from the deteriorating performance.
Although most e-commerce retailers such as Amazon have a global brand policy, their strategies reflect the behaviours, attitudes, and nuances of the locals. The same applies to the retailers in the high street, although in reverse. While the high street marketers consider the characteristics of the locals, their products and marketing approaches lack a global touch. Arguably, this could be the contributing factor for the continued decline of high street performance. Although consumers believe that smaller businesses provide better personalization, quality, and trustworthiness, the high street marketers can still use the benefits of global branding. By integrating both global and local marketing strategies, Parker, Ntounis, and Quin (2014) note that it could mean survival for the high street market. Incidentally, Bruce and Tamango (2012) opine that the continued laxity and fear of evolution prevents the turnaround of performance in the high street market.
Besides the incorporation of the wide-ranging marketing strategies, it is imperative for high street retailers to understand the threats facing brick and mortar stores (Brummer, 2011). There are various concerns presently influencing the UK high street market, which when considered can turn around its declining performance. Barsby (2016) estimates that approximately 27 percent of retail sales are done over the internet and predicts that the transactions will exceed 174 billion dollars in the coming years. These factors establish a threat to the success of the high street market. According to Allport (2005), the high street market has changed drastically over the last 30 years. However, despite its decline, it still accounts for approximately 50 percent of retail spaces in the United Kingdom. This is about 50 percent of all retail transactions. The fact that high street shopping is still considered by consumers in spite of the rampant online retail activities is a promising prospect. In this regard, the sector remains highly feasible to better performance if the right strategies are implemented to counter the e-retailing effect.
Allport argued that the propagation of trading settings and arrangements has preordained the UK’s high street to the extent that its historic significance wears down (2005). There are other supply networks which have gained significantly more than the high street market. These channels include the virtual retail spaces and the internet among others. All these entities brought together have contributed to the growing risk of the death of the high street market. However, if appropriate promotion approaches are adopted, the challenge posed by supply chain networks can be eliminated. Furthermore, the high street market has registered a slowdown of transactions that can as well be remedied. According to Bruce and Tamango (2012), the high street businesses in the UK have ceased to operate and hence, contributed to the predicament experienced by the UK economy. Consequently, the street business is at its deepest point majorly because of the increased pressure from the increase of e-commerce platforms and varying consumer behaviours. What makes the situation worse, according to Parker et al. (2014), is the failure to adopt new promotion strategies to keep customers coming back to the high street market. It is, therefore, evident that vendors can be successful in the high street market only if appropriate measures are taken to address the wide-ranging challenges facing this sector.
Conversely, it is arguable to claim that there is a possibility of succeeding in the high street market. The high street market has faced the risk of extinction since the 1970s. However, despite the numerous threats to its existence, the high street market continues to be the primary network of distribution. The stores continue to be critical to the retail markets in spite of the growing raft of concerns and outlays connected with it. As a means of improving their position in the market, retailers ought to find new techniques where their product and street offerings, along with the store experience appeals to the customers. Besides, the means should convince prospective consumers to shop from the high street businesses more often. With the stores presenting more of a social and convergence environment, businesses can learn new ways of differentiating their products to create exclusive selling points to consumers (Kwon and Kim, 2012).
The connectivity of the internet on the high street is another factor that can positively impact on the performance of businesses in the high street market. In the recent past, Internet usage has tremendously increased with about 78 percent of the population in the United Kingdom accessing the internet in 2013 (Dutton et al., 2013). A study by Experian (2012) highlighted various statistics with the potential to influence the high street performance; 45 percent of mobile operators in the UK above the age of 16 have smartphones; 69 percent of the smartphone users frequently browse the internet with 71 percent of the same users surfing for information concerning advertised products (Parker, Ntounis, and Quin (2014). The statistics show that with the right investment of internet connectivity in the high street, it is feasible to accomplish high performance (Commerce, 2011). Therefore, it is high time for high street retailers to adopt innovative ways that can make a difference on their current dwindling performance. In other words, the market is yet to invest in a raft of other ways that can positively influence their proceeds.
Besides the adoption of the internet connectivity to improve performance, the high street retailers can also consider other feasible alternatives. Notably, it is important for urban planners and retailers alike to develop a framework that would provide for flexibility to adapt to whatever retail turbulence that is yet to come to the high street (Grimsey, 2013; Collinge, Gibney & Mabey, 2010). For instance, the integration of the broadband technologies can augment the number of shared links between the network or the node participants in the high streets (Mennecke, & Strader, 2003). The more network connections, the higher the adaptability of the network to changes in the success of the individual shops and services (Grimsey, 2013). In this regard, urban centers will become virtual markets where consumers can access the latest information regarding the availability of brands, services, products and services (Kim and Stoel, 2004). With a central and one-stop high street network, the connection would support rather than supplant the town center experience (Hart et al., 2013).
The high street retailers can also benefit from the integration of physical and virtual market. Both markets are perceived to be an undeveloped field with no sufficient knowledge of success in the high street performance. With free WIFI as well as networking opportunities arising from the investment, a high street could develop into a smart city such as Santander in Spain. McDonald (2013) notes that sensors connected to the fiber networks record data concerning the city and its environs thereby allowing citizens to use applications to process information accordingly. With the implementation of this approach, it remains feasible for the high street to record high performance.
The success of the high street is affected greatly by inflation. The increase in the rate of interest over the recent past has reduced house price inflation. As a result, the consumer expenditure and mortgage equity withdrawals have also declined. Debts along with debt servicing levels are very high in the present economic status. As a consequence, the effect is leading to the fragility of consumer confidence (2005). The situation has also contributed to the surge of utility bills and increases in National Insurance contributions. As a result, the willingness of consumers to go out for shopping has declined tremendously.
The amount of sales of any business determines its success. Sales development on the high street is not only impacted by the superseding fiscal conditions but also variations in customer’s consumption pattern as well as their ability and willingness to go out for shopping. In this regard, the requirement for more prominent adaptability from retailers, not just those situated around the local area, is fundamental. The ultimate objective should be to enhance the capacity to respond according to the market’s dynamic changes. Besides, retailers should have the capacity to show adaptability from multiple points of view. For instance, by operating in a wide variety of store sizes, increasing the working hours, gathering information about consumer behavior among others helps to improve retailer’s position in the market. The consumer purchasing pattern has progressed toward a point of becoming less unstable. The instability of the consumption pattern is a major threat to the high street markets. In any given business, consumer demand determines its profitability. According to Allport (2005), the consumers' expanded price affectability is both a reason and an impact of the polarisation that has happened among retail administrators, especially in the footwear and clothing market.
Furthermore, the growth of supermarkets has threatened the success of the high street market. A substantial effect has emanated from the hypermarkets that have swiftly developed into the non-food markets such as footwear and clothing. As from 2000, merchants have seen footwear and clothing markets develop four-fold compared to other general product offers. As a result of the development of value markets, combined with an expanded 'indiscrimination' with respect to the consumer, mid-market administrators, Marks and Spencer have determined that clients opt to consider different shopping avenues. These organisations have consequently been affected by the relatively steady decline of the price (Featherstone, 2017). As such they have been compelled to adjust their pricing strategies to mirror the transformed retailing condition.
The success of marketers in the high street market is adversely affected by deflation. From 1996, the Consumer Price Index (CPI), has increased by 14% in the United Kingdom. However, the price of products has not adjusted in accordance with the new developments. In fact, as indicated by the CPI, the value of merchandise has decreased by 2.6% over a similar period. To a huge degree, this is an impression that control has shifted from the producers to the retailers. While retailers have adjusted according to the turbulence, they have managed to control supply chain involving all stakeholders (Sembehy, 2017; Fletcher, Greenhill, Griffiths, & McLean 2016). Consequently, this has brought about a lessened cost base and, even a change in net revenues.
Alex Brummer uses Amazon as an example to explain the major threats facing the success of marketers in the high street markets. According to Brummer, Amazon's strength of web-based shopping is the greatest risk to every participant in the High Street market. Only a handful of UK retailers such as Next and Argos possess the requisite mechanisms to survive the Amazon effect. However, Sainsbury's online presence and integration with the brick and motor stores are behind their excellent performance in the recent past (Hackney, Grant, and Birtwistle, 2006). Undoubtedly, it is evident that succeeding in the high street market is a very problematic prospect.
