It’s not looking good on the high street – stores are closing and customers are abandoning town centres.
Is it the customer’s fault? No, it’s not. People have been telling retailers for years that the internet is going to affect their businesses. I can’t understand why it’s come as a shock to them.
The internet boom started more than 20 years ago. For years people had talked about ecommerce, or internet shopping, but nothing happened.
Smug people said to me then: “I told you so.” Then, perhaps many years later than expected, companies such as Amazon really made an impact and the ecommerce boom started.
“Retailers relaxed because at the time it still didn’t seem to cause them a big issue”
And then people said ecommerce would have a significant effect on the high street, but nothing happened, and the same smug people said: “I told you so.”
Now it’s killing the high street. It just took a bit longer for things to change and in that time, retailers started to relax. That’s the problem – retailers relaxed because at the time it still didn’t seem to cause them a big issue.
We are now awash with disruptors who typically adopt new business models that are different from the incumbents, models designed to appeal to customer needs. Simple really, the formula for success has always been the same.
The disruption theory is that alternative companies grow market share by starting from the edges of a market, then they work their way up and into higher-value sectors.
Then, at a certain point, the established company collapses and the challenger becomes the new incumbent. Simple.
The truth is that the new generation has caused retail to go over the tipping point. Older people like me use the internet in a different way to younger people who have grown up with it.
The thing that changed everything was the smartphone. Wherever you go, people have a smartphone in their hand. People are addicted to it. Go on a train or bus, and people are looking down at their phones, even when they are walking down the road.
We’re in a panic when we can’t feel our smartphone in our pocket or bag. This tells me everything. Companies that are doing well are the companies that know how to exploit smartphones.
“The new generation not only live on their smartphones, but they also don’t think twice about returning something if it’s not right”
Another thing that changed is the new generation not only live on their smartphones, but they also don’t think twice about returning something if it’s not right.
Older people don’t like to send stuff back, but younger people don’t have a problem doing that. I’ve got three teenage daughters, and there is a constant stream of parcels delivered to the house and also things being returned.
Finally, Marks & Spencer in my home town is one of the stores due to close. Since the announcement, my mother has been reminiscing about the old days and wants to visit the store before it closes.
The problem is that she never shopped there before the announcement of the store closures. Does that sound familiar?
The smartphone generation never bought there, so they’re not going to reminiscence about Mark & Spencer closing down – they spent their money using phones while they were on the bus or on the train.
So, the big question is, for the people who work at these big retailers’ head offices, are they still using flip phones? Have they been walking around blind?