Will consumers continue to shun the high street in favour of online shops?

So I’m taking a bit of a diversion away from the small, friendly, local pub that I call Twitter for one post and trying out something new. I wanted to see what the world was like outside (great view!) so if you’re expecting a dose of social media musings, come back again soon 😉

As part of my work related media diet, along with NMA, Marketing and PR Week, I subscribe to Revolution magazine. It’s undergone a bit of an overhaul recently, it looks fantastic and it’s always got some thought provoking articles. One of which forms the crux of this post. The covers in the last few months really have been beautiful. I actually now look forward to my copy dropping through the letter box once a month.

I’ve always maintained an interest in all things retail working for Argos and HP in their Marketing depts along with dabbling a bit in the running your own business thing when I was younger, so it was an interesting read when reading “Will consumers continue to shun the high street in favour of online shops?” in Revolution. If you missed it I thought I’d republish it here for your viewing pleasure. Before I do that though..

What do you think? Is retail as we know it here to stay? What’s next?

Without further ado, it goes a bit like this.. All credit to Revolution, P22 of the February issue of course..

Bargain hungry shoppers flocked online towards the end of last year, helping retailers including House of Fraser, Next and Marks & Spencer record a rise in e-commerce sales in the run-up to Christmas. Will online shopping continue to boom at the expense of the high street? They put the question out to four individuals. As an FYI, before talk leads to the results, bear in mind that this was published in Revolution, a magazine that’s tagline is ‘Smarter digital marketing’. So when 3 out of the 4 respondents said Yes to the question in the article title, it is perhaps a bit of a one sided argument. Would have been good to hear a bit more from the other side.

1. Andrew Ellison, Digital Controller, Schuh (Yes)

This year will be the first time online retailers will have no guarantee of achieving sales increases. Most online shoppers still use credit cards, and the issuers are increasing their interest rates, no matter what the Bank of England does.

People think online shopping is all about price. It isn’t. Those online retailers that compete on price will find the high street nipping at their heels as clearance sales and all-year promotions become commonplace. Those online retailers that compete on selection and availability will continue to boom as the high street merchandisers trim their ranges of all products that have limited appeal and low margin.

People will still pay for full price for a product they really want – particuarly if they can’t get it at the local shopping centre. (Supply and demand? Simple)

We are all passionate about certain categories of goods, from top end electronics to Sienna Miller’s handbag. Online will soon be the only place for them.

2. Robin Goad, Research Director, Hitwise (Yes)

Online will steal shoppers, but the biggest beneficiaries will be web-savvy high-street retailers. Spending shifted online last Christmas, but more of it is going to familiar names than internet start-ups. During December, the websites of high-street retailers received 32% more visits than their online-only rivals, and this gap will widen in 2009.

Thanks to the recession, consumers are turning to the internet to save money; discount voucher searches have doubled; consumer advice sites have flourished; and the supermarkets are thriving.

M&S experienced its busiest ever day online when it reduced prices by 20% in November. It is the combination of online and offline that has helped brands such as M&S, Argos and Tesco thrive on the web. While a presence on the high street helps, particularly during sales season, the strongest asset for a mult-channel retailer is a trusted brand.

3. David Walmsley, Head of Web Selling, John Lewis Direct (No)

On Christmas day, a strange thing happened. Johnlewis.com had lots of visits and browsing, and a pleasing amount of sales. But conversion was weaker. Customers were researching online before visiting one of our stores.

For us it is genuinely not about increasing sales in one particular channel. The challenge is to keep up with our customers expectations. In 2009 therefore we expect to build on the success of cross-channel propositions, such as Deliver to Store service. We also expect to see an increase in customers researching online before heading in-store, and vice versa.

Our aim is to provide a multi-channel shopping experience (bla bla marketing spiel) that flexes to meet demand so customers only ever deal with one John Lewis. We therefore believe that the future for the high street is a vibrant one. (But then they kinda have to say that, right?)

4. Fadi Shuman, E-commerce Director, Pod1 (Yes)

This online trend will continue for the next few years, and shopping on the high street will never be the same again. Last Christmas, a record number of people experienced the convenience of shopping online, and they will spend ever more of their cash online this year and next.

The fact that websites are getting more secure, coupled with more intuitive interfaces, faster connections and a plethora of other improvements to the internet, means an even more convenient shopping experience that just keeps getting better.

In the next few years, the high street will evolve rather than completely disappear. The new wave of shops will be less about a pure shopping experience and more about a social experience where you can purchase goods while being entertained.