Posts tagged ‘Hollister’

January 13, 2012

Does Virtual Shopping Mean Curtains for the High Street or Are We Being Seduced Back into the Real World?

Question:  What distinguishes those retailers who will survive and thrive on the high street and those who will sink into oblivion under the weight of internet shopping?

Answer: An in-depth appreciation of the things that customers value about a direct retail experience.  The things that make the in-store experience something of genuine added value.

 The economies of scale and reduced overheads, and sheer shopping convenience achieved by a virtual store will never be matched by real life bricks and mortar shops, so the competitive advantage has to lie elsewhere.  Reducing prices and increasing ranges will only go so far in driving sales and eventually the squeeze on profits will force many shops into radical restructuring or liquidation.   Those who survive will have had a concerted re-think about what they are offering over and above the internet.

HMV, the iconic music and entertainment high street retailer in the UK is a case in point.  Despite announcing profits warning after dismal forecast during 2011, the company pushed on throughout the Christmas trading period and continues to insist that it will survive, despite a sales slump (8.1% decline in like for like sales for the 5 weeks to the end of December).

I fear the writing is on the wall HMV.  The internet offers identical products cheaper and without the trip into town.   Your store refurbishment programme is nice but not sufficient and your British stiff upper lip in the face of continual bad results is admirable but Titanically hopeless.  If you continue to do what you have always done, you will get what you have always got – and in your case that is consistently declining sales.  There is only one place it can end up: administration or disposal of assets.

There are many other examples of high street retailers struggling to survive against the combined might of internet retailing and the global economic depression: Blacks the outdoors retailer, Past Times the nostalgia gifts retailer, Hawkins Bazaar the toy shop, Barratts the shoe shop and Thorntons the chocolatier.  What unites them is that they are all long-established high street retailers dealing with the new world around them by doggedly sticking to doing what they have always done.  Perhaps they are reducing prices and making “efficiencies” but essentially, with the exception of an updated product range, when you enter their shops you might as well be stepping back ten years.

The high street is doomed.

But wait!  There is a new breed of high street shops that don’t seem to be declining.  In fact they are filling up the empty shop-fronts with bold new offers.  They include shops like Hollister, Build-a-Bear, and countless beauty emporiums. There is nothing new in the type of products they are offering – we are still buying clothes, toys and lotions as we always have – but  the way these companies sell them is different and they are expanding as quickly as others are falling around them.

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