Reinvention is only way to survive on the new high street
IF ANY shop is a bellwether for the high street, it is John Lewis. And business there is pretty atrocious. In just six months the partnership managed to lose £ 635million. No wonder John Lewis has announced that six of its department stores will close for good, including its flagship store in the centre of Birmingham which only opened, with great fanfare, five years ago.
Other stores will including the one in Street, parts of which turned into offices.
As for Waitrose, the middleclass’s favourite supermarket which forms the other half of the business, things are not looking terribly bright either. While food shops generally prospered during lockdown, Waitrose recently suffered the indignity of being dropped by the online supermarket Ocado, which is now selling Marks & Spencer food instead.
I certainly don’t envy Dame Sharon White, who has been dropped into the job of running the once- mighty John Lewis just at the wrong time. Her recent appointment as chairwoman raised eyebrows because she had no retail experience. But she would need more than just retail experience to make a success out of a department store chain in the current climate.
Its competitors haven’t doing too well either.
Lshrink, Oxford will be been
AST month, Debenhams cut 2,500 jobs and appointed a liquidator just in case. Beales went bust in January, before the pandemic. One of the few bright stores in the sector is House of Fraser, which forecast a 30 per cent rise in profits this year, after restructuring. Even so, its new owner, Mike Ashley, says further stores may have to close.
It is a sign of just how deep is the shift in retail habits. John Lewis’ sales figures say it all. While in- store sales inevitably collapsed during the shops’ enforced closure, online sales were up 73 per cent. They now account for 60 per cent of all sales.
There is no use trying to resist the trend towards online sales, which is why Dame Sharon says John Lewis will from now on adopt an online- first policy. While many of us might express our regret when a favourite store closes, physical shops are suffering because of the decisions each of us make every day. Buying online is often so much more convenient, cheaper and gives us a wider choice.
As just one small example, I used to buy my lightbulbs in John Lewis. Once, however, it didn’t have the right bulbs.
Instead, I found a dedicated online lightbulb store with every lightbulb under the sun available for instant shipping – and cheaper too. I will never buy another lightbulb in a shop.
The success of John Lewis’ website might sound encouraging, but no retail chain can instantly switch from being a successful bricks- and- mortar business to being an online one.
If you employ 80,000 staff, most of them trained as salespeople, they can’t simply be transferred to jobs in website design or running a distribution centre.
Moreover, it is impossible for a retail chain to know for sure how many of its online sales are driven by the presence of its high street stores. When John Lewis gets an online order, how can it tell if the shopper bought the item because they went to its website or because they had first seen it, even tried it on, in their local store?
I am sure there are clever ways to estimate the relationship between store visits and online sales – such as by employing cameras and sensors to detect the items people are
looking at in- store. Even so, closing high street stores is a huge step into the unknown that could all too easily damage John Lewis’ online sales, too.
Yet for all the doom on the high street, I suspect that the death of physical stores has been exaggerated. In 50 years I am sure there will still be shops, even if they look different and there are not so many of them.
I don’t like ordering clothes online unless it is a duplicate of something I own already.
WHEN I wanted a suit I went into town so that I could try many of them on in quick succession. I don’t want to order a lorry’s worth of suits and then have to send back the ones which don’t fit.
The future, I am convinced, lies with what the industry calls “multi- channel retailing” – where we use shops as showrooms, buying a limited amount of goods directly from them but otherwise ordering online.
The shops which do best will be those which master this balance the best. John Lewis may one day prosper again, but like all retailers it is going to have to employ a lot of skill and judgment to save itself.
‘ There is no use trying to resist the trend towards online sales’