The Kindle didn’t kill books, and online retail won’t kill the British high street

There is talk among retail analysts that the John Lewis Partnership should abandon its price pledge to be “never knowingly undersold”, which dates back to 1925.

I would hate to be the person who retires the most venerable slogan in retail advertising, but I see why it now poses problems. In 1925 you could not find the lowest price in town with a few clicks of a mouse. Back then, service levels in stores were fairly uniform; today they vary wildly. Shouldn’t we expect to pay a little more to shop somewhere attractive with informed employees than when buying off a pallet in an understaffed shed?

But no article on Britain’s beleaguered high streets ever fails to mention the threat from online retailers. What they usually omit to mention is that many of them don’t make any money either. And, while John Lewis’s £25.9million half-year losses will be more than recouped by their Christmas profits, online retailers make little money all year round.

Investors’ readiness to accept tiny margins from internet businesses has created intense competition. But their indulgent attitude rests on the assumption that online retail will keep growing until it eclipses physical retail. In the UK, I think that is very unlikely.

Such an assumption may seem plausible if you are a retail analyst. Such people are probably male, live in London and are time poor – so online shopping is disproportionately

attractive. Anything that saves them five minutes is a godsend. But most normal people enjoy something called “free time”, in which a visit to a shop constitutes a pleasant divertissement.

And the unstated reality is that, in the UK, delivery to the home is an extraordinarily inefficient way of distributing most goods: unsustainable in terms of economics and road use. A combination of conventional shopping and click-and-collect is where the future lies. Amazon has essentially spent half a trillion dollars to discover that Argos was right all along.

We tend to overvalue disruptive technologies because we disproportionately notice their advantages, while being blinded to the virtues of the arrangements that preceded them. When the Kindle first came out, I naively assumed paper was dead: in fact, people have rediscovered their love of physical books. The same rebalancing act will happen with retail.

And there is plenty of room for highstreet retailers to innovate. You can now collect Amazon parcels from Next – the chain having found that people mostly go on to buy something else while they are in the store. A friend of mine uses a dry cleaner who now opens only between 5pm and 7pm. His trick? He texts customers the moment their clothes are ready for collection.

I tried to buy a television online the other day. I was faced with 290 pictures of black rectangles varying in price from £300 to £8,000. Call me a Luddite, but I got into the car, went to a shop and talked to someone who knew more about televisions than I did. Pervy, I know, but I rather enjoyed it.

Rory Sutherland is the author of ‘Alchemy, The Surprising Power of Ideas that Don’t Make Sense’

‘I tried to buy a television on the web the other day. I was faced with 290 pictures of black rectangles varying in price from £300 to £8,000’