roaringmouse

Blockbuster is todays high street store that has gone into administration.

Over the last month this makes it Comet and Jessops who have shut up shop, and HMV and Blockbuster who have gone into administration with attempts to make them a going concern.

slapphead_otool

Retail is dying because:

1. Holding stock and merchandise is not cost effective,

2. Store front space in expensive malls is not cost effective.

3. The cost of shop assistants to demonstrate and sell the product is high.

The problem is that at the moment prospects examine the goods in store then buy on line. They get the tactile feel of the conventional retail process, and then make the purchase on the internet based upon price.

This is a much bigger problem than most people realise, and manufacturers are working out new sales channels to respond to it.

knockoff nige

I wish they were doing that over here, rather than just expecting the government to make some changes (such as gst changes) to bail them out. If people want to shop online, then thats the future.

Retail stores will always have suckers like me as a customer though. I'm impulsive and I don't like to wait for something when I've decided I want it. I was doing some review reading on some headphones recently, decided on Bowers and Wilkins P5's. Thought I should try them out first. Went into JB Hifi and agreed that they were awesome. I saw they were cheaper online in some stores so I walked out of JB Hifi ready to go home and buy online. I made it to the car before I turned around and bought them from JB Hifi telling myself that shipping costs would bring the price within the same range and I'd prefer to have them now. I don't regret the purchase as they are excellent and have a store I can bring them back to if they give me trouble. But I am a total idiot with money. Blame people like me for keeping Harvey Norman in business so long (although I've never bought from there).

Zen10

Good point about commercial rent. Severely unaffordable housing is a common complaint but people rarely think about commercial rent. I know someone in the UK who has a shop of around 15 or 20 square metres and he pays £1500 per month, or used to, many years ago. In his case his business is subsidised by his very rich in-laws, but if not, he'd be finished.

slapphead_otool

Online shopping will decimate the high street concept that has existed for thousands of years. It will rip the heart out of cities and towns.

One problems is how do manufacturers demonstrate products and provide the essential "touching" experience?

One potential solution is to use "Product Champions" – people who demonstrate the product, either formally or informally, to provide that tactile experience. They get free use of the product and a small percentage if the prospect buys online.

How many times do you get your new model phone out to have people ask you what it was like, ask if they could handle it etc? The sales are done inline, the demonstrations are done via contacts through social media.

knockoff nige

Apple seem to have made it work for them. You can try and buy in store or you can buy online, with free shipping. Maybe thats the way.

GarryP

If retail is to survive, then rents are going to have to drop, be subsidised even. At the moment you pay the property owner, and then the government (at least in the UK) for the privilege of being inherently unscalable, geographically limited, and stock constrained. Hell, turning your garage into a store for stock and selling online is a much better bet for the prospective merchant, or just go drop ship.

Personally I'm wondering how long it is before the personal services shops realise that sticking their 'shop' in the back of a van and going mobile has less overheads, better reach, and they to desert the malls. Couple that with online/out of town supermarkets and by 2020 I don't see the high street or conventional malls existing at all.

Interesting times.

Zen10

A lot of people go into high street shops just to sample/feel the products, then go home and buy online. A good example of this is books. We have done this ourselves because the book market in Australia is rigged and books are unaffordable.

I wanted a philosophy book and went to a book shop in Adelaide CBD. It was $50. My wife used an app on her iPhone to scan the book's barcode, there and then in the shop, and this app automatically ordered the book for us from Amazon ($17). It was probably in the post before we even got home.

Ergo, I agree with the prediction about high street stores being buggered.

Zen10

I agree, but remember that much of the online stuff is cheap not only because of fewer overheads but also the perennial problem of the products being made by slave labour in China. As Chinese GDP overtakes US over the next few years, this is going to remove cheap consumables unless we find somewhere else that will make our junk for peanuts....

oh yes, of course, why is it China and the US are all over Africa all of a sudden? Al Qaeda, they say... lol... gotta keep them house prices propped up.

knockoff nige

On the point of retail staff being expensive, why do some shops over here have so many sales staff? Walk into Teds Cameras on Pitt St and you'll see 6 sales staff for 5 customers. Are they all going to sell a camera that day? Unlikely. If I'm in a shop, I prefer to not be bothered by sales staff until I ask for it. I'm probably more likely to buy if a sale isn't being pushed on me.

slapphead_otool

Exactly. Apple don't care if you buy from the shop. Its still a sale of an Apple product. The Apple stores are really about product display an experience, not sales.

Its a new world.

ozzieeagle

Yehp high st property market will have to be under stress.

Zen10

I notice Dan Brown's new potboiler has an initial print run of four million, but the last one had one of six million. Partly this is because the last book wasn't as popular as Da Vinci, so they see a downward trend in his sales, but mainly it's because the publishing houses know so many more people will buy the ebook for their kindles, iPads etc and not the hardback.

Those were copies that book retailers would have been able to sell, but not any more.

slapphead_otool

The revolution is well underway in rural UK, where shoppers can drive to larger stores to save a few pounds. My hometown, once a thriving market town full of shops, is now 90% charity shops and antique stores. I was very sad to see it when I went back last year.

Its not much more of a step to go from driving to the larger stores to just ordering online.

Rural Australia, where the drive to a larger store is a hundred miles or so, will probably keep going.

But the small towns of the UK are going to have ghost high streets within 10 years.

Amazulu

What I noticed on my last trip to the UK, especially in the less well off areas, is that there are no longer any local shops - they've nearly all closed. There is now a small Tesco or Asda that has replaced all the small shops. I have no problem with this but all the boarded up or shuttered shops look really ugly and this spoils the area.