Digital Transformation & Evolving High Street Retail

Digital Transformation & Evolving High Street Retail


The digital transformation of our shopping experience and what that means for the future of high street retail

Before COVID-19, 1 in 10 high street stores stood vacant, and in some town centres this sits even higher between 20% and 30%. Whilst many publications have quickly pointed the finger at COVID as the primary reason for mass high street collapses of high-profile entities such as Arcadia Group, Debenhams, Thorntons, and Cath Kidston, the real issues started long before. The culling of the high street arguably started over a decade ago in 2008 with the shocking collapse of Woolworths, and then subsequent closures of stores such as BHS, Jessops, Jane Norman, Mothercare, and Thomas Cook. 

It’s no doubt that COVID-19 has accelerated the ‘death of the traditional high street’ as we know it and forced businesses to consider options to adjust and adapt through digital transformation. The truth is, the high street isn’t dying, it’s just evolving. Here’s a closer look at what’s happening, and what’s next.

The Decline of the Traditional High Street


Politics: COVID-19 and Brexit

Sir John Thomson stated that “the Covid-19 crisis will cause five years’ change to our high streets in less than 12 months”, and already we have seen such rapid changes. Retail has been one of the sectors most severely affected by the COVID 19 crisis. 2020 was the worst year for High Street job losses in 25 years with 180,000 jobs lost in the UK retail space (BBC, 2021), and these losses and store closures are expected to continue into 2022. If you add this to the uncertainty of what Brexit means for the retail sector in terms of supply chains and customs charges, it has been a turbulent period of time.

COVID-19, and the subsequent opening and closing of stores, has meant that many retail spaces, even when opened, have lost the ability to provide some of the services they relied on to really engage customers. For example, Boots and John Lewis could not, under COVID-19 restrictions, give beauty trial consultations as they were not allowed to share makeup, touch customers, or be within 2 metres. Makeovers and product trials were a great way to entice customers and demonstrate products in order to encourage purchases, but something that could not happen. Therefore the ‘special treatment’ and shopping experience was lost, which was damaging to brands because these extra services were often key drivers of profitability.

From a financial perspective, some businesses simply could not plan and manage the ever-changing COVID-19 landscape and rule changes. FMCG (Fast Moving Consumer Goods) operate predominantly on a JIT (Just In Time) basis so whilst there is some flexibility in the supply chain, closures with a day’s notice leave excess goods in the supply chain which leads to waste. This occurred mass losses for many businesses who were then unable to sell products they had ordered ahead of time.

Finally, COVID-19 has stopped us physically shopping for non-essential items, and people who have never shopped online before have now seen the ease and benefits of doing so, meaning they are likely to continue doing so after lockdowns are long gone. COVID-19 has definitely accelerated the change in customer buying patterns and behaviours, but this was not where the root issues started.

Changing Consumer Preference and Taste & Failure to Adapt

Customers are increasingly attracted to smaller, more personal stores which offer good quality products at a good price. Large shopping centres and huge department stores (BHS, House of Fraser, Debenhams) are much less attractive to consumers as they are often time-consuming to walk around and shop in, and usually expensive. People now expect a great shopping experience, that is convenient and timesaving to fit around busy schedules of work and childcare. Many businesses have failed to innovate to accommodate these preferences. 

Brands now need to be easily accessible online, but also need to create fun, memorable, or personal experiences in store in order to make your brand stand out. Additionally, marketing preferences shifted towards influencer marketing and social media. Some brands were too slow or reluctant to adapt, and therefore lost custom to more active and more visible brands, particularly targeting millennials and younger.

Rise of Internet Shopping & Failure to Digitise

The convenience of online shopping, especially from platforms like Amazon where you can buy multiple items from different vendors, all in one transaction at a good price, and get it delivered to your door, has really impacted the physical high street. As people are busy with work and children, the convenience of shopping from home, for everything from beauty products to house appliances, and groceries to entertainment. Shops with a limited online presence, or with poor UX and UI online will lose, and have lost, customers to more accessible and easier to use online platforms. 

In addition to this, there has been a huge increase in direct C2C business, whereby customers sell directly to other customers second hand, via eBay, Depop, and Facebook Marketplace. As many consumers become more eco-aware and financially-savvy, secondhand clothes and furniture has seen a big increase. This essentially cuts out the retailer altogether. 

Squeezed Wages & Lower Disposable Incomes

The volatility of the GBP since the Brexit vote has made imported goods more expensive, with those costs passed on to consumers. Couple that with the fact that wages have been rising at a slower pace than inflation - and shoppers have less disposable income to spend in stores and restaurants, and you start to see an obvious reason why customers aren’t shopping on the high street as much, when cheaper options prevail online. 

Changing trends such as online shopping and high business rates, were already causing issues in the retail space, but the burst in inflation since the EU referendum has squeezed incomes in real terms, meaning people have less money to spend on non-essential items.

Infrastructure & Parking

The nostalgic love for big shopping centres has ebbed away in favour of convenience. With development constantly ongoing across the UK, there is a huge squeeze on physical space, which means high streets are often really difficult to get to for those travelling by car. A lack of affordable, close-proximity parking has made securing a spot something of a lottery, whilst demand for space has only driven up prices for parking. Given this, most people would rather shop at home where they can be comfortable and avoid high parking charges.

Digital Transformation for Retail: What to Consider

Digital transformation is about more than just creating a social media page. It demands a complete shift in how you view your customer’s journey, how you market your brand, where you have a presence, and your overall experience. Here are some key things to think about.

  • Think of the customer experience. In person, friendly customer service on the high street is no longer enough of a differentiator. Whilst you can still continue this in-store, it’s important to go one step further and provide the easiest, smoothest, and most enjoyable experience online, as well as offline
  • Digital transformation is key. Be present online where your customers are. Replicate your shop floor online with a brand website and allow customers to do business with you online and off. This means you can meet your customers where they are and reach customers that don’t have easy access to a physical branch of your business
  • Digitise your customer service and replicate the human touch of your in-store customer service online, with all the efficiency and seamlessness that online retail can achieve. This could be through digital chatbots, chat and phone options direct to customer service, and readily available FAQ’s or community chats.

Summary: Has Retail been too Slow to Adapt?

Digital transformation does not mean you have to replace your physical shop with an online presence. It’s actually about augmenting your in-store service with your online offering. They should coexist and compliment each other, whilst also functioning independently. When I look back to retailers such as Toys ‘R’ Us, Debenhams, and House of Fraser as examples, it’s clear that the reason for these closures, may have (in some cases) been forced by COVID, but the initial problems started long before then.

Reluctance to invest in digital transformation, or adapt to consumer trends, behaviours, and habits, ultimately set some of these brands on the route to failure. And the failure of these brands, opened up huge opportunities for businesses at the forefront of digital transformation such as Boohoo (acquired Oasis, Debenhams) and Asos (who were considering purchasing Topshop) to really thrive and expand their empires. The way we shop, and the experience we now expect when we do go instore has completely changed, and businesses need to dive deep into customer research and be open-minded to change and digital transformation.

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What is clear is that COVID might have been the final nail in the coffin of traditional high street retail, but the reasons for it failing in the past decade supersede the pandemic and Brexit, and digital transformation and a complete refresh of high street retail is much needed to revitalise the sector.

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