During Enterprise Week, Peter Williams, ex CEO of Selfridges and currently Chairman of two online retailers’ boohoo.com plc and Mister Spex, shared his interpretation of the evolution of retail and the trends that are affecting the industry in today’s online world. He explained…
Retailing first started with individuals selling their wares in local bazaars and markets which were the central meeting places for those communities and still, in many places around the world, the local market is the most active and concentrated shopping area within a neighbourhood. As commerce grew, traders moved into fixed locations, properties developed into streets that then got covered over to create shopping arcades leading eventually to the evolution of department stores. These physical shopping experiences have spread around the world only to be supplemented by the arrival on online shopping.
In the 1900’s shopping was a chore and the wealthy sent someone else to shop. Then it was much more bespoke, a daily activity based on immediate requirements and tailored to individuals and their households. The rise of department stores transformed the chore of shopping into a leisure activity by encouraging browsing and providing pre-packaged and ready-to-wear items to be chosen or ignored at will.
Although shopping had become a leisure activity it was tightly controlled by the retailer. Decisions on opening hours, items for sale, method of payment and availability were all made by store owners However, the rise of internet shopping has blown that traditional retail model apart.
Consumers are now in control of when, where and what they shop for. They can undertake extensive research in order to choose the exact item they want to buy, they do not mind who sells it to them, they do not care where it is distributed from, they can find the best possible price and they want multiple delivery options. Most importantly they want to be able to shop whenever they choose.
For savvy retailers, the internet has become the best place to offer consumers all manner of technical and product information and overwhelming levels of choice. It creates a platform for innovation such as allowing consumers to creating avatars of themselves on which they can interchange clothes to see how they look together before they buy. Perhaps most disruptive of all is the speed at which online retailers can grow their market share as they need very little physical infrastructure but have the digital ability to reach a worldwide audience.
However, even though the internet is used by every generation the physical store still has its place. We still want leisure time and shopping is a big part of that so whilst traditional retailing is not growing in the UK it is changing – to mix of on and off line.
So what for the future of retail? Weaker retailers without a good proposition have or will go to the wall and others will take their place; major retailers will consolidate their estates and be concentrated in high population areas; outside urban centres where rents are falling young, innovative retailers will have their place; value will no longer be created only through price but also through good customer service; availability, flexibility and speed of delivery are essential for consumer loyalty; growth will come from online international expansion.
Most importantly of all, we will all still love to shop!