Robert Peston reported on the BBC news recently that the latest unemployment figures had gone down again, that the Bank of England had left interest rates unchanged at 0.5%, that inflation was around 2% and the economy was in recovery generally.
Peston was interviewing people on the street in a town in South Wales and asking them if they had personally seen any obvious improvement in their finances/job security and whether they were feeling more positive for the future. Several respondents pointed to all the empty shops on the high street and said it was as a result of the recession. But are our economy indicators outdated?
Internet shopping has risen exponentially by roughly 12% per year for the last 5 years, and in 2013, 72% of all adults bought goods or services online, up from 53% in 2008*. While younger age groups have traditionally embraced Internet shopping (92% of 25 to 34 year olds), there has been significant growth in the rate of online purchasing by those aged over 65. Over a third of those aged 65 and over bought online (36%) in 2013, more than double the 2008 estimate of 16%.
Should we assume that the above has nothing to do with the demise of 60% of the small high street shops? A shop on the high street has a finite area from which to attract customers and also has to pay exorbitant business rates and staff wages, repairs, renewals etc. If you move a business online, you instantly have the whole of the UK and potentially the whole world as potential customers. Furthermore, if you outsource your fulfilment, you can even manage all your orders from the comfort of your spare room!
Using a fulfilment house means you pay only for what you use, in terms of storage space, pick-pack staff, order and inventory management and fork lift trucks. These methods can be very effective for the right product. Clothes were the most popular online purchase in 2013 and bought by 47% of all adults. If you see our blog on Drop Shops, you’ll also see how easy it could be for your customers to return items using warehouse fulfilment.
Considering the facts, it’s much more likely that the success of online business rather than the recession that has led to retailers leaving the high street. It’s comparable with the closure of Butchers, Bakers and Grocers shops when the Supermarkets rolled into town in the 50’s and 60’s.
We constantly reinvent ourselves and the way we do things with the rise of technology. It could soon be that a UK customer can order an item from a business in Australia and specify a 24 hour delivery – and get it. Better get in there first and keep the UK economy going if you ask me.
- Source: http://www.ons.gov.uk/ons/rel/rdit2/internet-access—households-and-individuals/2013/stb-ia-2013.html