People have long talked about the demise of the high street. Retail chain after retail chain has closed as more and more people have bought things from the internet rather than from shops.
But something interesting happened this past year. There were far fewer shop closures. At Christmas you could see people flocking to the high street once again. Shop sales were increasing rather than decreasing.
Vibrant products and multi-channel shopping
Let’s dig deeper. If you analyse the retail winners, you will see they were retail chains that offered a vibrant, attractive and varied product range. But they also offered a multi-channel way of shopping. You could purchase online. Or you could check products via the internet and then buy from stores. Or you could just buy from stores.
Take Next (LSE: NXT): it has a fluid and user-friendly website, it has glossy catalogues, and it also has attractively presented shops. The whole experience from click to brick is seamless and enjoyable. And the product range, whether you are talking about clothes, furniture or homeware, is market-leading.
Or take Dixons (LSE: DXNS): it has an impressive website, and its stores are spacious and welcoming. The variety of products can’t compare with Amazon, but Dixons has figured out that it doesn’t need to. Instead of offering all the products the internet offers, it simply offers the best, at a competitive price.
Then there is Supergroup (LSE: SGP): it is perhaps the designer label of the moment, and its products are beautifully designed and branded, its shops are the height of cool, and an increasing proportion of its sales are made through its website.
The share prices of these retail winners have been rocketing
The share prices of these companies show how this integrated approach has won increasing numbers of customers, and sent profits rocketing. Since its Great Recession lows, the Next share price has increased 7-fold, the Dixons share price has quadrupled, and the Supergroup share price has tripled.
People used to say that computers and the internet would mean the demise of television. They were, of course, wrong. In the same way, the internet won’t mean the demise of the high street. Instead, the high street is an integral and permanent part of the retail landscape.
Have you noticed that Apple and Samsung are opening increasing numbers of stores around the world? No matter how all-pervasive the internet is, people will always want to touch, feel and experience products. And they will always enjoy the experience of a day out shopping. But in this world of ever-increasing choice, the most successful retail chains will seamlessly weave together high-street stores with the internet.
