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A report by the Centre for Retail Research (CRR) has warned that by 2018 online retail sales will rise to 21.5% leading to the closure of some 22% of high street shops. Among the casualties will be 164 large or medium sized companies which will face administration and those which survive will only do so at the expense of closing many of their outlets.
Shops most at risk are those specialising in goods which shoppers are most likely to be happy buying “sight unseen” online. These include music, books, cards and stationery as well as health and beauty items. Interestingly the report estimates that businesses with a strong online presence now only need to operate 70 stores to establish a national presence, compared with 250 in the mid 2000’s.
Whilst the report admits that the UK is facing a shopping crisis it does hint that the solution will come through radical changes being made by retailers, town centres and the government to preserve what is best in retailing. In addition the report says that “retailers have to make clear strategic responses to the changing patterns of how consumers shop.”
We have recently been highlighting the way in which a move to an innovation culture in which the “how” is more important than the “what” and which puts the consumer at the heart of every process is driving business profitability. Providing a mix of shops running alongside online retail with processes geared to consumer preference may not save all of the predicted closures but it may eventually result in the saving of our town centres.