The high street fightback continues

High streets are fighting back against the continued threat from retail parks and online shopping, with increasing evidence that shoppers are recognising the value of their local stores.

Shoppers galore on this high street

Following the Retailinsider.com story earlier this week 'Shoppers desert retail parks for the high street' further research to prove that a high street renaissance could be taking place has emerged.

The Centre for Retail Research (CRR) weighed in with its findings from 13 areas within the UK to conclude third-rate retail parks could become housing estates in the future.

This radical view was based on its research, which found 10% of city dwellers now shop locally three times per week compared with only once a week three years ago, and that they now only do a 'big shop' every three to four weeks.

It also found that although discounters were starting to appear on retail parks [Retail Week news story], their favoured location remains on the high street where they enjoy the highest footfalls, a good mix of prosperous and poorer people, as well as regular bus services.

You can even get mountain bikes for a quid at Poundland

The rise of the discounters and their traditional high street locations is having a major positive impact on town centres, that's for sure. And this looks likely to continue, according to research from grocery experts IGD, that found a net 24% of people expected to be using such stores more often by 2012.

The research also found: 23% of people reckoned they'd be using specialist stores more often; 16% suggested they would be frequenting neighbourhood shops more often; and 19% stated they would be visiting farmers' markets (which are often located in the centre of towns) more often by 2012.

This is not to say there won't also be increased use of the internet (by 22% of the people, according to the survey) but it does suggest that a mounting body of evidence is emerging that highlights how the game is thankfully far from over for the UK high street.

High street retailers clueless about their customers

Did you know  that home shopping and online-only retailers spend a significantly greater amount each year on IT compared with any other types of merchants. In some cases more than three-times as much.

Home shopping retailers spend more in this stuff

The recent IT in Retail Research report from Martec International for sponsor BT Expedite revealed that non-store retailers have an IT spend the equivalent of 3.5% of their total sales, which compares with an average of only 1.1% across the whole industry. For grocers it is as little as 0.7% and for large format speciality stores it is 1.2% of total sales.

But why exactly? Martec put this higher spend down to the fact that "typically home shopping retailers do a lot with their customer data in terms of personalisation/targeting/suggested selling etcetera, which store-based retailers don't do because they mostly don't know who their customers are (by names and addresses)".

Get to know your customers

If they don't know them by their names and addresses then it must be assumed that these people can't be targeted with relevant offers. Since many of these retailers will be multi-channel operators (that also have an online presence and maybe catalogues too), they are clearly clueless about how their customers shop across channels.

This is worrying because retail success in the future will arguably revolve around utilising data. There is ever increasing amounts of the stuff being collected and it can provide retailers with great insight into their shoppers, which can then be leveraged into targetting them with relevant marketing. This can ultimately convert them into high-spending loyal shoppers.

Retailers do at least appear to be on the case as the Martec/BT Expedite report also showed that high levels of funding are expected to be committed to e-commerce and multi-channel projects in 2010/11.

Among the non-food retailer subset, e-commerce was the top investment priority with 24% stating it was their key focus. For all retailers it was second with 17% giving it top priority, whereas the main focus was on store systems, with 22% of retailers stating this as their number one priority. [For a fuller write-up of the report take this link to The Retail Bulletin].

Until this spend fully translates into high street retailers knowing a lot more about their customers then the situation will remain as such: home shopping retailers might be the store-less ones but they are certainly not clueless when it comes to their shoppers.

Shoppers desert retail parks for the high street

For many years the high street has been a victim of shoppers' predilection for visiting retail parks and as a result has suffered a spiral of decline as sales have dwindled.

The unique attractions of retail parks

But for the first time in many years the footfall trends show the high street performing better than the retail parks. According to Experian Footfall data retail parks experienced a worrying decline of 2.7% during July, compared with a lesser 0.6% fall recorded for the retail market as a whole.

In sharp contrast, BDO found that like-for-like sales on the high street were up by a healthy 5.8% for the week ending August 8. Admittedly these are stats from two different sources and covering differing periods but it is still an interesting trend that seems to have emerged.

Maybe we are seeing the leisure shopper staying at home for the first time, after many years of driving down to retail parks for their weekend entertainment with the family and spending the whole day dishing out the dosh on loads of disposable items.

Another successful retail park trip

Whatever the reason, this switch around in the fortunes of the parks and the high streets will probably be only temporarary as there are many issues that town centres and their local authorities need to address before we really see a renaissance in shopping on the high street.

Amazon over-hyping e-book sales

Amazon's recent statement about how massively successful its e-book sales were going should be regarded with some scepticism.

The online giant, which has much riding on its Kindle e-reader device, made the grand revelation that e-books were now outselling hardcover versions. But what it didn't say was that these 'sales' also included the books it allows its customers to downoad for free.

Amazon: looking to get rid of this paper

Take a look on the Amazon.com site and you'll find lots of free books listed including plenty of classics from the likes of Charles Dickens. It's hard to imagine that these don't account for a decent chunk of so-called e-book sales. Since Amazon operates in a rather opaque manner it is highly unlikely that we'll be given the split any time soon.

Care must also be taken with the statement Amazon made about the growth rate of e-books tripling in recent weeks. This should not be confused with a tripling in the sales of e-books. For the non-mathematicians out there, let me tell you that these two figures would differ dramatically.

Jeff Bezos: fondles Kindle

It is likely that e-books will have their place in the market, especially now Amazon is having a decent level of success with its Kindle reader now that it has dropped the price of the basic model to $139 in the US and a little over £100 in the UK.

But the business should try and tone down its rhetoric a little if we are to believe anything it utters about its e-book and Kindle activities.

The major players in Multi-channel/e-commerce

If you have half a brain then you know that multi-channel and e-commerce is where the real action is within the retail sector.

That's why Retailinsider.com and sponsors K3 thought it a good idea to conduct a survey across the sector to find out who the movers and shakers are in this part of the industry. A slightly more detailed explanation of the survey process can be found on the Retail Systems website.

We've come up with a Top 70 list of the key players, which will be revealed on September 15 at the Retail Systems Multi-channel Retail Conference.

But that seems a long time away so as a taster of that long-list we can reveal a Top 20 selection that is listed below. It's in alphabetical order because deciding who is more important than the next person would have been a nightmare that Retailinsider.com was unwilling to undertake.

The Top 20 with a brief snapshot of each constituent is as follows:

1. Jeff Bezos, founder + Brian McBride, managing director – Amazon.co.uk
Bezos is the pioneer of online retailing and continues to push Amazon into new categories. McBride has run the UK operation since 2006 having joined from T-Mobile.

2. John Bovill, group IT director + Hash Ladha, group multi-channel director – Aurora
The bit is between the teeth at Aurora (owner of Karen Millen, Oasis etcetera) to develop the business into a multi-channel operation with Bovill and ex-Asos director Ladha heavily involved.

3. Andrew Curran, co-founder + Sarah Curran, co-founder – My-wardrobe.com
The complementary skills of the Curran pair have helped build My-wardrobe.com into a dynamic growing fashion business that recently secured £6 million of funding from Balderton Capital.

4. Andy Ferguson, head of multi-channel - New Look
New Look is one of the rising stars of multi-channel retailing, with traffic numbers rivalling Asos, and Ferguson is integral to its progress to date and in the future.

5. John Gallemore, chief operating officer + Matthew Moulding, CEO – The Hut
The Hut has quietly been built up as an online platform for Tesco, Dixons and WH smith but under the guidance of its co-founders Gallemore and Moulding it is now also operating its own sites including Mybag.com and Zavvi.

6. Clare Gilmartin, managing director – eBay UK
As eBay attracts growing numbers of retailers to sell their goods on its Marketplace the role of Gilmartin in UK retail will become increasingly important.

7. Ben Gordon, CEO – Mothercare
Mothercare has been transformed into a multi-channel business under the leadership of Gordon with in-store internet ordering a key feature.

8. James Hart, e-commerce director + Nick Robertson, co-founder – Asos
As e-commerce director and 10-year Asos veteran Hart is vitally important to the business. He compliments Robertson whose mix of entrepreneurial drive and trading nous has helped change the landscape of online fashion retailing.

9. John Hinchcliffe, marketing director + Alan White, CEO - N. Brown
With a strong focus on the customer relationship N. Brown is being transformed from a catalogue company into an online (and recently shops) powerhouse with Hinchcliffe and White the key drivers.

10. Guy Hipwell, managing director of online – Liberty
Experienced operator Hipwell has been involved in dotcom-land since his time at zoom.co.uk in 1998. Via Arcadia and Harrods he has now landed at Liberty with responsibility for online and the supply chain.

11. Mark Hodgkinson, digital and financial services director + Doug Gurr, executive development director – Asda
Gurr is regarded by some as brilliant and will probably pop up one day as CEO of a FTSE 100 business. He set up online wholesaler Blueheath and is now developing multi-channel at Asda, ably assisted by ex-EMI man Hodgkinson

12. Natalie Massenet, founder and executive chairman – Net-A-Porter.com
Overcame the naysayers who said luxury and fashion would never sell online to build Net-A-Porter into a business that sold for £350 million to Richemont.

13. Simon Pritchard, group e-commerce director – Arcadia Group
Joined Arcadia in late 2009 and is in the process of developing its internet business through the experience he gained at DSGi.

14. Steve Robinson, CEO – M and M Direct
Robinson has helped to change the business model of M and M Direct from a catalogue business to online and in the very competitive market of discount clothing. He previously set up Tesco Direct.

15. Michael Ross, founder – eCommera
Another of those rare beasts that has worked across multiple online platforms, Ross helped set up Figleaves.com before consulting for Baugur Group. As director of eCommera he works with and advises many retailers.

16. Simon Russell, head of multi-channel – John Lewis Partnership
JLP is making inroads into creating a true cross-channel business and Russell is integral to the decisions like attributing online sales to stores and Click & Collect.

17. Robin Terrell, executive director of multi-channel and international – House of Fraser
One of the most experienced players in the industry having worked across numerous platforms. At House of Fraser he has set the objective of generating 15% of revenues from online within three years.

18. Mark Newton-Jones, CEO + Jonathan Wall, director of online - Shop Direct Group
Newton-Jones has turned around what was the troubled Littlewoods catalogue business into a multi-fascia online operation. Wall brings vast experience from his time building up Dabs.com before its sale to BT.

19. Laura Wade-Gery, CEO + Nick Lansley, head of R&D – Tesco.com
Wade-Gery sits atop the biggest business in its field and has been at the helm of Tesco.com through massive growth in both grocery and non-food. Many of the cutting edge ideas come from Lansley who blogs at Techfortesco.

20. David Walmsley, director of e-commerce - Dixons Retail
Having taken John Lewis to another level online, Walmsley was brought in to Dixons in 2009 to use his strong technical abilities to overhaul its online operation that is crucial to overall group success.

We'd be keen to hear your thoughts on this short-list - regardless of whether you think it's a load of old tosh or whether you agree with the inclusions. Send your comments direct to this website or email glynn@busicomm.co.uk