Are customers killing the high street?

Cash strapped punters are using technology to search for ever better deals, and those firms which don't adapt may find themselves in trouble.

by Elizabeth Anderson
Last Updated: 06 Nov 2012
That was the theme of a discussion hosted by MT and sponsored by Accenture at Cass business school on Tuesday. ‘In a multiplatform world, firms need to be tightly integrated. If prices in the store don’t match its price online, then customers aren’t going to be happy’, said Visa Europe’s managing director for growth and emerging markets, Mark Antipof.

As the last year has shown, the high street is taking a battering. Game Group is the latest retailer to announce it’s on the brink of administration, as it juggles sliding sales across its 600 UK stores and higher rents. If Game does go into administration, it’ll follow in the footsteps of high street brands Peacocks, La Senza and Past Times, to name a few.

Customers shunning high street goods for cheaper alternatives online is a problem many retailers are citing as reasons for their downfall. So how do you encourage customers to spend? Alan Giles, chairman of lifestyle retailer Fat Face and former CEO of HMV, agreed that retailers need to be wary about charging more in-store: ‘Smart phones are giving consumers the most informed shopping experience they’ve ever had. They offer complete price transparency’.

It’s an experience many consumers are becoming familiar with now – they’ll find an item in the store, but check whether they can find it cheaper online before buying. Figures from the Office for National Statistics show non-store retailing, primarily made up of internet sales, grew 13.3% in January compared to a year ago. That’s a much sharper growth than UK retail sales overall, which grew by 2% year on year.

Dan Wagner, the internet entrepreneur who founded M.A.I.D in 1984 which he sold for £330m to Thomson Reuters almost 20 years later, warned it’s not always the price of goods that’s putting people off: ‘Many won’t go to their local store because of the price of parking, or the inconvenience of yellow lines’, he said. ‘So there are some wider problems that need to change’.

The greater choice for customers has led to a change in retailers’ behaviour.  ‘Customers are becoming less loyal, so retailers have to work harder to keep them’, said Les Bayne, a senior executive at Accenture. ‘If a customer has a complaint handled well, they’re likely to go back’, agreed Vince Mitchell, professor of marketing at Cass Business School. And retailers are realising they need to tread carefully around customers. ‘Smart phones are becoming the remote control to people’s lives. If a customer isn’t happy, they’ll quickly let others know through social networks’, Mitchell added.

But if you’re on to a good product, Giles believes a high price won’t always put people off. ‘Great products will always trump value for money’, he said. ‘If it’s a really seductive product, then people will pay for it’.

Maybe retailers can learn something from Apple. The technology giant said today that pre-orders for the iPad 3 had already sold out, ahead of its release on 16 March. Clearly some consumers are happy to burn up to $829 (£659) on a gadget…

- MT hosted the discussion Customers in Control at Cass Business School. On the panel were:

Alan Giles, chairman, FatFace.
Dan Wagner, chief executive, Brightstation Ventures
Mark Antipof, managing director growth & emerging markets, Visa Europe
Vince Mitchell, professor of marketing, Cass Business School
Les Bayne, partner, Accenture UK & Ireland
Andrew Saunders, deputy editor, Management Today

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Upcoming Events

Latest on MT

'Don't be governed by risk' - Pitcher & Piano founder Crispin Tweddell's start-up cocktail

'Don't be governed by risk' - Pitcher & Piano founder Crispin Tweddell's start-up cocktail

The entrepreneur-turned-investor shares his recipe for success - know your customer and be ready to take a chance.

How Mike Ashley can fix Sports Direct's reputation

How Mike Ashley can fix Sports Direct's reputation

His company's name has been well and truly sullied, but Mike Ashley still has the chance to reform it, through transparency.

Get ready for the 'Lego' organization

Get ready for the 'Lego' organization

In a rapidly changing world, businesses will become amalgams of building blocks that come together for specific purposes.

Do you believe Elon Musk's vision of the future?

Do you believe Elon Musk's vision of the future?

The Tesla entrepreneur's 'Master Plan, Part Deux' could bring him up against Uber in the driverless ride-hailing market.

Corbyn wants small firms to report their gender pay gap too

Corbyn wants small firms to report their gender pay gap too

The Labour leader has launched his re-election campaign with plans to tackle discrimination.

Why social enterprises shouldn't consider profit a dirty word

Why social enterprises shouldn't consider profit a dirty word

Doing good and making a bundle aren't incompatible, writes Rhea Silva.