2020 was a year like none other for London. Empty shops, empty streets, it just wasn’t the buzzing metropolitan city everyone knows.
The pandemic took the world by storm, and most, if not all, of the players in the economy were caught off guard. Among the different sectors, retail shopping has also suffered a harsh blow.
The lockdown regulations meant the London high street was deserted for months. Even after the vaccination drive has begun in the UK, the market hasn’t picked up a normal-like pace yet. And big online fashion retailers like ASOS and Boohoo are buying department stores like Debenhams.
Local shops, however, have had a different experience. The sudden lockdown meant they were left with unsold stocks and little to no savings. But financial barriers to entering the online scene were minimal, and they swiftly shifted to the world wide web.
Many have miraculously fared better than their high street counterparts. Some of these smaller players have made more money in the past ten months than they ever thought possible.
So, is London high street shopping dead?
Will the smaller businesses be able to maintain their growth streak?
Who will be the ultimate winner post-pandemic?
Before we find that out, let’s take a look at where everyone stood before COVID.
Ecommerce is not a COVID period trend. It has been here for since long. And was anyway expected to take over the shopping scene with or without the pandemic. Online sales made for 2.8% of total retail sales in November 2006. That was when the shift was just starting.
Since 2007, 556 retail businesses have crashed, and 39,100 stores were shut down. All because shoppers were shifting online.
This is a clear indicator of the fact that the online switch was catalyzed by the pandemic, for sure. But it cannot be wholly attributed to the invisible virus.
The revolution was already underway, and the pandemic only made it quicker and more noticeable. The high street was surviving only on the lean thread of customers being habitual of going out and splurging.
The Pandemic – Wreaking A Unique Havoc
The pandemic did not have the same effect on all businesses.
The flagship stores on the London high streets like Oxford high street department store giants Debenhams suffered the brunt of government-induced shopping patterns. People stopped going to high-end stores. This was both due to the lockdown and reduced income levels for many. The visitors to luxury brand stores disappeared. And shopping became a largely localized or online phenomenon.
The smaller shopping centers in the suburbs, however, bounced back from the initial shock. Sooner than expected. The need for essentials made sure they didn’t remain out of business for long. And there was a new wave of entrepreneurial spirit.
The first few months were tough for everyone. But soon, businesses realized what they needed to stay functional – go online.
The havoc that was created became increasingly lopsided. Brick and mortar stores (on the high street) were succumbing to pressure. And local online sellers found the light of a new day.
London High Street Shopping – Stumbling Against Pressure
At the start of the pandemic, the bigger businesses had comparatively more resources and buffer funds to survive the lockdown. But the extended periods of no footfall left them with high rents and overheads to pay. With no guarantee of ever seeing customers walk in.
This led to the dramatic shutdown of several of the older high street stores.
Iconic high street brands like Arcadia Group are struggling to stay put. Miss Selfridge, Dorothy Perkins, Topshop, and Topman have already been up for sale, purchased by online retailers.
Departmental stores have also suffered a setback. John Lewis, for example, has halved its store capacity at their Oxford High Street shop. Another high street giant, House of Fraser, will soon be partly repurposed as a gym and will house offices too.
Oddbins, Brighthouse, Cath Kidston, and several others have gone into administration.
The future for the high street seems nothing but bleak. Their charm is fading, and it looks like the new normal has little place for their glitz and glam.
Local Online Shopping – The Unexpected Shift and Success
When the lockdown was announced, the local shop owners felt like they had no chance of survival. They had nothing to back them up.
But the misery was short-lived. As soon as the first phase of lockdown was relaxed, people flocked to the local shops in their London boroughs. And even before that, local businesses had started going online.
People needed the essentials. And instead of going all the way to the high street, going local made more sense. Local shops, including florists, eating joints, and many more, starting to be available online added to their growth trajectory. But other than online shopping trends making things better for local store owners, they also had their ability to offer a personalized offering to thank and reinvented their services by offering deliveries of baked goods or flowers for example.
Those who didn’t change went out of business. But those who did found new paths to success.
With that and a marked shift in Londoner’s shopping patterns, it is safe to say that a new era has been ushered in for the small London businesses. Especially those who dared to go online. This has been a small silver lining to the pandemic.
A report by the Mayor of London together with the UCL shows that London Councils are now working on regeneration plans of their high streets such as in Church Street, started by Westminster City Council over the next 15-20 years. The focus is on retaining the community value through the transition and they are using technology through tracking systems to give them an interactive record of their high street shop occupancy so the council could better understand the social and financial value businesses provide and encourage a proactive and innovative curation of commercial units, according to the report.
The ultimate goal is to understand better how the high street provides economic value, commercial value, social and environmental value.
The Post-Pandemic Winner…
While smaller London businesses could reach the customers with just a website and a van for home delivery, things weren’t all rosy. Online fulfilment costs four times as much as fulfilment from physical stores. A few businesses did flourish, but most just managed not to fail.
This means that for small businesses to survive, there must be a price correction. It is an almost inevitable economic phenomenon that will start unfolding soon. And the price correction will bring with itself inflationary pressures on the economy. This means more trouble for high street sellers.
This could make British cities like London look like doughnuts. Hollow center and an inviting periphery. The city centers and high streets would stay barren. And in the suburbs, local shops will bloom.
However, the key to success lies in a personalized customer experience.
The smaller players already have that advantage. But if the bigger players can figure out a way to go local and leave the high streets to find a space online or in the local neighborhoods, they might be able to revive.
Until that happens, it is obvious that post-pandemic we will have a clear winner…
The local businesses that managed to go online and offer a personalized experience.