There’s been a spate recently of major high street chains going to the wall. Of all the many reasons behind their demise, one stands out: their inability to compete with internet retailers. Retail, of course, isn’t the only business that is struggling to face the challenges of disruptive technology; whilst the death of newspapers may be greatly exaggerated, the printed word is battling with its online cousin as readers find both more convenient ways to consume and ways to avoid paying for content (even comment, it seems, is free). But the internet is, of course, an inanimate object. It is not the internet per se that kills off business: it is the behaviour of consumers and the environment in which they are able to shop.
The authorities are wrangling with businesses that use their global footprint to best advantage their tax. Likewise, many of these global businesses are importing and exporting, packaging and repackaging, across various domains with the effect of being able to offer goods at a fraction of the average UK high street price. Some might argue that this sort of behaviour is merely the reality of a global marketplace. Others might say that it is predatory pricing designed to put competitors out of business and, therefore, represents the unacceptable face of capitalism. Whatever the truth might be, the reality is that there is not a level playing field. The fayre is certainly not fair.
And what of consumer behaviour? Without a doubt, shopping online can be terribly convenient, saving both time and energy. But what is odd about some of the recent high street failures is that it is not the inconvenience factor that has killed them off but price. Often shoppers for certain high value goods will first go to the high street. They’ll spend time comparing various goods (cameras, for instance) and talk with the helpful and knowledgeable staff. They’ll make their choice, leave the store, go home and buy it online at a considerable discount, a discount only made possible by the existence of an unlevel playing field. Oscar Wilde talked about knowing the price of everything but the value of nothing. Curiously, shoppers do know the value of being able to compare different goods and of talking with well-trained, well-informed staff. However, like recorded music or copyrighted material, they’re just not prepared to pay for it.
It is very easy to come over all John Major (nostalgic for warm beer and cycling spinsters) about the high street, but our something for nothing behaviour has consequences. The drive to being the lowest cost operator sees big businesses giving payment terms to their suppliers of 60 (yes, 60) days and it is the small suppliers that are getting squeezed. The affluent middle-class may continue to patronise (in both sense of the word) the high street but it will need more than just the occasional basket shop. The authorities need to create a more even environment so that local businesses can compete more effectively on price. And, secondly, even in these penny-pinched austerity times, we all need to rethink our own price/value equation. Otherwise, it will be:
Who killed the high street?
I, said the mouse,
I was clicked inside the house
I killed the high street