The real impact of the web

Consumers are now only just experiencing the full force of the internet, explains Peter Williams

We have just experienced a seismic change in retail dynamics. 

10 years ago, a retailer could expect to achieve national coverage with 250 stores. Today, the same retailer only needs 150 shops plus a transactional website.

Certain economic and structural forces have contributed to this adjustment, in particular, the severe economic recession and a decade of increases in retail space, over and above the growth in consumer demand. However, it is the arrival of the internet that has made this change permanent.

Our shopping habits and behaviours are now different. My two sons grew up using the internet for school, university, socialising, sports updates, breaking news and – in the case of the eldest – gambling.

For their generation, the simple way to go shopping for something they needed or were inquisitive about was to click on the computer. They do not have the mental barriers that my generation has of, what happens if you are not in when the delivery comes, or how do you return the item if it doesn’t fit.

Now the rest of us are changing our shopping behaviour and no longer automatically go to the high street. I haven’t visited a shop to buy a CD for more than three years. Initially, I used Amazon, but now I subscribe to Napster. In the old days, I would buy a guide book to research holiday hotels – now I use TripAdvisor.

The internet experience is still in its infancy though and the shift from bricks to clicks will continue.

When I was chief executive of Selfridges, we longed to eavesdrop on the conversations two women were having in the coffee bar about their shopping experience and the dress one of them had tried on.

Now through Facebook, Twitter and its own blogs, Asos can intervene in those conversations and, if necessary, correct a problem.

Customers can share fashion opinions with an audience beyond just the sales associate who is trying to complete a sale.

Technology will remove more barriers to purchasing online. You will be able to upload a picture of yourself plus two dimensions – height and weight – place the clothing on your body and then make it move, turning the image through 360 degrees.

The retailer wanting national coverage will never go back to having 250 stores. Strong shopping centres and high streets will prevail, but what will happen in locations 151 to 250 where there is all this vacant space?   

As reality sets in, retail rental values may fall, which could lead to more individuals opening up their own stores. Ironically, a return to what the high street was when it was created.

From an economic and social perspective we will want these locations to recover. The solution though isn’t just about retail, as consumer demand is not sufficient to occupy all the space. There will have to be changes of use in many places towards leisure and residential.

Peter Williams is senior independent director at Asos