Opinion: Why Amazon’s Whole Foods deal doesn't herald online to offline shift

While there is some change in this direction, I would be wary of reading too much into this development.

Over the past decade, the shift to online shopping has put the retail property sector under enormous pressure. With current consumer demand basically flat year-on-year, the shift to online is placing those retailers with mature store estates in a financial vice.

More and more retail chains have more and more stores that are now either marginally profitable or providing a negative contribution. The situation is unsustainable and is affecting a number of famous names on the high street today.

So any hint that online needs offline stores is seized upon as an indicator that the consumer will be moving back to the high street, and that somehow retail property will start to increase its share of consumer spending.

No high-street resurgence

My view is that this is not going to happen. The next generation have grown up looking for everything online or on mobile and they are not about to break their habit and visit the high street when they have other more important things to do on a Saturday.

The successful consumer businesses in the future will be digital organisations with stores, not retailers with a website and a mobile app.

I wouldn’t dream of second-guessing Amazon’s intentions for Whole Foods, but it is a neat way to gain a better understanding of the grocery market.

Even at $13.7bn (£10.7bn), it is cheaper and less risky than buying one of the mega-supermarket chains.

“Some product categories do lend themselves to having a physical presence, even though they may have started purely online”

Some product categories do lend themselves to having a physical presence, even though they may have started purely online.

It can be helpful for the consumer if they can sit on a sofa or lie on a bed before buying, but Loaf.com and Made.com will only open a limited number of stores.

Mister Spex started as an online pureplay based in Berlin selling prescription eyewear, contact lenses and sunglasses.

Recognising that prescription eyewear is a complicated process needing the details of the customer’s prescription, Mister Spex formed a relationship with 300 partner opticians across Germany.

The customer could get his or her eye test free of charge provided they ordered their frames and lenses online from Mister Spex.

The company has now started opening stores, but the design of each branch is orientated around the digital processes, not the traditional physical opticians’ world.

Why compromise online success?

In the fashion sector, there is still a lot of comment on whether the pureplays will open stores.

However, when you have a business that is growing so rapidly with a pureplay model and the consumer doesn’t see the absence of stores as a barrier to purchase, why do you want to complicate matters by opening stores where you require a series of disciplines in which the company currently has no expertise?

“Why do you want to complicate matters by opening stores where you require a series of disciplines in which the company currently has no expertise?”

You can always open shops later.

At Boohoo, we are forever being asked to open stores. However, Boohoo’s ‘test and repeat’ model doesn’t lend itself to physical shops.

For decades in stores, fashion retailers have presented ranges or ‘stories’ eight to 10 times a year, but online, Boohoo is presenting and merchandising ‘items’.

With only six weeks’ stock in the business, this really is fast fashion.

Speed and access are everything

Not having a daughter, I was amazed to find that a 16-year-old girl will happily pay a £4.99 delivery charge for a £12 dress, just so that she can leave her decision until Thursday as to what she is going to wear on a Friday night.

For Boohoo, the latest fashion and the speed of access to it are the king and queen of the business.

The conclusion is that although some of the new ecommerce enterprises will open some bricks-and-mortar stores, they will never make up for the number of shops the large chains will have to close just to stay in business.