This report reflects upon the issues and challenges currently faced by high street. It identifies the nature, scope and impact of the problems that high street is currently facing. SWOT and PESTLE analysis are conducted in order to develop understanding on relevant strategies that could be adopted to cope with challenges.
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The Decline of the High Street
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Introduction The purpose of this report is to reflect upon the issues and challenges currently faced by high street. This report is mainly focused upon critical analysis and evaluation of high street through identifying nature, scope and impact of the problems that high street is currently facing. Due to sudden outbreak of COVID-19, high street was dealing with issues of people's shifting preferences to online shopping. The concept of online shopping was emerging rapidly as it seems more convenient and cheaper for individuals to avail goods and services. In this report, SWOT and PESTLE analysis are conducted in order to develop understanding on relevant strategies that could be adopted to cope with challenges. It recommends suggestions and also discuss decision-making matrix in order to identify solutions along with planning and monitoring of implementation of decisions. Main findings This section will deal with definition and discussion of the problems explaining its nature, scope and impact. In addition to this, it conducts swot and pestle analysis for critical evaluation of its positioning and to develop understanding of macro environmental factors. Defining the problem One of the major and most critical problem that high street is facing currently is issue of shifting consumer preferences to online shopping. The implications of severe pandemic has caused individuals to avail the option of online shopping as during covid-19 there movement was restricted and it leads to changes in preferences(Millington and et.al., 2018). Nature-The main problem faced by high street is loss of people's engagement as they have changed their preferences and highly using online shopping to fulfil their requirements. Scope-The sudden and abrupt emergence of COVID-19 has created the change in consumer behaviour and made them avail goods or services through online platformswhich is significantly declining engagement of people in high street. The scope of this problem is broad as it is resulting in lowering of sales as well as profits implying problems of high rents and taxes(Turner and Corstorphine, 2020). The level of competition is getting tough and the extent of increase in local businesses taxes is compelling retailers, shopkeepers and restaurant owners to permanently wind up their shops resulting in financial downfall of the sector.
Impact-This problem is majorly affecting various local shops and businesses in high streets along with shopping malls as customer engagement in these areas are declining. This issue has declined the profitability of high street business by 3.7% in 2021 due to the reduction in sales as individuals are moving towards online marketplace. Researcher has claimed that 53% of sales are now taking place through online platforms. Moreover, this has resulted in downfall of consumer footfall along with high unemployment rates in high streets due to lack of demand for personnel(Guimarães, 2019). SWOTANALYSIS This analysis would help in determining position of high street through evaluating its internal strength as well as weaknesses and external opportunities as well as threats. StrengthsWeaknesses Oneofthemostmajoradvantage offered by high street is the benefit of centrelocationwhichenhanceits popularityandisapproachableto customers. Highstreetisahubofvarious retailers, shopkeepers and restaurant owners which enables individuals to access availability of various goods and services at a time at one location (Buccolieri and et.al., 2018). The retailers operating in high streets wereunabletoadapttochanges through adopting modern techniques during the abrupt conditions caused due to pandemic. It has become inconvenient and risky forconsumerstoaccessproducts during pandemic. OpportunitiesThreats The high street has the opportunity to invest in research and development in order to analyse market trends and consumerpreferencesbetter. Moreover, they need to focus upon making smart investment decisions. The rise in rates of businesses are servingasamajorthreatinthe operationsofhighstreet.The declinationinwagesandgrowing inflation has forced shoppers to cut costs and spend less on their inputs.
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Intoughtimesimposeddueto pandemic, it has became crucial for high street to adopt digital techniques in their operations. The high street was unable to cope withtheuncertaintiesofclosure caused due to emergence of severe pandemic.Thishasresultedinits downfall and decline in operations. The conversion strategies for overcoming challenges and threats of high street faced specially during pandemic is focusing upon accessing government support through grant of subsidies. The operations of the high street could regain consumer engagement through adopting online business models as a alternative solution until situations come under absolute control. PESTLE ANALYSIS PESTLEAnalysisisconductedinordertoevaluatetheeffectsofexternal environment on the overall growth and performance of high street. Political factors: These factors includes the factors prevailing in political environment which are mainly related to governmental policies and initiatives due to which an industry's performance and working is affected to a great extent. For instance, the implications of Brexit caused major disturbance and imposed restrictions on the free movement of goods which has resulted in difficulties and challenges for operations of the high street. Moreover this sector is highly affected by governmental serious restrictions and regulations caused due to major consequences imposed due to COVID-19(Bakkali, 2021). The sudden outbreak of COVID- 19 has implies government to put significant restrictions on overall trade which is a major political factor in context to the high street.However, government also provided grants to retailers to support them but the businesses who were unable to access full grants have to wind up their businesses permanently. Economic factors: These factors are associated with components of financial arena including inflation rates, exchange rates, interest rates, demand and supply models and other such factors. In context to high street rising business rates and inflation is a substantial economical factor which is abruptly declining their performance(James and Gwilt, 2019). In April, 2018 increasing business rates caused strain on the performance of businesses of high street. This economic condition was worsened by the fact that inflation growth was extremely slow.
Other economical factors that was affecting high street is declining real wages.The stagnant inflation implied low business growth and slow process of revenue generation which implied inability of retailers to bear further losses and forced closure in some cases. Social factors: These factors relates to the aspects of culture and demographic trends which directly impacts the working of an industry. The role of social factors in operations of high street is critical in recent times (McNeill and Snowdon, 2019). The changing patterns of consumers resulted in downfall of the operations of retailers of high street which implied their low profitability margins. Consumers are shifting their preferences towards online shopping due to its convenience and to comply with social distancing standards. This shift was majorly skyrocketed during the critical pandemic as people were restricted to step out of their homes.This shift of preferences induced less profit margins of high street retailers implying their incapability to pay staff or promote further business operations. Technologicalfactors:Thesefactorsrelatestotechnicaladvancementsandmodern inventions which directly impacts upon productivity and marketing tactics of an organisation. Technology play a important role in maximising customer engagement through digital marketing techniques. In context to high street, technological factors implies that the offline stores should adopt modern techniques as to ensure maximum consumers engagement. In pandemic times, these factors affected operations of high street substantially as the retailers were unable to adapt techniques of online marketplace which significantly reduced their sales and caused their downfall(Pearce and et.al., 2021). Legal factors: These factors related to compliance of laws and legal standards in order to avoid any kind of trouble or interruption in operations of an industry. In context to high street, the major legal factors that are affecting retailers is protecting intellectual property rights. In addition to this, the high street is also impacted by advertising laws applicable to retail sector. Environmental factors: These factors are associated with the surroundings which are affected by manufacturing activities of an organisation which could cause harm to environment. Examples of environmental factors includes adopting sustainable practices in order to consider the aspects of environment(Guo and Xu, 2021). In context to the high street, the manufacturing operations of various retailers caused a great deal of harm to environment by resulting in carbon emissions, global warming, land pollution etc. these practices are tend to ruin the goodwill of a businesses and also creates negative image from perspective of society.
These issues are hard to focus upon during period of pandemic and it affects businesses throughgettingnegativeresponsesfromcommunitiesofenvironmentalistandoverall society. Conclusion From the above report, it has been concluded that consumers changing of shifting preferences has caused downfall and decline of operations in high street. The identification of strengths and weaknesses has implied the evaluation of positioning of high street in current scenario. It has been assessed that there are certain opportunities as well as threats which is implying situations of high street. From conducting internal and external analysis, it has been concluded that operations of high street are facing major downfall due to shifting preferences of consumers towards online platforms. Moreover, these are also affected by pestle factors which has analysed above. However, the analysis also helped in emergence of effective strategies which could be formulated in order to cope with the issues. Recommendations It is recommended for high street to adapt new technologies and models of online marketing for growing their operations and enhance customer engagement as well as experience(Helm, Kim and Van Riper, 2020). It is recommended for high street to focus upon research and development department in order to create innovative and unique products(Guimarães, 2019). It is recommended for high street to enhance their networking and focus upon development of effective logistics department. The retailers of high street must develop constructive channels of transportation and distribution to ensure wide availability of products(Davis, 2021). It is recommended for high street to promote customisation of products in order to induce customer base. Customisation should be done in potential manner which is not otherwise available on online platforms(Krause and Matzdorf, 2019). Moreover, they should promote discounting policies and effective marketing strategies.
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Action plan Decision implemented:The high street should focus upon constructionof online market place along with promoting customisation of products in offline stores. Moreover, the high street must adopt lower pricing strategies to gain competitive advantage over online market place.Also, the retailers would turn to government for granting support to bear with losses suffered due to pandemic. Monitoring the decision: Resources:(what resources will be required to monitor the implementation) Personnel having expertise in research and department IT Professionals for establishing online platforms Documentationandlegalfulfilmentforgranting governmental support Key Indicators:(What will you measure to keep track of progress) Consumer engagement Income and Expenses statement Profitability margins Sales turnover Government grants Targets:(create SMART targets connected to the indicators) Proper implementation of Digital promotional techniques Inducing consumers through Lower pricing strategies Attaining reduction in additional costs Data Sources: (What data will you need to track progress) Number of daily visiting customers Revenues earned Cost sheet Standard variances Reviewing the decision: (Write here how you will evaluate/review the problem. What questions will you ask? The problem would be reviewed by constantly monitoring the frequency of visiting consumers and there buying patterns would be carefully analysed. The questions developed for
Etc.)reviewing performance are stated below: Are we effectively implementing constructive strategies? Does our strategies align with determined objectives? Are we succeeding in maximising customer engagement? Communicating the Decision: Internal Stakeholders Who? How? Frequency? Employees, managers, shopkeepers, investors including customers wishing to buy online. Theseinternal shareholders wouldbe communicated through increasing awareness amongthem andusing effective collaboration digital platformsof communication. External Stakeholders Who? How? Frequency? Government,smallvillages,urbancentresand shoppingmalls.Thesewouldbecommunicated through making effective use of advertisements and commercials.
Appendices SWOT Analysis Strengths Centre location Availability of wide range of products Weaknesses Inability to adapt to changes Lack of convenience Opportunities Enhancing expertise Utilisation of modern techniques Threats Increasing business rates Unable to respond to uncertainties PESTLE Analysis ElementFactorBusiness Impact Political The element that has been identified Examples – BREXIT government regulations Increasing restrictions termination of operations Economic Increasing business rates stagnant growth of inflation Cutting of costs reduction in level of revenues Sociological Shifting preferences of consumers Reduction in sales low profitability margins Technologic al Inability to adapt to digital techniques Loss of consumer engagement in offline trade Legal
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Compliance with laws and legal standards protecting intellectual property rights Environmen tal Harms caused due to manufacturing activities resultant in carbon emissions and other issues. Decline of public image raising concerns of society Decision-Making Matrix CriteriaWeightingSolution ASolution B Decline in consumer engagement 30%Maximising customer engagementthrough adopting customisationin products Throughadopting lowerpricing techniquesby utilising economies of scale Decline in profitability 30%Shiftingtowards onlinemarketplace withcost-effective techniques Granting government supports for funding resources Decline in sales20%Loweringpriceto attaincustomer attentionandinduce customer base Througheffective marketingtechniques ordistributing pamphletsdisplaying relevantinformation toinviteconsumers post pandemic period Decline in overall20%PromotingMinimisingcostsof
growthoptimisation of resources and funds focusing upon innovation productionthrough utilising economies of scale
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