Analysis of UK High Street Retail: E-business Impact and Strategies

This report provides a comprehensive analysis of the UK high street retail sector, focusing on the significant changes and challenges brought about by the rise of e-business. It examines the impact of online sales, changing consumer behaviors, and the economic factors that have reshaped the industry. The report investigates key trends affecting high streets, including the 'perfect storm' of economic crises and the growth of online retail, comparing high street and online sales. It also explores the changes in other countries and analyzes the extent to which different retail sectors have been affected. The report includes theories related to e-business, future trends, and technological developments, as well as the impact on the sector and issues raised as a result of change in the retail industry. It uses secondary data, illustrations, and case studies to provide a detailed overview of the evolution of the high street retail sector and the strategies retailers are adopting to survive and thrive in the face of increasing competition from e-commerce.

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Table of Contents
INTRODUCTION...........................................................................................................................1
High Street Business: .................................................................................................................2
The Perfect Strom:......................................................................................................................2
The value of high street in comparison to online sales...............................................................4
Changes in Other Countries........................................................................................................8
The extent to which it affected the different sectors:................................................................10
Theories related to E-business..................................................................................................11
Future trends and future developments in this retail sector through technology......................14
Impact on the sector and issues raised as the result of change in retail industry......................16
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................19

Illustration Index
Illustration 1: Performance of retail before and after the crises.......................................................3
Illustration 2: Value of Online retail sales in UK...........................................................................4
Illustration 3: Net worth data of UK consumers..............................................................................5
Illustration 4: Online retail sales and growth ..................................................................................6
Illustration 5: Retail Store Fall till 2012..........................................................................................7
Illustration 6: Online Shares of retail growth..................................................................................8
Illustration 7: Top 10 E-business Market in World. .......................................................................9
Illustration 8: Business benefits and organisation change.............................................................12
Illustration 9: Multi-theoretical frame work .................................................................................14
Illustration 10: Customer response time to online retail shopping................................................17
Illustration 11: Retail expenditure trends.......................................................................................18

INTRODUCTION
The retail sectors has completely changed the preference the way customer choose
products. This industry has seen dynamic changes when online retail stores have come. UK
retailers have to adopt the new methods and technology to evolve and succeed in the coming
years. The report is based on the major high street retailers develop strategies t withstand the
incessant pressure from e-business (Brennan, Canning and McDowell, 2017). It has impacted
long term to the companies policies, demographics and transportation with the effects from
online shopping. E-retailers have created the economic crises to the on high street business.
However, it can be seen that some of the retail sectors have changes but there are no evidence to
come up. The modification can be fully or can be responsive to those who understood those
changes. Further, the changes can be studied from the Economic and Social Research Council
(ESRC). The wide spread changes in this industry can be seen in vital commercial and societal
location. For the following report secondary data has been chosen to evaluate.
Following report outlines the key trends which are affecting the UK's high streets and
their future scope. Some main topics to be included in this are: Storm in the retail business: The short and long term factors which changed this sectors
came after the year 2008. After that year there are many economical changes which
affected the high street business and made their performance negatively. The value of high street in comparison to online sales: The changes faced by the high
streets and the growing popularity of the online- retail sectors. Changes in other countries: Online business has been changed over past many years. In
UK the online store evolved during the year of 2008-2012. But in US the business had
already taken growth till that year (Crane and Matten, 2016). The extent to which it affected the different sectors: E- business has over come all the
business and has made the modified the way of doing the marketing. Theories related to E-business: There are various theories which can help to understand
why this business has evolved. Theoretical framework has been included in the report to
understand more clearly. Future trends and future developments in this retail sector through technology: Major
changes are depended on the consumer preference and their choices but there are other
factors which have made such changes in this business areas.
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 Impact on the sector and issues raised as the result of change in retail industry: The
major changes in this sector was due to consumer behaviour and technological
development. Further, the issues faced by the retail sectors are supply chain issues which
had greatly impacted the market.
High Street Business:
This are the primary business street or local business in the city, town or village areas and
main focal points are banks, shops, stalls and other service businesses. Talking about UK, there
are more than 77times/year customers of high street, spending over £26 per trip. Cash payments
is their main turnover. The main consequence faced by the retail sectors is due decline in banks
and shoppers (Kasemsap, 2014). To overcome this some of them have adopted the cash machine
services. There are more than 2.9M people employed in this sector making the turnover of more
than £7.1B per week and contributing to the GDP over 21%. The main shops can be seen Free-
standing store, Town and shopping centre and retail parks.
The main evolution in this sector was due to large retail developments which gave them
high competition, economic crises, growth of e-business and changes in the demographics and
customer preference as well as culture (Forsyth, 2014).
The Perfect Strom:
The short, medium and long term consequences in this sector was seen after the global
crises which came after the 2007. The economic shock wave have exposed the high streets to
disruption. There was the end of the cheap credit, customer confidence and economic buoyancy
which left this sector completely. Many business sectors were hardly affected due to this sudden
crash. More than 75000 thousand people were affected due to this crises and many of them have
to shift into governance and settlement. There was fall in this sector from the consumer sides and
economic downturn up to 15% till next 6 years. At the end of 2013 there was little growth seen
in this sector.
Though their was downfall but changes and adaptation have made many business
successful at that period. It offered them new opportunities.
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In terms of regional scale in UK, north areas was hard-hit by the macro-economics. The
major force of change can be seen through the following impacts of short, medium and long term
impacts. There was also rise of high retail stores after the year 1990-2000. Major market was
covered by these retailer and sales of high streets have gone down. After the economic hit
through there was rise but that too was not significant (Kasemsap, 2014). Due to growth of large
shopping centres, there was great impact on the high street's customer as they were getting the
products at the same place which was time consuming for them. Customers preference and
choices started changing after the establishment of large stores as they were getting large leisure
facilities. Further, technological growth and hike in petrol prices have been the influential factors
for the customers to chose this services. Such convenience culture made consumers to avoid the
street high. Another impact which affected the sectors was parking availability and cost issues of
customers. They have to pay extra for the parking facility which made them dissatisfied. For
example, Whittard of Chelsea was started in the year 1886 and is international retailer of
beverages. Due to the economic and financial crises the company have to face major problems
and reported loss of £3.2m. At the end of the year the company was sold to EPIC which is the
private equity. Another example of Dolcis Shoes, which started in the year 1863 as shoe-wear
retailer. Due to the credit crunch and recession the retailer had to shift to administration. Many
people lost their jobs. At the end of 2008, all the shops of the company have been refitted.
Latterly, it began trading online and were rebranded as Barratts Shoes.
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Illustration 1: Performance of retail before and after the crises
Sources: Forsyth, 2014

The value of high street in comparison to online sales
Due to rise in the online business There was impact on the high street due to closing of
the banks, the rise of the online sales and banking. Due to the online stores their was rise of new
challenges for the physical stores. By the end of the August 2010, there was fall of more than
19% in this sector. The number of buyers were considered as the major reason for the fall back.
In all the EU countries, UK's retail sector were hardly affected by E-business. There was
significant rise in the online retail sector in UK (Langille, 2016). The value of online retail sector
has doubled and reached to 67.43B pounds. It is estimated that 77% of the people prefer to buy
their product online. In EU countries, Great Britain was among the highest in online retail
revenue collection. According to the E.S.R.C. the high street has been substituted by the online-
shopping. They have enhanced the choices of physical shopping. Many high street business have
adopted this method in order to survive in the market. For example TESCO, the actual growth of
the company was started by the year 2010, but during the year 2007 they too have to face the
economic crises. The High street business was mostly affected by its sales values and profit
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Illustration 2: Value of Online retail sales in UK
Sources: Kasemsap, 2014

margins. The company adopted the new methods of e-business which made the profit to the
company.
There was great impact on the High street retailers due to this. The consumer habit of
choosing the online shopping habits have affected the traditional retailers. According to the high
street retailer Debenhams, they changed their owning style and adopted the mobile interaction so
that their sales can rise. As per the consumer analysts Savvy marketing many consumer have
return their product as they were trending. This has resulted to great loss to them, as returning
was the part of their business but they need to recover their losses or they will fall under risk.
Further, UK Cards Association, said that e-business are more secured and this has created many
innovations. The choice of digital wallet, 1-click purchases, click and collect option have
increased the security. This has also provided the security, quality and suitability to the customer
which has further lead to the growth of the company. The shopping features available has made
addiction to the customers. Moreover, the facility of choosing the products 24/7 had provided the
convenience to the customers.
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Sources: Langille, 2016

From the above data it can be clearly seen that there is hike in the sales and growth of
online retail stores. Further, the online shares of the retail trade also shows rise. Such aspects
certainly needs to be sorted and there is need of high recommendation for the future of High
Streets Forum. More than thousand of retail shops have been closed due to this purpose but it
also provided the rise to many companies such as Primark which raised it's business after the
trade down has taken place. Some of them have to shift to Administration or liquidation.
Following data shows the fall of retail sectors in UK (Page, 2014). According to Centre for
Retail Research published data, till 2018 there was fall of 60,000 stores closed by 2018 and more
than 316,000 people have lost their business. The rise of e-business have grown to 21% by the
end of decade. Many companies have shifted to Administration which made further loss of
23000 stores. Further, it was expected that there will be fall of more than 30000 Stores in next 5
years. Due the losses many retail areas are converted to residential accommodation and other
similar things.
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Illustration 3: Online retail sales and growth
Sources: Page, 2014

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Illustration 4: Retail Store Fall till 2012
Sources: Perera and et.al., 2014

Changes in Other Countries
Though UK, was having the highest consumer in terms of e-business but there were also
other countries where customer like to prefer the online shopping. Amazon's was among one of
the company which has brought major changes in the choices of consumers. They have
revolutionized the way people do shopping. There are multiple choices available to the customer
and they can chose the product at any place-time with just single click. Through the above graph,
we can see that there is rise of e-business more than the high street. In other countries also there
has been fall due to number of high streets (Perera and et.al., 2014). In US there are more than
30000 shops closed due to the online stores. Amazon one of the online retail business has taken
the market. More than 53% of the customers in US prefer to buy the products from Amazon.
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Illustration 5: Online Shares of retail growth
Sources: Perera and et.al., 2014

Other than this Wal-Mart which also offers the online shopping option to the customers are
ruling the market. In terms of the E-business China is among the top-most country which sells
the their maximum products online.
The U.S. is among the second numbers and third is UK. The top 5 e-business who ruling
the world are Alibaba which is having more than 300m customers. Then comes Amazon, Apple,
Staples, Wal-Mart. These are the world top most retailers in the world having more than millions
of customers. In world wide there are many retailers shops which are vacant due the e-business.
Apart from the EU countries there is fall of many customers in the Worldwide. In US, more than
$399.53 bn money was collected from the online shopping. China has been the leader among the
retailing as compared to US and Europe (Rayna and Striukova, 2014). However, in all the EU
countries there has been fall of more then 1-5% of the store based retailers. Along with this, US
has the same situation there has been fall of 1.1 % in the physical stores. This has impacted in the
unemployment and many other things. In order to develop they need to make policies which
could favour than to raise their business or they to need to adopt those changes. According the
sales growth, UK, Germany and France have online sales for more than £152 which is 75% of
EU e-business. In terms of spending, UK comes on the second place and at first place is US with
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Illustration 6: Top 10 E-business Market in World.
Sources: Swanson and Frederick, 2015