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
4
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
9
Illustration 6: Top 10 E-business Market in World.
Sources: Swanson and Frederick, 2015

over $1,804 per customer. After them is Sweden, France and Germany. The above data shows
that there has been great fall in the sales of high street business in all over world.
The extent to which it affected the different sectors:
E-business have affected other stores also. There are many business such as
technological, education, industrial, health care, travel and many more which have seen major
changes their performance. Majorly all the industrial, business and commercial companies have
adopted the e-business to raise the profit. The main reason for shifting to the e-business was low
barriers, large legacy model. It has contributed to the agile competition and has been the major
factor for revenue generation. Majorly the changes can be seen in the retail sectors but there are
other sectors also who have seen the change such as health, beauty, entertainment and fashion. In
every business firm people have chosen the e-business over physical stores. In terms of the
health and social care it has changed the view of the system. Now people can easily avail the
services on single click. Due to increase in the technological and advancement, now customer
can chose multiple products at home. Also, people are switching over the E-business as it
requires low maintenance, advertisement cost and barriers to the entries in the new business. In
terms of the manufacturing industries it has increased their business aspects as now they can
easily chose over different products. They can easily collaborate with other partners, reduce in
the transportation problems (Sekaran and Bougie, 2016). Along with this, their customer also
preferred to shop online as it offers more suitability to them. But if high street business is
compared they have they have gone for major declination. Their profit ratio and sales have gone
down. If we talk about the pharmaceutical industry people are unable to recognize the person
manufacturing the product. Though the customer have shifted to e-business but people prefer to
chose high street over the e business to make sure about the medicines.
Travel industry has been driven completely through the e-business. These traditional
stores are completely removed from the industrial areas. Now complete sales can be seen online
and e-business has provided the growth opportunities in the business sectors.
People are more likely to prefer the e books for reading. This has majorly affected the
book industry. Further, e-books are cheaper to maintain and easy to keep. Due to this reason this
sector has majorly affected the business of many people who belong to this sector or are related
to this sector. Business in this sectors have affected physical-world retailers, distributors,
publishers, manufacturers and vendors. For illustration, Barnes & Noble is considered to be
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among the biggest book retailer which has modified it's company and has chosen online business
and publication to earn more profit. Many people now prefer Kindle which is the device to read
online books and can store more than 1000 of books. Further, it is affordable so customer chose
this device rather than traditional books.
Considering the education sector, many colleges, schools and University have adopted
the e-business which has replaced many teachers. Further, customer also prefer those places
which have technological and advancement. This has been reason that many schools were shut
down as they were unable to provide those services.
When business consideration is taken we can see that all industrial changes were greatly
impacted by the e-business. Many people and owner have to lose their jobs and have to shift to
other things. Some of the industries have made those changes and are able to survive the market
but in overall the rise of technology has been boon to the high streets. Further, e-business
provides the facility which are affordable, cheap and offer variety to the customer they have
shifted to the online shopping. Sectors like pharmaceutical and some other sectors are their
which are list affected by the business.
Theories related to E-business
The theories are provided which shows the development in the e-business sector. For this
purpose two theories are used which are absorptive capacity and dynamic capability. This
measures helps to understand the business model in more innovative ways. In terms of the
resource based view the firms are seen over the resources availability and capabilities. According
to the resource based theory the firm contributes to superior firm performance and provides
suitable competition (Swanson and Frederick, 2015). The theories like the diffusion of
innovations, resource based view and technology acceptance model which helps to elaborate the
topic and help to understand more clearly. As per the TAM theory, user prefer the e-business
over high streets as it provides ease to use and there are great usefulness of this technology. The
internal organizational capabilities can be over viewed through this theory.
The second is about the Diffusion of technology in the business. Through this theory,
social system and adaptation of the technology in the industries can be overviewed. Various
advantages, compatibleness, ability, observation and naivety can be seen. But the theory has only
focus on the social impact and not on the other factors which are related to this business. In this
theory business aspects are not considered.
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Dynamic capabilities is evaluated to understand the resource based theory. This deals
with the changing environment and focus on the ability to deal with it. In order to overcome the
issues faced by the RBV theory, dynamic capability theory is used as it evaluates the wider
version of it. It focus on the ongoing development in this theory. It deals with the internal factors
which the firms are facing. It includes the organisational position in terms of market factors. The
paths followed by the company and managerial process followed by them.
Absorptive theory is used to understand the new concept and gather the information
which are used to expand the commercial value of the company. It is based on the
communication and knowledge. Further, the issues related to the development and internal
problems of the company can be understood through this theory (Williams,Harte and Turner,
2015).
There is another theory which can be included to understand the topic more clearly which
is theories of change. It can be further evaluated into 6 more part. It rely on the generation
performance and includes:
Life cycle theory: it deals with the changes in this industry. The change can be linear or
determined to the current fashion. Such process are considered as the developmental process and
are irreversible in nature.
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Illustration 7: Business benefits and organisation change
Sources: Williams,Harte and Turner, 2015

Teleological theory: For this theory the goals and objective of the company must be clear.
Changes in this sector are necessary as they support the purpose of company. Changes made in
this theory is rational and is done as there is necessity of changes.
Dialectical theory: In order to gain more access and area firms collide with each other for ruling.
The conflicts can be due to belief or methodology adopted. Such changes are more promoted due
to political system and for the modification leaders took initiatives. Here, innovations and new
ideas take place.
Evolutionary theory: Certain factors can not be changed such as environment and organisation
have to adopt those changes. The development in the firm is made due to external factors and
variation in the on-going cycle can be seen.
Social cognition theory: The changes are on the basis of the society and different learning
process are used to develop the models (Xie, Zhang and Zhang, 2014).
Cultural theory: According to this theory, changes are made due to beliefs, ideology, rituals and
values in the organisation.
To understand more clearly, Multi-theoretical framework is used to explain the e-
business where integration of adaptation and progression is done.
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Future trends and future developments in this retail sector through technology
In terms of online and offline shopping customers will have the better choices. They can
chose better selection at affordable cost. Further, they can buy the products according to their
preference, choices and convenience. As today the retail sectors have completely changed and
traditional retailers have to adopt new technology to survive. Due to e-business the prices have
certainly gone down and their major products are sold over the sales. The retail sector has been
taken over by the online stores which has greatly affected the street business. Many of the firms
have shifted from their local stores to e-business ( Value of online retail sales in the United
Kingdom (UK) from 2012 to 2017, 2017). Another advantages which customers will be getting is
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Illustration 8: Multi-theoretical frame work
Sources: Xie, Zhang and Zhang, 2014

different stores at the same place which helps them to chose more product from the same areas.
If the street business have to grow then they must focus on the new strategies by using the
technology experts. To find the new alternatives high street needs to focus on the areas where
innovations and new ideas implementation is required.
E-business in terms of retail sectors provides greater advantages then physicals stores.
Customer have wide range of choices, with different price tags along with this they can select the
product from any place-time. Further, in terms of payment cash is not required, it done by done
online and person can directly access the details from through internet. There is no tension of
parking and cost given for it (Retail in 2018 - Shop numbers, Online and the High Street, 2017)).
Moreover, people can use the their precious time in some other activities. Through e-business
companies have learn to understand the customers relationship at every point of time. They can
virtually serve their demands. This has also impacted on the way distributors, marketers and
manufacturers produce their profit and provide online services. For them also it has been the cost
effective methods. Along with this, retailers can have their trade businesses in other areas or
countries. Serving online, retailers can easily resolve customer problems and build loyalty among
them. Additionally, now retailers do not need to store things in their warehouse they can directly
provide goods from the manufacturing areas.
Another thing is the payment option, where customers and retailers both have advantages.
Many methods are available like payment through cards and online banking which reduces the
effort to manage the cash. Besides this, E-business have provided multiple ways to order the
products such as through mobiles, laptops, telephones and other applications. As the way of
transaction changed, now payments are fast and accurate. The virtual supply chain has provided
the advantages to customers, retailers and manufactures. Sustainability has been achieved
through the e-business. As the service part has reduced due to online shopping, firms must focus
on the areas. Enhancing the way customer prefer the product and providing the choices even
after their orders can enrich the business. Moreover, price comparison and better features on the
websites can offer them variety to chose the product. This helps them to be more user-friendly
and can provide better competitive advantages to the companies. In UK, Amazon offers the
lowest price and it receive most of the products from 50 largest retailers which are established
their. M&S, TESCO PLC and Sainsburys's are the other leading retail business which started
offering their products online. In 2015, the turnover of the e-business has been more than £5.3
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billion. As per the consumer reports, customers like to prefer more of the general fashion
products and electronics is among the least item which is preferred by the customers. Further, it
was found that more than 77% people like to prefer the delivery option the next day.
As the development and technologies are increasing online retailers must adopt those
option. They must offer multiple products variety and price choices so that customers confidence
can be retained. Applications can insure all their aspects to maintain the good quality service and
offer more reliability. It must be technically suitable to customer and should be ease to surf.
Impact on the sector and issues raised as the result of change in retail industry
Retail sector has been changed over past few decades and technology has played major
role in it. Customers have become more digitalized. Unbounded shopping and quality products
has increased their expectation (Retail in 2018 - Shop numbers, Online and the High Street,
2017). The small changes are made due to advancement in the technology which is popularity in
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Illustration 9: Customer response time to online retail shopping
Sources: Retail in 2018 - Shop numbers, Online and the High Street, 2017)

the use electronic devices, social media influence and technology-enriched online stores.
Retailers have used the technologies in more advance ways to reach the customers. They have
enhanced the relationship between the customers and manufactures. Social media is another
source which helped the retailers to understand choices of people. Through this, they can achieve
their goals and can understand problems which are faced by the customers. High streets main
threats is online stores and the offers provided by them. They are more ease to operate, have
effectiveness and are highly efficient. Moreover, the strategies adopted by this companies have
provided more advantages and profitability. For the customers it has provided better quality and
cheaper products which they can easily accessible. It has also provided business opportunities to
other business. Major changes can be seen the way of supply chain and values. Change in the
payment option has also changed the customer preference over traditional shopping. They can
order the product at any time and can pay it later.
According to the research, consumer behaviours has changed as they are getting better
facilities in terms of product and services. It's more convenient and also saves lot of money as
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Illustration 10: Retail expenditure trends
Sources: Yoo and Bai, 2013

well as time. Further, they provide the adequate information which high streets retailers are
unable to provide. It has been beneficial to the customers. Now online retailers are directly
providing the product from the manufacturers which has affected the supply chain. This has
created the bullwhip effect which has shifted them from the channel (Yoo and Bai, 2013). At last
the changing role of IT development where people are more and more shifting towards the
electronic gadgets. This has indirectly promoted more online retail stores to the customers. They
are getting better facility and also it consumes less time and money.
CONCLUSION
The above report guides about the how e-business have affected the high streets retailers.
For this various purpose secondary data is collected from various places which helped to
evaluate the file. In the following report majorly discussion is about the recent changes and
future trends in online retail business.
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REFERENCES
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Online
Value of online retail sales in the United Kingdom (UK) from 2012 to 2017, 2017. [Online].
Available through: <https://www.statista.com/statistics/315506/online-retail-sales-in-the-
united-kingdom/>. [Accessed on 7th July, 2017].
Retail in 2018 - Shop numbers, Online and the High Street, 2017. [Online]. Available through:
<http://www.retailresearch.org/retail2018.php>. [Accessed on 7th July, 2017].
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