The British high street has had a major makeover, with fashion giants shifting online and furniture and homeware names expanding their presence. With so much change underway, what does the future hold?
The high street’s been on a slow decline for years. Pre-pandemic, various reports recorded falling footfall and an increasing number of stores closing. The survivors were predominantly non-independent and often sold fashion and beauty products.
But since the start of the pandemic in March 2020, even these firms have felt the pinch. Large numbers of fashion stores, including Debenhams, Warehouse and Gap, have left the high street to move online. According to the UK Ecommerce Forecast 2021 report by market research company eMarketer, ecommerce will account for 38.6% of total retail sales in the UK by 2025.
Digital-first retailers are coming to the fore in huge sections of the marketplace. Earlier this year, online fashion and beauty retailer Asos acquired leading British brands like Topshop from Sir Philip Green’s Arcadia empire in a £330 million deal. The move followed the closure of Topshop’s iconic Oxford Street store.
But not every retailer is staying away from the high street. As Topshop exited Oxford Street, Swedish homewares brand Ikea moved into the flagship store, signalling a major shift for high street retail.
“We see a huge opportunity to reach many more people in London and this investment marks part of a long-term plan to transform our retail business, bringing Ikea closer to customers with a new format store,” says a spokesman for Ikea.
With Ikea investing close to half a million pounds to replace Topshop, homeware retail is becoming just as essential as high street fashion. “Oxford Circus is a central shopping environment, with excellent public transport links, where people already work, live, and play and is an iconic hub that Ikea is eager to be a part of,” says the Ikea spokesman.
“In spite of the store closures witnessed over the past few months, we continue to see unprecedented demand for products that enable our customers to live a better life at home, and firmly believe that physical retail will continue to be an essential part of our business and the shopping experience for customers, as centres for inspiration and expertise, community and engagement.”
What’s behind this change? Successive lockdowns, coupled with the rise of remote working, mean we’re spending more time in our homes. That’s had a massive impact on consumer spending and shopping habits, with many prioritising what they need over what they’d like to purchase.
“More time spent at home has given people time to sit back and re-evaluate what they’re looking for in their living space, which has led to an increase in demand for homeware retail,” says Mick Quinn, co-founder and co-director of Raft Furniture.
“Since the reopening of retail, we have seen a 60% increase on our pre-pandemic sales and more footfall from customers than ever before.”
But fashion isn’t in full retreat. Elsewhere on the high street, fast fashion is still standing. Retailers like Primark bounced back as pandemic restrictions eased, with the retailer enjoying sales of £1.6bn for its third quarter in 2021. This success could be down to the retailer’s affordability. It also remains exclusive to the high street, despite the digital transformation of most other retail brands.
Even so, there’s still almost 13 million square feet of space available on the high street, as reported by property advisors at the Altus Group. With such large spaces to fill, left behind by the likes of Debenhams and John Lewis, it’s no wonder that some furniture and homeware retailers see the high street as an exciting new opportunity.
“Homeware is much more of an investment for consumers than fast fashion, which is why the high street is a prime location for browsing before you buy and making considered purchases that will ultimately stand the test of time,” says Charlie Bowes, director of high street homeware retailer Original BTC.
Beyond homeware, we may see empty spaces on the high street snapped up by discount outlets like Home Bargains. They could also be repurposed into restaurants, cafes, business complexes and even homes.
“The future high street needs to be a mixture of retail stores and other outlets, not just homeware,” says Quinn. Without a rich diversity of places to visit, he says, the high street will cease to be the all-encompassing experience that post-lockdown consumers crave.
As retailers recover from the pandemic, there’s no doubt the high street will continue to transform, serving brands that want a physical presence to better connect with loyal customers and reach wider audiences. Pop-up stores and short-term letting might be pursued by big brand retailers who want to promote products on a seasonal basis or partner with smaller brands with an ethical message. However, they may still rely on online sales as their main source of income.
“Amazon, one of the first and most successful online retailers, is now starting to open shops on the high street, which just goes to show that physical retail is here to stay,” says Linda Ralph, senior vice president of Mood Media. “The high street stores of the future will evolve to become brand destinations providing unique customer experiences, ultimately blending the advantages of both online and offline together to create a bigger impact.”