As we await the near-weekly news of another household-name department store in dire straits, new figures underline the trouble of holding a physical store in 2019, with Altas Group predicting the loss of 175,000 High Street jobs this year. In Burslem, Stoke, one in three High Street stores now lies abandoned and boarded up. Similar ‘ghost town’ figures are reported in Newport, Wales, and in Dewsbury, West Yorkshire.
So, is the physical store a thing of the past? Is the cost of having a high street presence simply too big a price to pay for new business owners? Is setting up online the best and safest bet? Or, is there still a way to not only survive on the high street but thrive?
To answer those questions – we asked the real experts out there – people who are running their own successful business, or those operating at a senior level within others. Today – four businesses who say that your best chance of success is through an online-only approach.
Irina Bragin runs Made of Carpet, a small independent fashion brand. She started the business with just £10,000 eight years ago and has a current annual turnover of around £100,000.
"I had the advantage when starting our of being a professional Graphic Designer, while my husband is an IT engineer and I have not therefore needed to spend money on design and web-development on my business. I am also a huge advocate of online shopping and I sincerely hope to see Oxford Street completely residential one day.
"At some point in my first couple of years, listening to 'experts', I lost a lot of money (over £50,000) exhibiting at fashion trade exhibitions in London and Paris. Instead of spending tonnes of money trying to find wholesale buyers for your goods, go online and sell them retail – straight to the end-consumer.
"If you open your goods up to buyers on Amazon, Etsy, eBay etc., then promoting on these marketplaces, Google and all over social media then you will sell for RETAIL prices: 2.5-3 times higher than wholesale.
"There are plenty of other reasons why it is better to be online than a brick-and-mortar business, including commercial rates, employment law, additional expenses etc. I know three people personally who lost, or nearly lost, their brick-and-mortar businesses because they did not have a strong online presence."
Prezzybox is a UK-based major online gift retailer, set up in 2000. Today it turns over millions each year, and has a strong online presence – with over 42,000 Twitter followers, for example. Zak Edwards is their Managing Director.
"For some businesses, it helps to have a high street presence – for example, a specialist cheese shop – as there sale is so much more experiential. There's also the advantage of immediate footfall. The disadvantage is obviously the cost of the premises and the fact that your customer reach is limited to your locality.
"For most retailers, however, online is where it's at. Set-up costs are a lot lower, whereas overall reach is much higher. You're also open 24 hours a day, 7 days a week which is a massive advantage. It's great going home at 6pm to come back the next day to a mountain of orders which have automatically been processed. You're not governed by physical space either. You have a virtual showroom where you can sell thousands of products - especially if you utilise manufacturers who offer drop ship services.
"Finally, online marketing is a massive advantage. There's a raft of free marketing tools which you can take advantage of which can really help drive traffic to your business - for example Google organic listings, Social marketing, newsletter marketing etc, which really help to drive sales. Again, if you're purely a high street brand it's more difficult to monetise online marketing efforts."
One in every five pounds spent in UK shops is now online, a rise of 15.3% over the past year, making up a record high of 18.2% of all retail sales.
Conduct Science Network offers scientists low-cost, high-quality tools in order to conduct digital logistics. The business is based in Boston, Massachusetts, and was founded by Dr Shuhan He.
"As a doctor, I want to be right in the middle of a performance bell curve. That is to say that everyone recognises what I'm doing, and agrees that it's the right way to treat a patient. It's the "standard" practice. Its average – exactly where everyone else is.
"When you're running a business, however, you're inherently in a competitive ecosystem. That means that to compete, we have to be at the right side – the top end – of the bell curve in performance, so to speak. This is how we win. Thus, being on the right side of the bell curve means you need to be doing things that not everyone else agrees with or are doing.
"I see creating digital companies as placing myself on the right side of the bell curve. Is there a chance it's on the wrong side? Yes. But that's the risk I take to be competitive and win. Thus, being entirely digital gives me that advantage as a small business owner, and lets me compete with businesses that are much larger and have more staff and capital."
Becki Clark is a senior consultant at Perform Green, who deliver digitally inspired solutions for a variety of clients. This includes teaching people new skills, build commercial relationships and provide expert delivery capability.
"Nothing beats handling a product for customers, but the power of online is still compelling. There are a number of ways you can maximise your online impact.
“You can go to where your customers are. Retail space is fixed in location. Online, you can take your offers to where your customers are. Online advertising offers advanced segmentation and can show your advert directly and only to your target audience, not every passer-by. And once you capture their email with full GDPR permissions, you can send offers and articles directly, and not have to pay to advertise.
“You can gather real-time data. Imagine if you were to follow someone around the supermarket. What did they come in here to buy? Did they come in, go straight for their item and pay, or do they linger? What are they looking at? How do they compare products? Online cookies can track those sorts of behaviours. Data can be aggregated to determine who is buying what when, and you can use that data to improve your product or offering.
“You can digitise the offering and ‘sell in your sleep’. The ultimate dream is to be able to sell product or services when you are not working. Generating passive income is much easier online, where a few months producing and honing the product and the advertising can lead to leads funnelling themselves; choosing and receiving the product all without your direct intervention.
“Online allows you to reach much further and to interact with your global customers to connect to a worldwide community. Don’t be afraid to engage locally, though. There are exciting initiatives taking place in the high street which may not die entirely, but instead may be reborn into something else, like a phoenix rising from the ashes.”
Keep an eye on the Informi blog later this week, when we speak to business owners who believe there’s still plenty of room to have a physical presence.
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