On the back of the news that Debenhams has gone into administration Edinburgh-based partner Philip Knight lends his thoughts to the reduced footfall on the high street and the increasing surge of online shopping spend:
"We've seen the Debenhams website being overwhelmed by shoppers. Unfortunately this short lived popularity is more than likely due to bargain hunting and partially an emotional response to the loss of another brand held in high affection by the British public. The brand name itself may survive, but likely online and in a much reduced format. Debenhams was already floundering in the face of new online-only, fashion retailers with the ability to offer same or next day delivery.
"With reduced footfall on the high street due to COVID-19, a trend towards online retail and the continuing pressure to meet outgoings, such as rates and rent, we predict that the role of the physical store, whilst still important, will change dramatically. The change was already happening and we have seen the evolution of much reduced retail footprints, acting as no more than shop fronts for the online platform, but COVID-19 has meant that retailers will have to accelerate their plans to reduce outgoings to survive, and quickly. We anticipate there will be fewer stores with a greater emphasis on click and collect/return. Some larger stores may be able to pivot to operate a dual role as retail outlets, and also quasi distribution centres, but for many this will not be possible.
"These were trends that WBD predicted in our retail report last year, The Digital Tipping Point, which revealed that online shopping will account for more than 50% of retail sales in the next ten years (up from 19% at the time of report launch) and that this growth will be powered by three primary factors: the changing demographic of the UK adult population, the development of faster, cheaper, in-home deliveries and fewer physical stores. The global pandemic has only accelerated this trend.
"Whilst it will be hard for the likes of Arcadia or Debenhams to flourish in an online market – as there are a number of well-established online retailers both in fashion and homewares filling the gaps (such as ASOS, boohoo and Amazon) – some group brands such as Topshop and Miss Selfridge with an already strong brand identity may well be able to live on as an online experience."