The Rise of E-commerce & the Decline of the High Street



It will not come as news to many that the high street in the UK is in rapid decline and has been for the last five years, following the great recession. This comes as 10.3%1 of stores on the high street are now vacant and as much as 18.2% of retail shopping was made online in the last year2. However, it is a common misconception that the decline in footfall and shopping on the high street is a sole consequence of the rise of e-commerce shopping. Although the rise in e-commerce shopping is noted as a contributing factor to the high street crisis, there are many other financial issues that have left the high street business in the situation it is in currently. It has been on a steady decline in recent years due to weak wage growth, a rise in shop rent, a fall in discretionary spending, too many stores open for one brand and the high debt burdens these stores have3. With the rise of inflation and the lack of rise in wages in the UK, many shoppers have been left unable to spend money on unnecessary items, pulling them away from the high street naturally. This money is then diverted to necessary purchases such as household bills and food shopping. Retail is undergoing a period of unprecedented change in response to changing consumer behaviour4 and therefore it is difficult to predict how or when the high street will begin to boom once again.



In 2018 an average of 16 stores closed per day whilst only 9 were opened, leaving the high street in a deficit of possible stores for consumers to spend in. We can see this in many big-name brands that have fallen into administration in recent years, such as Poundworld, British Home Stores, Toys R Us, Maplin and the 106-year-old Woolworths. It is recommended that in order for the high street business to once again reach its former necessity in the public’s weekly routine, that high streets must return to a Victorian model where shopping is more of a social experience, and that UK homes must once again return to high streets in order to prevent no-go areas from 6pm onwards. This would require significant societal change and therefore seems unlikely to be able to be executed with the dynamic shift towards the technological advancements of e-commerce that are improving constantly. In this situation, we must learn to adapt to the rise of e-commerce and introduce new reasons for us to return to our town centres5.



As 50,000 people lost their job in the retail sector in 2018, it is no surprise that online outlet stores such as ASOS and Amazon are dominating the market. It appears that although the rise of e-commerce shopping is a contributing factor to the decline in high street shopping, the rise of e-commerce is a consequence of the decline in high street shopping. In May 2019 high streets had a decrease in footfall of 4.8% which is the steepest monthly decline in the last 6 years6. It is also estimated that 34% of retail sales will be e-commerce by 2020 and that 31% of high street stores will be closed by 20207.



In this decline of high street shopping, it has allowed the e-commerce market to soar and take over many sales. With the rise of e-commerce being a consistent option for fashion and electrical supplies, it is no surprise that ice cream parlours, sports and health clubs and bookshops rose in number last year as their products require a physical dependency to purchase and experience in store. With the divisiveness of high street shopping and consumers it is hard to predict how the high street with fare in future years, and whether e-commerce will take over entirely. With some stores implementing artificial intelligence shopping assistants in stores, will there be a happy medium or hybrid of e-commerce and high street shopping developing?