Despite hopeful predictions by retail analysts due to a slight increase in sales in October 2021, in November 2021 there was a 24.2% decline in comparison to pre-pandemic levels across all UK retail destinations. In the week leading up to Black Friday, a day of retail sales which, according to US tradition, marks the beginning of the Christmas shopping period, the retail footfall in the UK worsened by 14.5% in comparison to in 2019. This comes at a time where the cost of living is continuing to rise with annual inflation at 4.2%, the highest it's been in a decade.
Inevitably the intermittent lockdowns in the UK have a lot to do with the drop in footfall and brick-and-mortar sales. But this trend has been happening since before Covid. In 2019, BDO LLP recorded brick-and-mortar retail across the UK experienced a 1.9% decrease in sales in this same monthly period, the worst year on record since their records began in 2006. The national movement away from physical retail cannot only be attributed to the global pause in the economy.
So how can fashion retailers keep their heads above water? By thinking strategically about their digital platforms.
The rise of ecommerce is a crucial player in this movement as platforms boast more accessibility to a wider range of options and buyers can strategically shop to find the best bargains. This ecommerce boom and the pandemic have knocked the value of brick-and-mortar retail. Maintaining and profiting from brick-and-mortar retail comes at a high cost: rising rent, high labour costs and increased expenditure on implementing safe practises during the pandemic cannot keep up with the increasing number of competitors and low margins. The Centre of Retail Research estimated that 3,400 retail jobs were lost every week in 2020, culminating to almost 180,000 jobs lost. In the same year, CRR recorded the closure of around 6,000 stores.
In early 2021, two legacy fashion retailers, Debenhams and Topshop, announced the closure of all their stores, having been acquired by Boohoo and Asos, respectively.
Another hit to high street fashion retail has been the increased consciousness around sustainable consumption. This year, the charity retail sector recorded a 3-5% increase in sales in comparison to rates before the pandemic. Chief executive of Charity Retail Association, Robin Osterly surmises this growth is a combination of a backlash against fast fashion as well as consumers opting for economic ways to buy in response to rising inflation.
In a report by PwC, they have suggested retailers can benefit from shifting their business models to resonate with contemporary consumers by incorporating re-sale, market places, and personalised experiences.
In the past few years consumers have been changing the way they shop and brick-and-mortar retailers are responding. Some are offering more to their consumers through in-store experiences and others are restructuring their entire business models. But is it too late for some of the UK’s once beloved brick-and-mortar stores? Young fashion businesses have to consider how they can make their stores a ‘touch and feel’ experience of style, but at the same time deliver slick e-commerce options. Acquiring those skills will be key to survival.