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Is Apple to blame for the High Street's struggles?

Ashleigh Allsopp | Feb. 18, 2013
The recent failure of retailers such as HMV, Jessops, Blockbuster, Game, Comet and Play.com, and reports suggesting that 600 shops closed last year, have raised the question about what's to blame for the high street's struggles. Apple on the other hand is seeing huge success. What is Apple doing right? And is its success to blame for the failures of others?

Retail marketing expert DR Scott Dacko believes that the high street in the UK will soon undergo a "radical transformation" which will see shops become more like depots.

Fresh Business Thinking reports that Dacko thinks HMV, Jessops, Blockbuster and other failing retail chains are the victims of consumers' growing 'divergent buying preferences'. The success of retailers like Primark and Argos shows that the high street isn't dead yet, but businesses need to be fast in adapting to new technology and trends that this technology brings.

"Increasingly, businesses will have to provide a seamless online and offline experience for the shopper," said Dacko. "They also need to make sure people have a reason to go into their shops by offering unique value. That could be exceptionally strong value such as from 99p Stores or Iceland or in providing the most delightful of shopping experiences. But I also think over the very long term a number of shops will increasingly become like hubs or depots where it is convenient for people to pick up orders placed online, and clearly we are seeing that 'click and collect' is growing in use."

According to Dacko, there are three main threats to the high street that businesses need to address. These are online players such as Amazon, which can offer low prices for their goods. "The high street has to deal with high fixed costs and higher labour bills, which, for example, put HMV at a competitive disadvantage.?These online companies have lower costs and a well-developed system for providing customers with what they need."

The second threat is rivalry from retail stores that are now offering significantly lower-priced, good value items that more and more customers are being attracted by during these tough economic times. Supermarkets like Aldi and Lidl have become more popular in the food market, leaving the likes of Sainsbury's and Tesco having difficulty competing with their prices. Primark is another example of a retailer selling low-priced goods to an increasingly frugal population.

"And then, too, there is part migration by some mainstream consumers to the high end of the market, as they periodically look to enjoy higher quality goods and superior in-store shopping experiences. This is how Waitrose is doing so well,"??adds Dr Dacko, which could ring true for customers opting to buy Apple products. "These dying companies have not been sufficiently adept with their marketing strategies. For one thing, many have not had a sufficient online impact, which is increasingly vital. HMV tried to diversify into live music and electronics, but such actions tried to compensate for rather than address the core problem of lost sales to online retailers. There will be others, too, who, similarly will not get their combined brick-and-mortar and online retail marketing strategy right."

 

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