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Academic Insights for the Thinking World
Before COVID-19 struck with such vengeance, the retail industry globally was already in a state of accelerated and highly disruptive change, enabled by the transformative impacts of technology in general and digital connectivity in particular.
wrote recently of the demise of department store retailer BHS as a high street presence in the UK. It is a moot point whether some of the pains that ultimately led to the demise of the business were self-inflicted. But what cannot be doubted is that the disappearance of BHS from high streets and shopping centres is a very salutary example f the huge structural shifts which are reshaping the retail industry today.
The UK’s retail sector is going to be a particularly sensitive indicator of the effects of the Brexit referendum decision. Retailers, whether they are store-based, online or both, are intermediaries at the end of the value chain – and as such are very close to both consumers and suppliers – so they’ll be at the receiving end of Brexit effects in other sectors ranging from agriculture to car production to financial services.
And yet on exactly the same day that ASDA was confirming just how bad its sales position is, Amazon announced that it would open in early 2017 another fulfilment centre – its thirteenth – in the UK. Part—but only part—of the reason why Amazon needs more capacity is due to the initial success of its Amazon Fresh food delivery business which launched in the UK in July 2016.
I was in a taxi in Hong Kong several years ago, stuck in traffic in the pouring rain. I said to my Hong Kong-based colleague how notable it seemed that all the apartment buildings looked exactly the same. “Cheaper that way isn’t it?” was his response, “Just design one then put up 50. Obvious really.”
BHS is, or perhaps that should read was, a familiar presence to shoppers across the UK, with over 160 stores in high streets and shopping centres. The general merchandise retailer combining clothing and home products had traded for nearly 90 years before it was placed into administration in April 2016.