Amazon: “High Street to High-Tech”
Back in August we wrote about the UK being the largest per capita e-commerce market in the world, but what affect has that had on our high street?
There is a distinct correlation between our preference for web markets and the impact that it has had on our high streets. Online retailers like Amazon have become household names while 12% of our high street stores lie empty. In recent years, some of our famous stores like Woolworths and Comet have tumbled into nonexistence. Even titans like Tesco and Marks & Spencer have proven to be vulnerable having seen a drop in sales. By way of contrast, Amazon, sells 120 million products and has UK sales of £4.3 billion. If you are a traditionalist, you may be pointing fingers at the tech giant by this point. In reality, Amazon is not responsible for our high street troubles, we are. We Brits do more online shopping than any other nation, annually spending £1,175 each on average, £300 more than the next highest-ranked country, Australia. 73 percent of us with a web connection purchase products online at least once a month. It has become so ingrained in our way of life that many of us have not stopped to ask the question, is online shopping actually killing the high street, or is it in fact saving it?
It’s peculiar to see it in this light considering the predicament of our high street stores, but e-commerce is not a new thing. In fact, twenty years have passed since the arrival of e-commerce. Let’s rewind.
The date is 11th August 1994. Forest Gump has just grossed $24,000,000 at the US box office. The Channel Tunnel has just been built, and in four months, Sony will launch a little grey box that will go on to change the video gaming industry forever. The offline world is in full swing. However, on this day, there is one individual who will take the first leap into the unknown. They are about to purchase a music CD of ‘Ten Summoner’s Tales’ by Sting, an album that will go down in history as the first item ever to be bought via e-commerce.
This purchase marked the start of what would become a retail revolution. In that very same year, a month earlier, Jeff Bezos had quit his job and launched Amazon out of his garage. By 1999, he had been named Time Magazine’s “Person of the Year” for popularising online shopping. While Amazon may be famed for selling everything from A to Z, it is the company’s ambitious ideas that have labelled it a tech giant. In 2007, Amazon launched the original Kindle, a tablet device with a focus on e-books. It was so popular, that even Amazon had underestimated it. The device sold out in a matter of hours and immediately put Amazon on the back foot, scrambling to keep up with demand. The decision to step into the e-book reader market made sense for the company. It already held an advantage owing to their enormous investment in acquiring the digital rights for many of the paper-form books it was already selling.
The label of being a tech giant does not end at the e-book revolution, of course. On 1st December 2013, Jeff Bezos appeared on 60 Minutes to unveil the company’s plans for a futuristic delivery system. Branded as Amazon Prime Air, the goal is to deliver packages to customers within 30 minutes using unmanned aerial vehicles. Amazon has an R&D team dedicated to conceptualising new ways to make shopping more accessible for the consumer via the power of the internet.
So how exactly could online retailers, like Amazon, be saving our high street?
We are seeing an evolution of the high street, for there are certain things that the internet cannot offer. Independent stores are gaining traction through local business. There are signs that the high street is returning to its roots, away from the monotony of being unable to turn a corner without seeing anything but international chains.
Backed by a government policy introduced in 2012, the high street is starting to become a social place with a vibrant nightlife and niche local businesses. The boarded-up shops and disused properties that echoed a war of extreme capitalism have now created an opportunity to start fresh. Businesses such as Blockbuster and HMV fell because they couldn’t adapt to the internet economy, Britain’s largest economy, whereas the likes of John Lewis has thrived with ‘click and collect’ services. Rebuilding a productive economy based on alternative economic models could very well create thriving high streets once again.
Amazon may just be another retailer, but it is a retailer who has fused technology and retail in ways that have changed the world forever.
To read part one of our blog series “tech giants’ please click here.