UK loses 83% of department stores since BHS collapsed

https://www.bbc.com/news/business-58331168

by pseudolus • 5 years ago

101 156 5 years ago

bbc.com

ThePadawan3• 5 years ago

Millennial here:

I can't remember the last time I went into a department store other than

* to eat in their integrated restaurant

* to go to their integrated supermarket

* because it was raining

kunagi7• 5 years ago

More reasons:

* To enjoy free AC on hot summer days.

In southern European countries were summers are very hot, humid and electricity is expensive it's nice to let someone else pay the bill.

Still, most department stores on western countries are being slowly closed since they aren't profitable. There's a mix of reasons like online websites (Amazon, Aliexpress), smaller middle class... They call this the retail apocalypse [0].

[0] https://en.wikipedia.org/wiki/Retail_apocalypse

cafard• 5 years ago

Hah. A heat-averse relative used to travel several blocks north and east in Washington, DC, going from department store to department store. But the stores she used in the 1950s were already closing before 1980. At this point, Macy's is the last real department store in downtown Washington.

Foobar8568• 5 years ago

* To go to toilets when traveling

dukeyukey• 5 years ago

Same here, with the exception of John Lewis, who are just plain great. Good prices, great selection, and a worker co-op to boot!

tehbeard• 5 years ago

Another millennial here, shsrig some memories from way, way back in my youth:

I remember toast in the cafe at the top of Beatties, and looking out the window to the streets below.

Going in to Debenhams to get an original chunky Xbox.

It's weird that I have memories from my early teenage years of the high street (had to go through it from secondary school to the bus stop), and there's no new memories as it's all vape shops, poundlands or franchise cafes now. :/

Scoundreller• 5 years ago

If you ever legalize marijuana, expect a million of those shops too.

Sincerely, Toronto and area where you can buy the same thing online and get it sent to your door for the same price.

jamiek88• 5 years ago

Birkenhead?!

hkt5• 5 years ago

BHS was never good in my lifetime. These companies haven't kept up with the times mostly. John Lewis deserves honourable mention for being really quite good both offline and online. The rest are dreadful and deserve their fate because they just will not modernise.

qlm• 5 years ago

John Lewis is great, I buy from there over Amazon wherever possible. It's a worker co-op too, which is nice.

bellyfullofbac• 5 years ago

We've read the horror stories about Amazon (shitty products, misleading pic, etc), I wonder if a new concept for department stores can "solve" this problem by having the ability to look at the products/for the customer to go somewhere and talk to the manager in case they get a lemon.

In Germany, I know electronic stores like Saturn or Mediamarkt already have the same prices in store as their website, to somewhat reduce the bleeding of their brick and mortar.

hkt5• 5 years ago

I do the same for the same reason. I've never worked anywhere with a workplace democracy but I'm glad the workers at John Lewis get that.

rwmj2• 5 years ago

I bought lots of kitchenware from John Lewis over the years because I simply don't trust Amazon to sell me anything that touches food.

arethuza5• 5 years ago

Debenhams used to feel pretty sad and run down even when the shop was pretty new - I think I only ever visited one of their shops once and that was walking through to get to the car park.

chaircher• 5 years ago

Debenhams near me had their staff on min wage 0 hour contracts, which on top of being morally dubious meant they weren't able to afford to buy anything from Debenhams and clearly no one had invested in their training so they didn't know or care about anything on sale there. It was pretty indistinguishable from Primark apart from the general style of clothes (not quality), and that was before Primark opened what looks suspiciously like a department store in Birmingham

cph123• 5 years ago

When I went into BHS as it was closing down, they had a lot of low quality clothes 'on offer', but still unreasonably expensive. Two polo shirts for 50 pounds, no thanks.

amanaplanacanal• 5 years ago

Probably not much different in the US. We used to have Montgomery Ward, Nordstrom, JCPenney, Kmart, and Sears in my town. All gone.

dv_dt• 5 years ago

The irony is that those merchants were the Amazon of their day, bringing a wider range of choices and quality to cities they served.

hogFeast4• 5 years ago

Yep, there were free-trade laws to protect independent grocers and the chain department stores set up in suburban areas which took away business from independent inner-city department stores (typically family-owned).

Interestingly, I think the implosion of chain department stores in the US is linked far more to growth of online sales (even though, online sales are far higher in the UK) and overbuilding of retail capacity. The UK is seeing demographic/infrastructure changes with greater suburbanization.

Stores that are in out-of-town retail parks, more like US strip malls, are actually doing very well. One example is Next, a big clothes retailer, they used to have a lot of high-street/inner-city locations but moved stores out-of-town, and they are doing quite well (they also have a very nice business online, they even do third-party fulfilment from their warehouses). And there are lots of new chains focused around retail parks that are growing very fast.

Online is definitely a factor that is shrinking the overall offline retail market. But a lot of these department store chains started having problems in the 2000s, and just imploded in the 2010s. The comparison with the US is very interesting though.

ThePadawan3• 5 years ago

From watching the Dead Mall series on YouTube [0], this has been going on for a long time, too, "even" in malls (i.e. where rents should be lower, and the audience generally more willing to actually buy items than in a general downtown type area).

[0] https://www.youtube.com/playlist?list=PLNz4Un92pGNxQ9vNgmnCx...

jstx1• 5 years ago

British Home Stores - https://en.wikipedia.org/wiki/British_Home_Stores

I had to look it up even though I've lived in the UK for about 10 years now.

vidarh3• 5 years ago

I've lived in the UK 21 years, and only been in one once. It's decline was long and slow.

arethuza5• 5 years ago

I think I went into a BHS in Aberdeen in the early 1980s - that was it, clearly left a deep impression.

rwmj2• 5 years ago

They were more commonly known at the end as BHS (unless you happened to live in the center of Edinburgh where the large British Home Stores shown in the article dominates Princes Street). They were a very mid-tier department store, better than say Woolworths but a lot worse than John Lewis. It's not especially surprising that they went bust, but it was not helped when the last owner infamously flogged off the assets, loaded the stores with debt, then awarded his wife an enormous one-off dividend.

Edit: The Philip Green dividend debacle. I forgot that the cheque was not only enormous, but was tax free because his wife resides in Monaco. https://www.theguardian.com/business/2005/oct/21/executivesa... Many of the statements in that article haven't aged well.

hogFeast4• 5 years ago

That BHS in Edinburgh has been converted (I have heard, I live near Edinburgh and haven't been into the city centre for about ten years) into a mini golf, pool, bowling, etc. place...that only takes up the basement. I remember walking through that place once in the 2000s, and it was totally dead then and ludicrously large.

bb1232• 5 years ago

I wonder how much of this comes down to people working longer and less social hours, and the decline in multigenerational households providing childcare to working age parents. Having the time to browse through a department store at your leisure is a massive luxury that I suspect many people simply can’t do.

tempest_• 5 years ago

Nah most of it is people buying things online and the failure of these older establishments to successfully transition.

They lose revenue and the stores start to look dated and because they have to pay rent they cant compete with a big warehouse. Eventually everything looks dated and costs more so people stop going.

bb1232• 5 years ago

Yes, but why are people buying online? My argument is that less free times makes the convenience aspect of online shopping more compelling.

lanevorockz• 5 years ago

Covid destroyed the local businesses and replaced them with Amazon ... Here the local butcher was gone after 140 year, local farmers market, local antique store and even the craft shop. At least we are consistent that everything comes from china now, almost like we don't matter at all.

colordrops• 5 years ago

Covid didn't destroy local businesses - ham-fisted (or maybe even intentionally malicious) policies destroyed local business. Considering Bezos' regular sociopathic behavior, I wouldn't even be surprised if it came out that Amazon lobbied various local governments to severely restrict small businesses under the guise of public health during covid. It's what Bezos does in the space industry and he even owns a media outlet (Washington Post) to push his agendas.

umanwizard2• 5 years ago

Covid destroyed

Not covid. The response to covid, which was a choice with tradeoffs.

sharken• 5 years ago

Tomayto, tomahto, if Covid had not happened these stores would most likely still be in business.

hkt5• 5 years ago

The decision (taken before millennials were born) to offshore as much work as possible was taken to undercut the wages and conditions of UK (and more generally, western) workers. The quarrel shouldn't be with China though - our politicians chose this because it made the wealthy wealthier.

kazen44• 5 years ago

also, the removal of manufacturing capability has enourmous Geo political consequences. the chip shortage shows the pain points. as did the incident with the evergreen ship and covid-19 as a whole.

outsourcing seems to also be partially motivated by undercutting the workers and focus on short term profits.

arethuza5• 5 years ago

Quite the opposite in the town near where I live in Fife - the town centre has boomed since Covid. I suspect people popping out to shop during the day rather than commuting into Edinburgh.

dboreham• 5 years ago

It takes a long spoon..

mFixman• 5 years ago

Cannot confirm. My local farmer's market in London is stronger than ever, and two new ones opened up at walking distance from my house in the last year.

Working from home and allowing people to sneak out of work on a Wednesday noon to buy groceries was a boon for farmers' markets.

Places with cheap products and places with good products are striving. COVID is accelerating the death of shops that sell bad products at high prices.

vidarh3• 5 years ago

This decline started decades ago.

In the 21 years I've lived in the UK, dozens of large chains have shut down, including several large, iconic department store chains.

The reality is the shift online have been going on for more 20 years at this point, and it's not at all just Amazon, and to the extent Covid had an effect it was to speed things along a ton little bit.

vanilla-almond• 5 years ago

There has been a big jump in online grocery delivery during the pandemic in the UK. I suspect many people are continuing with online delivery even though pandemic restrictions have eased.

The pandemic really exposed some of the supermarkets and retailers with no online delivery offering (at least in the UK) e.g. Lidl, Aldi, Primark. All the supermarkets remained open during the pandemic, but the ones without the online delivery option missed the opportunity to expand in the online grocery market.

blibble2• 5 years ago

the department stores have been losing business for 10 years now

covid is just finishing them off

parenthesis2• 5 years ago

Before online shopping, there was the department store (and mail order catalogues).

When I were a lad, the centre of Edinburgh had, I think, the department stores: BHS, C&A, M&S, House of Fraser, Debenhams, Jenners, John Lewis, Goldbergs (extra brownie points to anyone else who remembers Goldbergs!). I think only M&S and John Lewis remain.

As recently as the 1980s, Jenners still had lift attendants.

I can't believe I've been an Amazon customer for over twenty years (an early purchase was a film on VHS), yet I remember well the glory and wonder of the department store still in its heyday.

arethuza5• 5 years ago

I remember Goldbergs from my time as a student in Edinburgh in the 1980s - never went in though.

The shop had a rather weird location which was apparently due to some planned roads at Tollcross that never actually happened:

https://www.edinburghnews.scotsman.com/whats-on/arts-and-ent...

It might have been the horrific plans for an inner ring road in Edinburgh - which I can say I'm very happy never got built:

https://www.gcat.org.uk/blog/?p=682

Edit: I never understood what the attraction of Jenners was supposed to be.

JoeAltmaier• 5 years ago

Bankruptcies in America too: Chuck E Cheese, J.C.Penney, Nieman Marcus, Gold's Gym, Hertz. Many more.

helsinkiandrew2• 5 years ago

I think the demise of department stores is only partially related to ecommerce.

50+ years ago people dressed like their parents and there was much less consumer choice so that you could go to a department store and find everything you needed. Now fashion is much more tribal and there are speciality stores for specific goods that give better prices, choice and service.

The only department stores that seem to be thriving have a niche - very good food hall, high end fashion, or discount.

albertgoeswoof• 5 years ago

50+ years ago people dressed like their parents

huh? I think teenagers in the 70s would not agree..

julian55• 5 years ago

Quite. Even back in the 70s most department stores seemed old fashioned.

parenthesis2• 5 years ago

Many department stores catered to the middle market, which post-war become very large.

But people now seem to want either very cheap or very fancy. Hence, in the UK, the death of stores like BHS, while, for example, Primark (bricks-and-mortar cheap fashion) and M&S food (fancy groceries) have thrived.

lotsofpulp2• 5 years ago

But people now seem to want either very cheap or very fancy.

Perhaps because that reflects what they can afford, due to widening income/wealth gaps.

beardyw• 5 years ago

Sorry, but I remember 1971, 50 years ago. People in the UK most certainly didn't dress anything like their parents. My mum didn't wear hot pants and my dad didn't wear yellow and green striped flares like me! I would say now parents dress more like their adult children.

dghughes• 5 years ago

Or as some of the people on fashion channels say "cover". When you dress you have a purpose but covering is just putting cloth on your body no thought to its look.

Many people now just cover themselves. They mindlessly throw on a t-shirt, shorts, hoodie, most often if not always it's sports-type clothing. And sneakers not shoes. It's hard to tell the 10 year-old people from the 40 year-old people these days just going by clothing.

helsinkiandrew2• 5 years ago

Perhaps I should have said 60+ years ago, but even in the 1970s just about everybody was wearing the clothes that the 70s is remembered for or the clothes of their parents. If you looked back at todays street/everyday fashions in 50 years time there are hundreds of different styles.

londons_explore• 5 years ago

I prefer that 80+% of the price of big purchases I make ends up paying for R&D, materials, or labor used to make the item.

But with most stuff bought from a department store, usually half the money ends up paying city center rents, salaries of people working the till, and other logistics costs.

The end result is you pay a high price and get mediocre goods.

izacus• 5 years ago

For us non-english speakers: what precisely is a department store?

Clewza313• 5 years ago

A big store that sells everything.

https://en.wikipedia.org/wiki/Department_store

carl_dr• 5 years ago

It’s a single store, which has loads of different departments in it - perfumes, clothes, electricals, homeware etc.

dvh• 5 years ago

So a supermarket?

physicsguy• 5 years ago

So, there's a few factors in my own choice of shopping that makes them a bit redundant:

1) 25 years ago, supermarkets (with exception of Coop) didn't really sell appliances, books, video games consoles, etc. in the same quantity that they do now. So people don't need to go to a department store as frequently because of that, because they can pick up household. It's maybe not the best example, because it's been killed by the collapse of Philip Green's empire, but until recently my local Tesco had outlets for Topshop, Outfit, etc. in it. Sainsbury's has Argos in it in lots of stores now. And these are much more local to people's houses.

2) On top of that is online shopping. That's another place you can go that's more convenient than going to a department store. They have stock online! Often department stores did not.

3) When you do go to a department store, they're usually more expensive for the same or lower quality as elsewhere. John Lewis and Selfridges are the only ones I've purchased anything in in the last 10 years and that's because they have a good range of stuff, and for John Lewis in particular, it's known for having good customer service on things like returns of faulty goods and long warranties. It's also the only one of them that actually had stock in? Debenhams and BHS prior to closing were a mess for e.g.

beojan• 5 years ago

An alternative way of phrasing your first point is to say supermarkets are turning into department stores.

mbg721• 5 years ago

The US also had the opposite phenomenon, where discount department stores (WalMart, Target) started having larger and larger grocery sections.

jillesvangurp• 5 years ago

There's that and there's the notion that in a lot of countries, struggling department store chains have ended up in the hands of hedge fund investors, who promptly started squeezing them for money. It's a parasitic form of company ownership where the share holders enrich themselves and then eventually ditch what little remains of the companies they get involved with. One of the financial constructions you see a lot when that happens is the hedge-fund selling off the buildings, funneling the gains to shareholders, and leasing back the building. This raises cost which they then compensate for through "restructuring" rounds (i.e. layoffs). Once all value is squeezed out, they sell for a small price or bankruptcy is triggered. Everybody looses, except the hedge fund investors. Once companies get to the stage hedge fund investors get involved, the writing is on the wall. I think of them more as a symptom then a cause. Weakness through eroded business and failure to adapt come first.

youngtaff• 5 years ago

Most department stores were crappy shops and they've lost out as specialist retailers have become more common (particularly in fashion)

Online has put a dent in ‘high street’ revenues but even in the UK (where online is huge as a proportion of total sales), many hight street retailers are doing OK, it's the ones that aren't different that are suffering the most

afarrell• 5 years ago

It seems like WeWork has a significant opportunity to buy departments stores in commuter towns and rent to people who want to regain their sense of work-life balance.

DrBazza6• 5 years ago

The demise of department stores in the UK has been partly driven by the rise of supermarkets and out of town retail parks.

UK towns are historically car unfriendly, frequently jammed with traffic, and car parks are costly. Local councils have permitted out of town retail parks with their own free parking often building new dual carriageways and roads to reach them. People preferentially go there instead.

Supermarkets moved out of town, so no need to go into your local town for necessities, i.e. food any more, therefore no more casual shopping. And lastly supermarkets and other shops have started selling clothes, kitchenware, and electronics all of which used to be in department stores.

There's no necessary reason (food) to venture into your own town any more.

Local council planners mostly caused this, and the internet finished them off. The irony that every local council in England talks about 'saving the high street', without the self awareness that they caused the problem, and are still causing it.

baybal2• 5 years ago

I found your answer very insightful. Did you research this professionally?

Veen4• 5 years ago

UK towns are historically car unfriendly

What’s the alternative? Most town centres were planned in previous centuries. Councils can’t save the high street by tearing down the medieval streets and rebuilding them so they’re more like US cities. Besides, most towns have park and ride for precisely this reason.

DrBazza6• 5 years ago

If I knew the alternative, I wouldn't be a keyboard expert on the subject :D

In my part of SE England, there's 2 towns in the entire country that have park and ride. And it's hardly used.

We genuinely need 'build new villages', rather than 'surround towns with bland housing estates and retail parks'.

Until the UK local government town "planners" plan, the problem is here for decades.

nine_zeros• 5 years ago

What about high rise (3 storey store with 3 storey parking) department stores in city/town centers? I've seen plenty of these in Asia

pharmakom2• 5 years ago

The Netherlands shows how this stuff can be done. Unfortunately the UK is allergic to borrowing the best ideas from other countries. A grand NIH syndrome.

FridayoLeary• 5 years ago

London councils, with their predatory parking restrictions are helping to stifle the high street further.

DrBazza6• 5 years ago

It's just the same out here in the shires. My local council charges something in the region of £4 for 2 hours. I say "something" because as you might guess, and from my parent comment, I have no reason to go into the town, and that's what I can remember from about 3 or 4 years ago!

My council claim it's a source of revenue, but then moan that they own the shops in the town and no one is taking up leases. Local shop owners have begged the council to make the car parks free on a trial to see what happens, and the council's response was a) increase the parking fees, b) sell off a car park to a property developer who built an office block, c) sell off a second car park for some 'outdoor cafe culture' development with flats (because the UK is warm in the evenings all year round).

hkt5• 5 years ago

Councils are trying to encourage you to travel more sustainably, and they're doing that by valuing the land you're using for parking appropriately. The fact is, free parking is subsidised parking and it isn't right that public authorities are subsidising your choice to drive.

diordiderot• 5 years ago

Shops in car free areas are often multiples higher in revenue.

Cars emit pollution and particulates that harm every one around them.

They require ever increasing subsidized infrastructure. Google induced demand.

They contribute to obesity.

They kill millions accidents.

If it weren't for the government intervention you wouldnt be driving.

CodeGlitch• 5 years ago

Local council planners mostly caused this, and the internet finished them off. The irony that every local council in England talks about 'saving the high street', without the self awareness that they caused the problem, and are still causing it.

Many town centres are now full of cafes and restaurants. I think with a few "quirky" shops mixed in it can work out quite well. Ie going to the town centre is something you do at the weekend to enjoy a few hours out the house.

nitwit005• 5 years ago

There are some towns here in California where the town center has a bunch of restaurants, wine and brewery places, and antique stores.

It's nice for tourists or for business lunches, but kind of dead for any other purpose.

hogFeast4• 5 years ago

The US went through exactly the same phase after WW2: suburbanization, increase in car transport led to the death of single-location department stores which were concentrated in the city centre.

This didn't occur in the UK because of better public transport, and less suburbanization (marginally).

All of the stuff you say is correct but local councils, generally, didn't approve retail parks...they just couldn't find a good enough reason to say no or they were built just outside the council area. And now councils are reaping what they sowed because they stopped houses going up in cities...now the locus of money has moved to the suburbs as new houses get built (and, somewhat unbelievably, councils made this worse but shutting down car parking on high streets during Covid...the economic mismanagement is staggering...but all due to their greed around house prices and trying to restrict cars to boost house prices in the areas local councillors live).

For a roadmap, look at the US after WW2 (we are somewhere in the 60s when independent department stores started failing en masse). We had department store chains built up in inner city areas so the collapse is, if anything, more violent. Most high street areas/shopping centres will fold, Debenhams was an anchor tenant in so many shopping centres. Tier 2 cities/towns high streets will be literally deserted in a few years. Most retailers that anchor shopping centres will fail (the big one that hasn't failed already is M&S, even Sainsbury's is vulnerable because I believe they anchor some small shopping centres), and you will see new chains thrive as retail parks spring up. I live near a town with under 10k people, they have put a retail park there with 4 stores, and before they all opened they added another two units. Aldi, Home Bargains, Food Warehouse...all fast growing chains offering products that undercut all the old economy shops.

It is really great to see. A lot of these chains are offering real value. In the town I mentioned, it was only Tesco who was known for gouging in locations where they were the only shop in town. Now they are being overrun: Tesco, Sainsburys, Aldi, Home Bargains, Food Warehouse.

kevin_thibedeau• 5 years ago

These places do still exist in the US. They're typically pre-war suburbs where surrounding density is high enough to prevent box stores moving in.

DrBazza6• 5 years ago

I think the problem with (UK) retail parks is that they're all large and chain owned units. My point is that not far from me there is a farm that chose to convert itself into a retail park of sorts. The tenants are limited by size, and the owners chose a couple of food places, a butchers, bakers, and grocers. All independents. Ironically everything a small town or village used to have.

And business is roaring. There's clearly pent up demand for (perceived) quality and old-fashioned shops.

I made a comment on another thread, but I think the UK planners should aim for this kind of thing, a smaller retail park with traditional (food) shops, not one massive supermarket. Basically almost a satellite 'village' around a typical town.

I'd walk past a dozen Tescos for a decent butcher and baker where I live. Perhaps it's an age thing.

fy20• 5 years ago

When I was young the nearest town (my parents lived outside in a village) had a bustling high street and everything was in the town centre. You could go there and spend hours shopping in different places without issue. There were supermarkets, department stores (yes multiple), bakeries, butchers, toy stores, etc. This is a town with a population of 20,000, but the wider area it covers is easily 3-5x that. It was a small town though, so if you wanted something else you needed to go to the city (1.5 hours drive away).

20 years ago Tesco opened a new store outside the town centre, it's still quite small compared to some stores though, with very little non-food. A McDonalds opened outside the town on a main road, which was the final nail in the coffin for Wimpy. Other than that, not much has really changed. The town has expanded a lot, with lots of new housing being built (the population has gone up by around 25%) but no new retail parks have appeared.

Today the town center is pretty much dead though. This started maybe a decade ago, a Starbucks opened and within a couple of years it shutdown. A few years later banks started closing or relocating to smaller units. This past year even charity shops closed down or relocated to industrial units outside the town centre. Business owners say the problem is the rent is too high. I'm not sure it's just that, but yeah, in the UK the high street seems dead today...

dazc5• 5 years ago

I remember buying a toaster 20 odd years ago. I had to drive 5 miles to Currys, decide which of the dozen or so toasters on display would fulfil my needs, ask a salesman to get one for me and then suffer the hard sell on the benefits of an extended warranty before I could pay for it and return home.

Buying a TV would be a similar experience but would involve visiting 3 or more stores to compare models/prices. The chances of returning home with a TV were slim though - at best it would be delivered a day or two later.

Some things have improved at least.

dazc5• 5 years ago

The problem with many town centres though is that they were never designed to accommodate a large volume of cars. Placating car drivers has the effect of alienating pedestrians so you lose either way.

tailspin20194• 5 years ago

Fellow Brit here and I mostly agree with this assessment.

The irony that every local council in England talks about 'saving the high street', without the self awareness that they caused the problem, and are still causing it.

I'm not one to stick up for local councils (pretty much ever) but I think the writing was on the wall regardless of what they did. You're right that they started the demise of the town centre with everything you've outlined, but frankly the internet was the tidal wave that shortly followed and it really wouldn't have cared too much what local councils had done or not done. This shakeup was going to happen one way or another anyway.

As we progress forwards, everything trends towards being commoditised. We automate, scale up, and what was once specialised is now general.

The supply and retailing of goods used to be a much more specialised endeavour. Just owning a business (eg. small highstreet shop) which sourced goods from disparate suppliers and made those goods available for you to browse and purchase used to be a more specialist/niche pursuit. That's no longer the case. Almost all retail has been fully commoditised now, and retailers (particularly small shops in town centres) can no longer survive if they just think of themselves as "retailers". These businesses need to think "what is it that we provide to customers, _other_ than our physical goods?" And if you're in a competitive area (eg. book sales) - is the value that you're adding, on top of the baseline service of "commodity retail of books" enough to differentiate you from your competitors, both online and off?

The mistake that some of the larger retailers have made, is that they've seen the efficiency benefits and economies of scale, and the commoditisation of their industry, and taken advantage of them aggressively, without realising that by doing so, they were slowly eating their own business model.

I imagine that, in the panic of trying to compete with online retailers, a lot of big department stores have focussed too much on cutting costs and streamlining (in order to offset their rapidly falling profits) and not enough on actually changing/updating their model to add value to the customer experience in ways that online retailers cannot.

A business like John Lewis needs to decide if they're in the commodities business or the customer experience business. If the former, then fine, outsource away, mass produce, cut your staff training costs, but then all you have is your baseline retail, which means you have to compete with EVERYONE else that sells the same things, and a chunk of those people just sell them online, without the overhead of physical stores.

If you're in the "customer experience" business (which arguably any business that has a physical presence is to some degree), then you need to be very careful about the things you choose to streamline and cut costs on. Staff training and retention needs more focus. Additional value-add services need more focus (and not just bullshit low hanging fruit psuedo value-add, like "extended warranties"). The design of the physical environment itself needs more focus.

There is a way to get people back into town centres. It does (in the UK at least) require some focus on infrastructure but it also needs the businesses that populate those town centres to become very clear about what their priorities need to be in order to attract customers and to provide something that their online counterparts can't.

As a side-note, Apple stores have done particularly well over the years partly because the experience you get in them (and it's admittedly not always good) is totally unique. You literally cannot go to any other place on earth and get the same experience and service that you get from an Apple store. Now it's a bit of an unfair comparison to small high-street retailers - Apple have an advantage because they have such a tight control over their retail experience and their service/repair options (don't want to get into that debate) but the fact remains that Apple stores consistently still draw massive footfall because there are very specific and unique reasons for customers to go there. And they invest, heavily, in the training of their retail staff, the physical environment, and provide high value in-store services that are demonstrably worth the trip for their customers.

DrBazza6• 5 years ago

Commodity retail is an interesting point I hadn't thought of. With freely accessible 'everything', these days, there's no 'unique selling point' to a lot of high st. businesses, so you're correct about 'customer experience' over 'commodities'.

jussij2• 5 years ago

I'm sure the UK voting to remove itself from the rest of Europe with the 2016 Brexit referendum hasn't helped the situation.

One of the big selling points of Brexit was the promise of stronger UK borders.

Brexit has certainly delivered on that front with the UK now finding itself well and truly isolated from the rest of Europe.

rjsw• 5 years ago

I wouldn't expect Brexit to make any difference to department store sales.

Veen4• 5 years ago

Yes, bloody Brexit. Yesterday I cut my finger while slicing a British tomato. Probably wouldn’t have happened if it was a Spanish tomato. Brexit is a menace. I mean, never mind that BHS went out of business years before the referendum. I’m sure Brexiteers were behind it somehow.

jussij2• 5 years ago

The article states that 'since 2016, 388 department stores have been shut'.

The Brexit referendum was in 2016.

robjan• 5 years ago

The department stores were on life support long before Brexit. It's part of the general decline of the UK High Street but also failure of the stores to stay relevant.

blibble2• 5 years ago

I suppose the collapse of US department stores Sears and JCPenny were also due to brexit?

BHS went broke before the referendum, and Debenhams were in trouble for years before it

the department store business model simply can't compete with online

ksec• 5 years ago

UK e-commerce is now 30% of Retail [1]. And Growing.

Along with other issues mentioned in this thread such as quality, market positioning, pricing etc.

I mean, Look at Mark and Spencer.

[1] https://www.ben-evans.com/benedictevans/2020/11/22/finding-a...

neverminder• 5 years ago

Some clothing stores will close, others will remain open. Clothes are not moving 100% online any time soon. Anybody who bought clothes online must know what a pain in the ass it can be.

Here's my personal example from a couple of years ago. I live in UK and there was this Levi's jeans model that fit me very well, but there were only 2 colors. In USA however the same model had like 20 colors. So I bought these jeans online from USA, the same model, exactly the same size, just different color. When I received them I couldn't fit them on.

skhr0680• 5 years ago

I had the same experience ordering online from Uniqlo. I’d say their jeans sizes have an inch variation in either direction, depending on who sewed it.

mabub24• 5 years ago

Also, the vast majority of websites for online clothing stores are complete garbage, slow, messes, that feel actively user hostile.

mrspeaker• 5 years ago

From what I witnessed from coworkers in the US, it was very common to order 5 variations of the same thing, then send 4 back.

"Free shipping/free returns" seems like an environmental disaster, but I think it's becoming the norm.

spiralpolitik• 5 years ago

The demise of the department store is largely due to them squandering their biggest advantage which was customer service and customer experience.

When I was younger, I remember the quality of service you got from a department store. The assistants would help you shop, make suggestions, were knowledgable about the products etc. You also got to know the assistants if you were a repeat customer in the smaller stores.

This model largely disappeared in the 80s when it became a race to the bottom and about maximizing ROI. As soon as this happened the out of town supermarkets won as they could always go lower.

If there is any hope for the high street it's in focusing on the customer experience rather than trying to compete on price.

Rd6n6• 5 years ago

I used to love chapters in Canada as somewhere you could go to sit and browse books casually in comfy chairs, and just loiter. I spent a ton on books back then. Now those chairs and tables are almost entirely gone. It doesn’t make sense, they can’t compete on convenience or selection, so why toss out the in-person shopping experience advantage?

Waterluvian• 5 years ago

Because they need the extra space as they slowly turn into a Bed, Bath, and Beyond.

The last Chapters I visited was about 1/3 housewares.

bsder• 5 years ago

The demise of the department store is largely due to them squandering their biggest advantage which was customer service and customer experience.

And inventory. And different inventory.

It used to be that each department store had different fashions. As such, there was a difference between each chain. However, once they all started selling the same Chinese crap, there was no differentiation so why buy ono anything other than price.

And department stores used to have inventory and more than one of each size. How many times do you need to go into a department store and find that they don't have your size before you quit going in at all?

Spivak• 5 years ago

I wouldn’t blame China for sudden demand for extremely cheap goods. They’re just responding to the same market incentives like everyone else. You see this race to the bottom in every market segment not just the ones that are typically supplied by Chinese manufacturers.

l33tman• 5 years ago

China is a billion people economy, it's a strong opinion to say that "everything out of china is the same crap". You can order anything for manufacture there at any quality point and nobody forces a dept store to order the exact same clothes from the exact same factory (out of tens of thousands factories) as the neighbour store.

I'd attribute it to laziness. I mean, they might actually DO check where the neighbour store orders from and order the same.. :)

Then again all the clothing stores where I live have inventory and different sizes and definitely sell different things than the other stores so I guess this trend is not universal hopefully..

tellersid2• 5 years ago

I also suspect we forget how in the "good ol days" that you would go into a department store and they wouldn't have your size even before the internet and cheap goods.

I absolutely remember this with sneakers a few times. Oops, sorry that size is out of stock. Go to a different store, oops sorry that size is out of stock. Could go to 3 different locations and still come home empty handed.

To believe department stores use to always have every size is simply not reality IMO.

robbedpeter• 5 years ago

The fundamental trouble seems to be that market has collectively decided that the cost of good customer service is a value consumers are willing to lose in exchange for cheaper goods.

The endless consolidation of profitable businesses into ever larger corporations transforms places of business into inhuman constructs where comfort, care, and other aspects of good service get buried by unexpectedly perverse incentives: Avoiding litigation Maximize profit Higher costs of tracking employee misconduct leading to ineffective internal accountability. Once you have thousands of people acting as customer service agents, no amount of culture or rules or management can cure the natural distribution of human populations. People will find ways to do just above the minimum required effort to appear satisfactory.

Employee productivity becomes subject to pareto distributions with a tiny number of high quality workers and a majority being merely average. Throw in the modern "gig" culture where nobody stays for longer than 3 or 4 years, and good customer service becomes very expensive and vanishingly rare.

Capitalism, as she is wrote, contains fundamental structural incentives that keeps accountability to the consumer priced out. Society has imposed the burden of product safety (and other tangible effects) through legal means, but social niceties and good service are harder to legislate. Rebuilding capitalism into something far more human friendly will be one of the grand philosophical and economic challenges in the near future.

AndrewDucker• 5 years ago

I went to John Lewis for some blinds, thinking that they were more expensive but the service would be good. Turns out that they outsource it, and that it took three weeks to get someone out to measure my widows, three weeks to get the blinds made, and three weeks after they came back to book in a fitting.

The next time round I went with a small local shop and had the whole thing done in less than a week.

I'm not paying extra for worse service.

sgt101• 5 years ago

If there is any hope for the high street it's in focusing on the customer experience rather than trying to compete on price.

Which the ma & pa stores that are taking smaller units provide - the problem is the big units that the department stores vacate; only supermarkets & discounters want them.

I think that the big hope for the highstreet is the coming correction in commercial property - eventually rents must fall, when they do the highstreet should repopulate.

dannersy• 5 years ago

I have recently moved from the United States to Sweden and was surprised that basically every store has great service. It was quite refreshing to go to a tech/PC hardware store and have the person behind the counter not only know what I was talking about, but actually be experts in the products they sold. So many times in the past I would go to BestBuy just to see if they had what I needed (I assumed the experience would be negative). When I got there, I'd have trouble finding what I needed, assumed correctly that the employee would have no idea what I was talking about, then I would find that they didn't have it or it was priced higher than the convenience was worth of having it right now. To be clear, I don't blame the kid trying to help because they almost always genuinely wanted to help, but it was BestBuy. Something they are doing doesn't bring me back.

I have no idea how well these stores in Sweden are doing, but it reminds me of the old experiences at a Sears where when you wanted a power tool, the rep behind the counter could give informed recommendations based on what it was you were trying to do. I suspect it has a lot to do with Sweden paying these folks a living wage. I scoff at the idea of going back to working retail in the US, but here it seems like there is actual expertise and more career options for it.

So much to say, I'm surprised how much the service aspect of the experience in stores matters and actually see myself leveraging in store service more in the future since Amazon isn't as convenient as it is in the US. Actually, I'd argue this may be preferable since it seems common that the employees can actually help me choose instead of wading through hundreds of fake online reviews.

rightbyte• 5 years ago

Amazon and Uber are solutions to American problems.

I guess for example Home Depo killed off specialist shops with expertise? Then you can aswell buy the cheap crappy tools on Amazon.

tellersid2• 5 years ago

It also went too far though as well.

I remember I stopped shopping at Circuit City because you couldn't walk 10 feet without someone asking you if you need help finding something. If you wanted to browse the CDs you would have to tell 3 people you didn't need any help and were just browsing. Walk to a different section, "no thanks I don't need help, just looking."

It was an utterly ridiculous shopping experience.

intricatedetail• 5 years ago

- underpaid staff

- outdated stock

- expensive

- high tax (business rates) and rent

Basically greed and treating shareholders as customers and customers as the product killed it.

And convenience of internet...

blippage• 5 years ago

Shops in general have been struggling. It is unrelated to COVID.

Rent and rates are too high. Simple as that. My dad was talking to our local hairdresser, and she explained the huge costs involved for such a simple business. Water rates were well beyond what she considered reasonable. She closed her business (before COVID), which is sad.

Rent is, presumably, something fixable by the market (although there's scant evidence of it so far). Rates, not so much. When I explained online that business rates needed to come down I was greeted by the response "but councils NEED that money". It didn't seem to occur to the woman online that business people make business decisions. If it's not profitable to run a business, then they won't. Businesses are not geese that lay golden eggs in the quantities required. You throttle their necks too hard, then they die. Then you get nothing.

There's no doubt, of course, that Amazon has had a huge effect. I can get things that would be very difficult to get otherwise.

UK loses 83% of department stores since BHS collapsed

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