Ecommerce – the death of the high street?

Amidst recent reports that the Arcadia Group may be split up to be sold and prevent a total collapse, and following the numerous store closures of some of our favourite retailers, Charlotte Newlyn, a Solicitor in our Corporate & Commercial team, considers the continuing rise of ecommerce and questions the fate of the high street as we know it.

Ecommerce, the wonderfully-convenient use of the internet to buy and sell goods and services, currently accounts for just under 20% of the UK’s total retail sales. However, with decreasing delivery times – some retailers promise to deliver items in as little as 30 minutes – and increasing choice, paired with the fact that Britons are working harder and more than ever before, a study by Retail Economics predicts that ecommerce could account for 53% of retail sales in less than 10 years.

So, as we see more empty shops on our high streets, it would seem that the rise of ecommerce comes at a price – the downfall of physical shops.

There are some obvious perks to creating your own online business: low expenses or “rent”, in the form of your domain and website creation; low running costs, given the frequent lack of any physical office space; and, depending on your business model and product, a complete lack of any of your own goods or services (think AirBnB, Uber or eBay, who simply provide a platform for others to sell their goods and services).

However, it has been proven time and time again that people engage with people. Despite generational shifts, which have been partially-credited with powering the increase in online sales, we are social beings who enjoy interaction with others. Face-to-face business still works, and so there must be a balance to be found between ecommerce and physical shops; the balance between the two must eventually reach an equilibrium. It seems that online businesses recognise this, with a number of them opening brick-and-mortar stores to meet consumers’ needs, so it is conceivable that the rise of online stores may in fact lead to an increase in physical stores.

Of course, all retailers must adapt as times and trends change, that much is true for any business. But it isn’t all doom and gloom – we mustn’t look past the new shops and businesses that open daily across the UK, and it is encouraging to see communities calling on authorities to protect their high streets, with landlords being asked to reduce rents for businesses and the government being called on to tackle business rates.

Though the grass may look greener, ecommerce is facing its own form of resistance. As GDPR settles in and embeds itself in to our everyday lives, online shoppers are becoming increasingly aware and unsure of providing and allowing businesses to store their personal information, with growing numbers of consumers limiting the amount of data they share with the companies they buy from.

Despite the economic climate, more start ups are emerging every day and entrepreneurship is still very much a viable career. Whether you plan to trade online or on the high street, setting up your own business is exciting, but it can be daunting. We can not only assist you with the incorporation of your business but we can also advise you of your corporate governance obligations, draft bespoke terms and conditions and negotiate various trading contracts or internal agreements. We also work closely with our Employment team, ensuring you meet your employer’s obligations and have adequate service contracts and policies in place.

Contact IBB’s Corporate and Commercial team for more information

If you are planning to start your own business and would like more information on this area, or you require legal advice in relation to any Corporate or Commercial law issues, please contact the team at IBB on corporate@ibblaw.co.uk or call 01895 207264.