Is it really price wars that drive shops to close?

Juha Mattsson

Photo credit: "Elder Elder Beerman" by Nicholas Eckhart is licensed under CC BY 2.0

Recently The Guardian has written about a Local Data Company (LDC) research report with a finding that the levels of empty stores are significantly higher in northern England compared to south. In the story, the reasons for shop closures (and differences thereof) are attributed to price wars, traditional shops closing down, and the expansion of convenience stores, among others.

Price wars, demographic changes and shifts in consumer tastes naturally cause constant variations in the popularity, accessibility and of course the profitability of different physical stores and locations, in general across the UK. However, additional trends like online shopping continues to affect the viability of physical stores.
First, online buying has steadily grown in the past decade and a half. Web stores like Amazon, Zalando and countless others entering the space naturally puts increasing pressure on physical stores. As more and more products are bought online, physical stores face less demand. This has meant that chains have had to downsize the number of stores to match new levels of demand.
Second, is we have also seen many retailers fiercely revamping their in-store buying experience to match the convenience and assortment available in online stores these days. Most advanced retailers are building omni-channel buying experiences to ensure shoppers get a unified, equal level of service, availability and convenience - regardless of whether they buy online, physical stores, or on mobiles.
Retailers need to work towards linking the online and offline channels together — so if you started shopping online by browsing products, you could then conveniently continue from where you left as you enter into a physical store, and complete your purchase there. Or return back to the product online if you were browsing in-store.
This level of advancement requires new technology, especially in physical stores, including detailed metrics on in-store customer behaviour, ability to engage customers via smartphones, targeting personalised marketing in-store, and allowing mobile payments.  
However, the largest change is in the sales concept and processes. The retailers that master this will be the ones to pull down stats on empty store locations.

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