Tamebay comment: Comet, Argos and the death of the High Street
Even the most casual observer of retail trends over the last fifteen years cannot have failed to notice the irresistible rise of ecommerce. Indeed, this week it was reported that one third of all retail sales will be online by 2022.
And in the news on Thursday came the unsurprising headline that electronic chain Comet will be going in to administration. Some reports called Comet the “internet’s latest casualty” But that suggests Comet isn’t responsible for its own fate. Whilst obviously there must be concern for the thousands of staff who will likely be laid off, why should there be any sympathy for Comet itself?
Comet’s failure stems from an inability and reluctance to adapt to changing consumer trends over many years. Comet has ignored evolving shopping habits, developing consumer expectations and has displayed a woeful lack of awareness of technological advance.
Comet wasn’t an attractive place to shop. I recall visits over several years and remember pushy sales staff promoting products they took commission incentives on rather than what I wanted to buy, prices higher than other outlets both on and offline and the relentless up-selling of needless, over-priced insurance packages at the checkout. Comet relied on dinosaur practices.
Compare and contrast Comet’s refusal to change with Argos. They announced recently a scaling back of their famous printed catalogue, retrenchment in their High Street presence over five years and the adoption of a ‘digital first’ strategy. Bold moves from an established company. But then Argos have benefited before from taking radical steps. The promotion of the ‘Click & Collect’ service has proved to be a huge success for them in the past few years.
Deloitte recently noted that the High Street focus on high sales volumes and high shop numbers was holding them back and several had too many outlets. Deloitte predicts that 4 out of 10 retail chain shops will close in the next five years and recommends that companies with spare cash should use that now to negotiate their way out of leases that could prove to be very expensive and burdensome in the long run.
It seems that many High Street firms are still concentrating on bricks not clicks. But some are taking advantage of the new retail economy. John Lewis now enjoys 25% of its sales from online and the ‘Click and Collect’ service has grown 77% in the past year.
That firms like Game, HMV, Waterstone’s and Comet have problems suggests that some products will inevitably only be available online. Consumer electronics, music, games, DVDs and books surely head that list. Growing fashion sales online should be a wake-up call for retailers in that sector.
But this isn’t just a boring tale of digital vs. the High Street. Ecommerce itself is an arena of intense competition and commensurate innovation. Amazon is getting smarter, pioneering drop boxes where buyers can collect their purchases at their own convenience. Stateside, Amazon is also investing heavily in a network that can deliver the goods ‘same-day’.
eBay and others are reacting to the astonishing rise of mobile commerce. Smartphones are changing how people shop online and consumer expectations are growing. These are young companies that are changing. And the pace of development is fast.
Reports of the death of the High Street are greatly exaggerated. But the apogee of clone High Streets and soulless out-of-town malls has passed. The big chains must realise that they must be ‘bricks and clicks’ operations and that when you get more clicks, you need fewer bricks.
In many ways the possibilities are tantalising. As chains depart, they leave a vacuum that could be filled by the hopeful and imaginative pop-up shop movement. There is also an opportunity for independent stores if rents fall and local authority rates become less onerous. There remains a passion for exciting local enterprises offering something special, providing a unique experience and delighting customers in a way ecommerce never can and big chains never have.
Only this week, by way of example, the queue of people to meet David Attenborough at my local bookshop, City Books in Hove, snaked down the street. That’s because they cultivate a loyal following and don’t just sell books these days. They organise events and signings, provide superb personal service with a friendly smile and are part of the community. Long may they prosper.
High Street retailers need to evolve and respond to the digital challenge. Pureplay online retailers need to innovate and flex with the changing ecommerce landscape. Change remains the only constant. And none of that should be a cause for concern: the future will likely be better than the present. “Business as usual” is a suicide note.
Books have always been a problem on the High Street. In BBIP(British Books in Print) the “Bible” of what Books are available there are about 600,000 Books Listed. No Bookshop(even those that claim to stock everything) can stock even one of each of those.
In addition there is a saying “The Average Bookshop sells of the average Book 3 copies”. So when I was still actively Wholesaling it was frustrating to be continuously receiving orders for 3 copies of each book. I would be in a Bookship in say Taunton and they would have 3 of the Taunton Book and 3 of the Aberdeen Book. Yet common sense would tell you that they could sell more of the Local Taunton Book than of the Aberdeen. But still they would order 3 of each.
Today many Towns are Bookshop Free areas. Those that survive have found a niche. But the ones that I used to mainly go to the Specialist Bookshops have mainly closed.
In the future New(paper) Books will be mainly sold direct by the Publisher or online. But my experience with ebay is that they do not want New Books sold on ebay. They are happy with secondhand but not New.
There will still be a place for the High Street but I wonder if “Pop-up Shops” will save the High Street. Maybe at Christmas but what about the rest of the year. Councils across the country have worked very hard to close down the High Street. Car Parks and on street Parking where you need a Mortgage to pay for your Parking. Officious clowns who make life as difficult as possible for shoppers and Shop Keepers alike. Rents(some controlled by the Council but most by Investment Companies of one sort or another) that keep going up without any regard to the economic reality.
The situation is changing and will continue to change. Those that survive will be those that change with the circumstances. This is as true for the Town as for the Companies. Those towns that change and adapt will survive. Those that do not will find their town centres derelict or full of Charity Shops.
Didnt the Chinese have a saying which I seem to remember said “May we live in interesting times”. Well we certainly do today.
its not only the internet, thats goosed comet ,people only need so many tvs before they get set of upgrading , at one time you bought a tv and watched until it died, now if you cant see the blackheads on a nose in 3D its out of date
Does anyone seriously watch TV in 3D? Are there families out there fighting over the 3D glasses because I’m not sure I can be bothered.
You can tell them all, as they all look boss-eyed when in normal life….
“Does anyone seriously watch TV in 3D? Are there families out there fighting over the 3D glasses because I’m not sure I can be bothered.”
thats why comets down the slot
The 1 person in our family who CAN see 3D tv in 3D says it makes him feel sick while watching.
Does anyone seriously watch TV in 3D?
I used to watch TV in 3D. Even saw part of the Olympics in 3D. The problem is all the programming is awful. Then the networks blame the technology and cost rather than their awful programming and limit the programming even further. This is very similar with how HD was in the early days. The difference here is that when HD was starting its adoption was inevitable due to the law. 3D doesn’t have the same luxury.
3D gaming on the otherhand is a very good use of the technology assuming you can find a game that works well with it and are willing to pay NVIDIA around $40 for the special drivers.
One can’t help but wonder how many of Comet’s eBay shop customers will be let down. How many of them even knew that they were buying from Comet?
There was no indication on their eBay shop that they were Comet (until their website went down to replace eBay shop images and a “Sorry Comet.co.uk is unavailable” sign appeared).
That opens up another question… why are so many retailers trading under fake company names?
Not that uncommon really.
Many businesses have a variety of different trading names.
Classic online is a different trading name on Amazon, get’s better prices & buyers cannot directly compare with the cheaper prices you are having to charge on ebay.
Is it only me that keeps thinking that Tamebay are upgrading their site and I should come back later?
He he, maybe that wasn’t the best choice of image…. :D
The items that I, or my family have (would have) bought from Comet all needed delivery due to their size. This reduces the advantage of being able to go to a physical store as there is not any instant receipt of goods.
I know Comet sold smaller items, but their store location was such that it was out of town (in a depressing retail park) that was only worthwhile going to when a large items was required.
If Argos can capitalise on the on-line reservation system and get that working well then they have more of a chance. By making use of their branch network to offer same day delivery they could be onto a winner.
The linked article suggests that Argos is moving away from the order and collect model. By doing this they will reduce the range of items that they stock removing their advantage.
I suspect the dominance of the supermarkets is mostly to blame for the demise of the high street. They offer some of the most popular items (books, music, videos, toys etc.) that people would have bought from other retailers in the past.
And n most cases, cheaper!!
Mark, you make some interesting points.
I think that Argos is seeking to reduce the number of outlets it has but increase the items that can be collected.
The success of this will depend on where you are. I’d imagine that small towns will lose an Argos store and more populous areas retain them.
Or maybe Cities with 4 Argos stores (like say Norwich) could lose at least 2 of them.
That would still leave scope for new stores in places where there is presently a substantial ‘unserviced’ population.
Dan – great piece.
You mention how PopUps can fill the gaps left by the chains that don’t need so many bricks. Totally agree!
This is why StartUp Britain opened a first PopUp in late July; to fill empty shops with small businesses.
PopUp Britain is about to scale out nationally and hopefully coming to Hove soon!
surely the problem with pop ups is you have popped off by the time shoppers realise your there
I always liked Comet, in preference to Currys. I would buy anything from that Dixons Group sham
I was in a Comet branch yesterday. It seemed strangely calm. There was no mass discounting or apparent panic. In fact if it wasn’t for the fact there were a few empty spaces where items hadn’t been replaced you would not know that the company was on the verge of going under.
Comet fire sale has started!
No real bargains at this stage so unless you are absolutely curious don’t bother. Better to sit at home and surf for bargains on ebay.