Does the high street have a future?

Many column inches have been devoted recently to the “death of the high street” following extensive store closures and the demise of major household names such as Toys R Us, House of Fraser, BHS and so on.
Part of the blame has been correctly identified in the growth of on-line shopping, but the solutions proposed (such as cuts to business rates, consolidation of store in viable areas and complaints that on-line retailers should be subject to the same tax and rates regime as bricks and mortar operators) are part of an old business model which needs to be radically changed.
Although high-street retailers have set up their online operations to compete, they still see them as part of an overall business model based around the stores.
They don’t see that on-line shopping and the in-store experience are different models.
For me, the best analogue is the music business which was one of the first sectors to be disrupted by the growth of internet shopping.
The business model was built around selling physical stock in terms of CD’s from high street stores.
As the Internet took hold, with tracks increasingly available to down load at lower and lower costs, retailers reacted by trying to diversify into books, T-shirts and games and competing on price with deep cuts to CD’s which were becoming an increasingly outmoded technology.
Today, high street retailing of music is almost non-existent as HMV hangs on by the skin of its teeth.
The production side of the industry saw their profits eroded by the low prices and low commissions paid by online distributors at the same time as high street retail shrank.
People predicted the demise of the industry as artists and record labels struggled to make money.
Then came a radical re-appraisal.
Music had always been about performance, but the old business model was to use performance to sell physical product i.e. records.
What if the industry went back to its roots and made performance an end in itself, with record sales a by-product rather than an end in itself?
So we have seen huge investment in tours, festivals, the technology of stage production and consequent rise and rise in ticket prices.
Artists and their promoters now make far more money from performances and merchandise than they do from record sales.
They recognised a clear delineation between the listening experience, bought now mainly online, and the performance experience which on-line couldn’t replicate.
Herein lies the lesson for the high street. Instead of tying itself to a business model based around physical infrastructure to sell goods (where even on-line sales are just a virtual dimension to that model), retailers need to follow the example of the music industry and clearly distinguish between the “performance” experience, and selling physical products.
What can they do in-store which can’t be replicated easily on-line? How can they attract customers with experiences, events, tie-ups which they might pay for? In what ways can they replicate the changes to the music business where there had to be a re-alignment from record sales to making money from performance?
Unless the high street retailer is prepared to let go of old thinking in this way, we will continue to see the closure of stores and high-streets turning into ghost towns.

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