High Street 2020: Apple stores and glorified post offices

Stephanie Clifford of the New York Times reports on the growing trend of retailers using their brick-and-mortar stores to gain an advantage over online-only shops like Amazon, taking advantage of easier delivery, more comforting payment mechanisms, and the ability to browse:

In April, Walmart began allowing shoppers to order merchandise online and pay for it with cash at a store when they picked it up.

Even without the cash option, in the six years since Walmart has allowed online items to be picked up in stores, customer demand has been high. More than half of the sales from Walmart.com are now picked up at Walmart stores, Mr. Anderson said.

With the cash option, Walmart was trying to appeal to customers who did not have bank accounts or credit cards. Walmart says the majority of in-store purchases are made with cash or debit cards, and that about 15 percent are made with credit cards.

Retailers have varying motivations for doing this. Clifford discusses the Container Store, an American chain that sells containers (brand simplicity, there):

The Container Store has also been pushing a drive-through service, a reflection of its altered approach to online shopping. Initially, executives viewed the pick-up-in-store feature as a way to draw consumers into stores and encourage customers to buy more. Now, they would rather close the deal on an online order as soon as possible so shoppers do not go elsewhere or forgo the merchandise altogether.

The piece ends with Alison Jatlow Levy, a retail consultant at management consultants Kurt Salmon predicting a convergence, with physical stores moving more and more towards a "showroom" model, and online-only retailers opening stores for the same purpose.

That may be the case in the medium-term, as the two styles of retailing meet at an equilibrium, but it seems unlikely to last. A physical location is a tremendous fixed cost to run, and while Clifford gives many stories of tangential benefits from doing so, none of them seem game-changing. If a business already have a chain of stores and a website, merging the two in the many ways described seems like a no-brainer. But if it doesn't, it's hard to see how the bottom line would actually be affected in any way but negatively.

What seems more likely is that as many of the benefits which can be abstracted from the cost of running a shop will be. As Felix Salmon points out, there are advantages to retailers in being able to take cash payments, even for online orders, and having somewhere to ship bulky goods for collection seems to be popular as well. But both of those things require little more than a posh version of the Post Office; somewhere which can handle the more methodical side of the transaction for a number of businesses at once. And such companies already exist.

All that would leave is the showroom aspect of the physical store. Can any company gain enough extra sales through physical viewing of items to make up for the extraordinary increase in cost? There are probably a few categories where the answer is yes.

The most obvious is products that are already sold in showrooms due to the high cost of the goods: cars, boats, motorbikes and so on. Things which people really need to see and touch before buying, and which are so valuable that a single sale can make a day. There's a second advantage as well, which is that cars are so bulky that the showroom essentially doubles as the warehouse. A car retailer which decided to move online only would still need to have physical premises almost as large, just not in quite as expensive a location.

Clothes are the other clear winners. People still really like being able to try on things before they buy. But the problem for many retailers is that you can go to, say, Office to try on some shoes, then buy it from a cheaper retailer online. Office loses a sale, but still pays for the advertising.

The solution to that is retailers like Apple. Famously, the company doesn't care if people go into their shops purely to use them for the free internet; their aim is to get as many people using Macs, iPads and so on as possible. That doesn't mean that it isn't relentlessly sales focused – it is – but if, at the end of a trip to an Apple store, you go home and buy a MacBook from Amazon, it still gets the sale. Apple stores are just as much about advertising as retail.

It doesn't paint a particularly rosy picture for the high street of the future – lots of high-end, single-brand stores peppered with glorified post offices – but it's probably better than the alternative thesis, where everything becomes a coffee shop.

A Meerkat posts a letter. This definitely relates to the content of the article. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Brexit could destroy our NHS – and it would be the government's own fault

Without EU citizens, the health service will be short of 20,000 nurses in a decade.

Aneurin Bevan once said: "Illness is neither an indulgence for which people have to pay, nor an offence for which they should be penalised, but a misfortune, the cost of which should be shared by the community."

And so, in 1948, the National Health Service was established. But today, the service itself seems to be on life support and stumbling towards a final and fatal collapse.

It is no secret that for years the NHS has been neglected and underfunded by the government. But Brexit is doing the NHS no favours either.

In addition to the promise of £350m to our NHS every week, Brexit campaigners shamefully portrayed immigrants, in many ways, as as a burden. This is quite simply not the case, as statistics have shown how Britain has benefited quite significantly from mass EU migration. The NHS, again, profited from large swathes of European recruitment.

We are already suffering an overwhelming downturn in staffing applications from EU/EAA countries due to the uncertainty that Brexit is already causing. If the migration of nurses from EEA countries stopped completely, the Department of Health predicts the UK would have a shortage of 20,000 nurses by 2025/26. Some hospitals have significantly larger numbers of EU workers than others, such as Royal Brompton in London, where one in five workers is from the EU/EAA. How will this be accounted for? 

Britain’s solid pharmaceutical industry – which plays an integral part in the NHS and our everyday lives – is also at risk from Brexit.

London is the current home of the highly prized EU regulatory body, the European Medicine Agency, which was won by John Major in 1994 after the ratification of the Maastricht Treaty.

The EMA is tasked with ensuring that all medicines available on the EU market are safe, effective and of high quality. The UK’s relationship with the EMA is unquestionably vital to the functioning of the NHS.

As well as delivering 900 highly skilled jobs of its own, the EMA is associated with 1,299 QPPV’s (qualified person for pharmacovigilance). Various subcontractors, research organisations and drug companies have settled in London to be close to the regulatory process.

The government may not be able to prevent the removal of the EMA, but it is entirely in its power to retain EU medical staff. 

Yet Theresa May has failed to reassure EU citizens, with her offer to them falling short of continuation of rights. Is it any wonder that 47 per cent of highly skilled workers from the EU are considering leaving the UK in the next five years?

During the election, May failed to declare how she plans to increase the number of future homegrown nurses or how she will protect our current brilliant crop of European nurses – amounting to around 30,000 roles.

A compromise in the form of an EFTA arrangement would lessen the damage Brexit is going to cause to every single facet of our NHS. Yet the government's rhetoric going into the election was "no deal is better than a bad deal". 

Whatever is negotiated with the EU over the coming years, the NHS faces an uncertain and perilous future. The government needs to act now, before the larger inevitable disruptions of Brexit kick in, if it is to restore stability and efficiency to the health service.

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