Does Amazon’s Push Into Oxford Street Mean The End Of The 5th Avenues?
London’s Oxford Street is the bustling city’s premiere strip for high fashion. Its boutique-lined streets are enough of a pull to allow the neighbourhood to double as a veritable tourist stop. Stores like Selfridges, Debenhams and John Lewis are institutions in their own right, but recently tech disrupters have been doing what they do best: disrupting.
Pop into fashion
The high fashion street is having something of its own Silicon Valley boom, shown earlier this month online retailer ASOS launched a pop-up shop in Marks & Spencer, the first brick and mortar location in the company’s history. The news was a curious turn of events in a year that’s seen a downturn in traditional retail. Mothercare, the UK’s number one maternity care retailer, has announced a plan to halve its 150 stores, after more than 40% of its sales migrated entirely online. Even Marks & Spencer itself isn’t beyond the pale, as the company has revealed it will close 30 stores, with an additional 45 stores potentially downsizing or transforming into food-only retailers.
This change in buying behaviour isn’t just relegated to where we buy, but how. While speaking at a conference, Steve Howard, Head of Sustainability for Swedish retailer IKEA, dubbed our current moment as “peak stuff”, equating this new kind of buying power to “peak oil”—a moment of excess that warrants closer examination. For over two decades, Britons have benefited from the lower prices brought about by the importing of cheaply produced Asian goods. This overwhelming consumption of material possessions has coincided with a deflated attachment to the actual items being purchased, which is to say, we buy more but care less.
Consumer vs environment
The excitement surrounding the purchase of your first smartphone, for instance, fails to repeat itself when you trade it in for their fourth or fifth. This isn’t just about the carbon footprint created by the purchasing and dismissing; it’s about an actual change in our relationship to things and the ephemeral quality of online purchasing power, which makes the appearance of online retailers in physical spaces particularly notable.
In late August, online mammoth Amazon announced its purchasing of grocery chain Whole Foods for £11 billion, proving that even the most aggressively online retailers see value in the physical world. Chinese e-commerce giant Alibaba revealed this week that it had purchased nearly one-third of Sun Art Retail Group, one of China’s most prolific superstore chains, for roughly $3 billion USD. The deal makes the online retailer one of the biggest shareholders in a store that helps fuels the second largest economy in the world.
Online vs in-store
The evidence tells the whole story: that online retailing isn’t a mere alternative or competitor, but rather a new kind of beast slowly merging with and replacing a way of life. According to John Rogers, chief executive of British catalogue retailer Argos, it is becoming increasingly impossible to distinguish between online and physical sales, as nearly 60% of orders are made online, but two-thirds of which are picked up in stores.
As more and more stores feel the effect of technology’s presence in the retail space—Amazon is planning a guerrilla pop-up store in Central London, intended to cater to Black Friday shoppers—one wonders if the fusion of online and real-life retailing is an olive branch or a last stand. With the workforce shrinking, and predictions circulating for as many as 900,000 jobs losses by 2025, the push for efficiency has come at both an abstract and literal price. Yet the result might not be outright displacement, but rather an improved experience in the real world. Alibaba has already stated that it plans to use the data amassed from their significant online presence to better improve the shopping experience in their stores. And one advantage brick and mortar shops always have? No pop-up ads.