This is Not Just Any Share Index Relegation…
Marks & Spencer (M&S) has been a fixture of British high streets for over a century. It is little surprise that it is ranked as the third most recognisable brand across all British industries, according to the BrandIndex.
However, brand recognition has not prevented ‘the quintessentially British’ retailer from falling out of the top 100 companies listed in the UK. What this shows is that even with a significant market share of an essential item, changing shopper habits must be catered for quickly.
The graph below is something we have shared before. Updated, it continues to tell a dismal story for physical high street retailing. Although online sales show a slight dip in the most recent quarter, around 20% of all retail purchases previously taking place in the high street are now being transacted via the internet.
Internet Retail Sales as a Proportion of Total Retail Sales, by Quarter
Source: Office for National Statistics, data as of June 2019
Percentages can be misleading out of context. But expressed in monetary values the change taking place seems more tangible. Between 2013 and 2018 online sales more than doubled, reaching a value of £15.75 billion.
Value of Online Retail Sales by Year (£bn)
Source: Office for National Statistics, data as of December 2018
What we are witnessing in retailing is a self-fulfilling cycle;
Interestingly, this circular effect is not equally distributed. Some retailers with a high street presence have grasped the opportunity, and thrived, by moving to an online offering quickly. But, for those slow to react it has been painful.
What we should not forget is that changes in the business world take place all the time. We mentioned M&S being relegated from the UK’s top 100 index. This is a poor outcome. After all, M&S is a business that has been around for 100 years and one of the few included in the index when it was first formed back in 1984. However, it is important to remember that business trends continuously shift, and this is not exclusively confined to retail. Of the 100 original constituents included on the leading shares index in 1984, only 25 of the original companies remain, showing markets change depending on prevailing conditions and businesses must continually update and reinvent themselves.
Yes, the reshaping of the high street is radical in its speed and breadth. But, the one thing in business we can rely on is change and in a world increasingly dominated by technology that will only increase.
The good news for us as consumers is, through technology, goods and services have never been so accessible; most products are now available at the tips of our fingers, and online retailers offer ever-greater choice, showing how the disruptive power of technology brings greater gains to consumers.
- Even the most well-established businesses are subject to disruption.
- Courtesy of the internet, goods and services have never been so accessible
- Technology is an enabler as well as a disrupter