Government Urged To Wake Up to the Plight of the High Street
A new report (published 21st February 2019) by the Housing, Communities and Local Government Committee (HCLG) has suggested that the government should ‘wake up’ and consider implementing an online sales tax to ‘level the playing field’ between online and high street retailers.
Commenting on the report Drapers Record asked FashionCapital & Fashion Enter Ltd CEO Jenny Holloway for her response, she said: “No one can stop the digital age and industry progression, so while it’s encouraging to read that the rents for retail are to be reviewed, proposed additional taxing because a business model doesn’t have retail outlets is quite frankly ridiculous. E-tailers may not have bricks and mortar in the form of shops, but they have huge fulfilment centres and transportation costs.”
Her comment has been published in the Drapers article: ‘Industry urges government to ‘wake up’ to save high street,’ written by Isabella Fish on the 21st February.
Simon Wharton, business strategy director at full service eCommerce agency Pushon, meanwhile added his concerns:
“The report from the HCLG echoes Mike Ashley’s call at the end of 2018 to place a heavy tax on eCommerce sales as a potential solution to the high street’s woes. However, as Newcastle United fans already know, Mike Ashley is less interested in benefits for the common good and more interested in benefits for Mike Ashley.
“The UK is a global leader in eCommerce, so an online sales tax would be a retrograde step that would undoubtedly have a damaging effect on our economy. We should be supporting the high street by encouraging innovation, rather than damaging future prospects for all.
“Crucially, taxing online retailers would fail to solve the fundamental issue, which is that consumer habits and expectations have evolved and the high street is currently struggling to offer the same level convenience and choice provided by eCommerce.
“Interestingly, our own research earlier this year revealed that a massive 81% of UK consumers believe brick and mortar shops are vital to the shopping experience, and 70% enjoy the full experience of going in-store to browse
“It also showed that 52% of shoppers in the UK believe that retailers need to offer a more seamless experience between online and offline commerce to retain their custom.
“This would suggest that there is actually still a place for bricks and mortar stores in the UK retail landscape.
“Instead of relying on quick fixes like an online sales tax, retailers should be looking to secure their future by investing in technology that enables a better omnichannel experience, bridging the gap between in-store and online.
“To compete in this new era of one-click ordering and next day deliveries, technologies such as augmented and virtual reality can help retailers transition from a purely transactional in-store offering to one that is more experiential and personal.
“By building this type of interaction into their offering, brands can remain relevant, expect increased customer loyalty, and in turn, increased sales.”
There is no doubt that the UK high street is in dire need of government intervention however, in what shape or form remains up for debate.