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The Impact Of Technology On Business

Posted on: 11/06/2018

This week Dorset Chamber Chief Executive Ian Girling reflects on the changing face of the high street and the wider impact of technology across all sectors

Last week we heard the worrying and sad news that the House of Fraser is to close just over 50% of its high street stores, with 31 of 59 shops closing and a loss of around 2,000 jobs. Of course this is bad news for high streets across the UK and quickly follows Marks and Spencer who are also closing many stores across the country. In a digital world, it calls in to question the future of retail stores in a changing environment, disrupted by the development of technology.

Many will argue these stores have become dated, perhaps failed to keep up to speed with the expectations of customers in the 21st century in the digital world. I think it’s a bigger picture; our shopping patterns have changed beyond recognition and the new generation have very different ideas and businesses need to adapt if they are to survive.

So many now use a high street store to purely look and feel products – without any intention of buying that product there. I remember a well-known hi-fi store in Poole complaining to me that people only went in to the store to listen to the amps and speakers – and this then informed their on-line purchase. That business didn’t survive, they saw the problem coming but didn’t change their business model. Of course this is hugely challenging for any retailer – but is proof that businesses models need to adapt if retailers are to survive.

The House of Fraser follows a very long line of high street stores that are either closing or facing very challenging times. We have all seen the future model of the high street, a mixture of residential, food and retail – however we seem to be in no-man’s land at the moment as we go through a painful transition and the high street goes through this change. It’s certainly not the same in all towns, many still offer a thriving retail experience, closely linked to tourism with independent traders offering unique products. There are also some examples of retailers who seem to have really got it right. However there is no room for complacency.

At the moment we see retail stores as the main casualties of the digital world. We need to look further than this. The internet, whilst bringing incredible opportunities and advantages to both consumers and businesses, is hugely disrupting existing business models – and businesses in all sectors will need to adapt. We can already see technology impacting on long-proven business models with goods and services for both domestic consumers and business being delivered remotely through digital platforms. In many cases you no longer necessarily need offices to trade. We are also seeing huge changes in industries such as travel, publishing, estate agency, recruitment and it follows that businesses in all sectors will need to adapt as our millennials look at the world in a completely different way to let’s say older consumers and users of services. We have only just started to see the impact of technology on long-established business models.

Many will argue the differentiator will be customer service, often missing in the cold on-line purchasing environment. It’s true, we like that personal touch, attention to detail, that one to one service. However this in itself will not be enough and we need to look to the future and get ahead of the game. We all need to be looking to the future and innovating in a rapidly changing world.

 




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