History has taught us something about empires, they will inevitably fall. Why is it inevitable? Because the bigger an empire gets the harder it is to maintain and eventually it’s own success will be the reason it crumbles. This isn’t something which is unique to physical empires like the Romans either, the dot com bubble is a digital example of an empire that fell in on itself. Countless companies popped up practically overnight, providing specific web services and because there was a huge amount of money available they all thrived. But the money was the result of a buoyant market that couldn’t sustain itself and when the market dropped so too did the investment and most of the companies folded. The lesson is the same as the Roman empire, in that it became too large to sustain itself and as soon as the environment shifted against the empire then the empire fell, unable to protect itself.
So why am I talking about this now? Mainly because I see a lot of similarities with the rapid decline of the high-street. In recent months major household retail brands have gone into administration. Jessops, Blockbuster, HMV and most recently the fashion chain Republic have all suffered and this is systematic of a bigger problem. The onslaught of online shopping, mixed with the lingering and deep-seated effects of a double dip recession have changed the way we shop. Not only are we more frugal but we are more likely to shop around to find the cheapest suppliers. We are more likely to buy online than in the store, even for clothing, and we don’t buy as much as we used to either. For many shopping is becoming a treat again, rather than a pastime. The problem is that this change in shopping habits has coincided with the height of a high-street brand boom, with lots of similar chain shops springing up all over the country. It also bears a striking resemblance to the way the dot com boom came about, with lots of suppliers popping up providing the same sorts of products, but with a limited audience to purchase them. Now that the audience is reducing its spending the suppliers are suffering and starting to fall. They are spread too thinly.
So what is going to happen? Well, like all empires, the high street brands are going to fall from grace. I think the distinguishing factors for who will survive and who won’t will be around who makes their own products and who relies on selling the products of others. If a brand has its own products then people are unlikely to be able to shop around and get them elsewhere cheaper. If those brands also provide the online shopping experiences people want then they will survive. But what of the others? Well unfortunately they are likely to start disappearing if they can’t compete and those brands who have already gone are just the start. It is likely that a core of brands will be left, those who are strong enough to weather the storm, but with spending habits changing there won’t be enough money to support the non-specialists who sell lots of other peoples products. In there place, however, we are likely to see a resurgence in local suppliers. As rents fall the availability of high street slots to smaller businesses that are specialist to local areas will rise. It is possible that the high street will start to look like it did decades ago, with local shops rather than national brands and this may further promote community.
What is certain is that currently our economy cannot support the variety of stores on the high street. The growth of the high street big brands is exactly the same as the growth of an empire. It grew fat on high spending habits but was also reliant on those habits. Rents rose with the competition for high street slots and with that the small local businesses were forced out. But when the bottom fell out of the economy this all changed and continues to change. Now the money they relied on has dried up and very few of them have a contingency plan. The empire is falling, what will rise in its place? We will have to wait and see.