High street retailers are losing ground to online sales, and this is clear now.  It doesn’t matter whether you are looking at clothes or entertainment (movies and music), the picture is the same.

But the key question is whether these initiatives will be enough to stem the decline in their traditional businesses. It will clearly be a struggle. Last week’s trading statement from HMV, which also owns Waterstone’s, showed that sales were down 3.7 per cent over the last 12 months. Others are suffering too: while Next could boast a 15.3 per cent rise in sales of its Directory mail order business – almost half of which now come via the Internet – that was not enough to compensate for the 7.5 per cent decline in sales at its high street stores, some of which were doubtless disappearing online.

Source: The Observer | Business | Internet’s new wave threatens to wash the high street away

However, I think the headline is misrepresentative of both the problem, and the solution.  This is not one of those straight line trends that ends in zero high street shops, and 100% online sales.  No-one in their right mind would suggest that.  Cool people just have too much enjoyment looking cool while shopping and trying things on (music or clothes).

The key is balance. What is the right balance between high street and online.  Now this is the problem that retailers and banks share.  Its not a situation that has an endgame either.  It will be iterative and hard to get right.  Welcome to the new world of shopping!

Relevance to Banking:

The conundrum that faces us in finding the right balance of bank branches alongside our online and call centre offerings, is a problem shared by all retailers.