With the news this week that yet another terrestrial retailer, the Peats electronics chain, has shut up shop, is it time to accept that e-tail has beaten retail for good?
JUST OVER three years ago I went into a branch of Peats, the Dublin electronics chain, in search of a digital voice recorder to replace the Walkman that had started to amuse other journalists with its bricklike, nonbinary nature.
I found a supersleek high-end model with a price tag of €90. Staff talked me through its features and convinced me that it was what I needed, but before I handed over my credit card I decided to see how much the recorder would cost online. Back at my desk it took less than 90 seconds to track down the same make and model, on eBay, for less than €40. So I bought it there, obviously.
It is a very 21st-century way to buy. It is also one of the reasons Peats announced this week that it was shutting up shop after nearly a century in business.
Making the announcement, the company’s MD, Ben Peat, told the 75 staff gathered at its head office, on Parnell Street, that a combination of recession, unsustainably high rents across its 11 branches and “a changing marketplace in which online shopping was eating into high-street retailing” had left the family with no option but to close.
The news was greeted with sadness, not least because Peats was one of the good guys. The store was renowned for its customer service, its knowledgeable staff and its handy city-centre locations.
It is, however, not the only shop to fall victim to changed shopping habits recently; just last week 130 staff at the video-game chain Game lost their jobs after the stores went into administration.
These closures are likely to be followed in the months and years ahead by other well-known and long-established names, and the web is increasingly being blamed. While fewer shoppers are using bricks-and-mortar shops – electronics sales have slumped 40 per cent since the recession took hold – the online market is going in the opposite direction.
Pre-tax profits at the Irish division of the online retailer Amazon.comincreased by 300 per cent, to €3.8 million, last year, and revenue more than doubled, to €112.6 million. According to the Central Statistics Office, 43 per cent of Irish adults bought something online last year, up from 36 per cent in 2010. The Republic is now in line with the EU average but is still a long way behind the UK, where 71 per cent of adults shopped online last year, and even further behind the Nordic countries, where almost everyone shops virtually.
It is now common to try on clothes or get the look and feel of electronics in a shop, then buy online. It is likely to become more so with the evolution of the smartphone. Barcode scanners have made it easier than ever for consumers to read a product’s barcode, then look up where else the item is for sale and for how much.
But will advances mean the death of our high streets – and will people care? We carried out a straw poll on Twitter on Thursday, asking if people researched in store before buying online and whether they felt guilty for doing so. Among these Twitter users – who are more technologically aware than average – the answers were, almost universally, yes to the first question and no to the second.
“I do that all the time. No guilt. Shops have too high margin incorporated,” said Helen O’Keeffe.
“Did it with my wedding dress and saved about €1,200,” responded Lisa McInerney. “Guilty? Are you joking me?”
“Yes, usually anything requires trying out that isn’t clear online,” said Paul Madden. “No guilt, it’s the same as looking in another shop for better price.” He added that “sometimes it can work in shop’s favour – shipping time and cost might make savings not worth online purchase so buy in store”.
Aaron McKenna is the general manager of Komplett.ie, one of the larger online retailers in Ireland. He says much of the feedback he gets from customers suggests that researching offline and buying online is becoming increasingly common.
He says guilt is inevitable, but “customers will go where they can find the products they want for the best prices”. He says traditional retailers “need to develop unique selling points beyond price and the tactile nature of the in-store experience”.
Despite the shift in the retailing space, McKenna does not believe traditional retailers are doomed.
“People have been talking about the death of retailing since Amazon set up, more than 15 years ago, and it hasn’t happened. There will always be people who want to buy in store, people who want their hand held through a big purchase.”
He dismisses the notion that retailers can compete with etailers on the traditional battlegrounds. “I don’t think they can compete on price.”
Bob Conn, who set up Conn’s Cameras in Dublin 43 years ago, disagrees – and believes traditional retailers can and do compete on price with online sellers, particularly when delivery charges and taxes are factored in. Although he now has to contend with a lot of people using prices they have sourced online to haggle, he is surprisingly upbeat about the prospects for traditional retailing.
“Some retailers are very negative and are not embracing the changes, but the reality is that Pandora’s box has been opened and it is not going to close again. Online retailing is a reality, and we have to deal with it.”
And his business is dealing with it. He says that trade is “flying at the moment” and points to the advantages it has over online retailers. “We have a lot of staff on the shop floor, and we offer a very good sales service and a very strong back-up service.”
He accepts that some customers “don’t care about any of that – all they care about is the bottom line – but if you want a more rounded service then, generally speaking, you will do better in store”.
