Have mobile apps killed off the high street, or are they fighting to save it?
Mobile apps have been instrumental in the rise of online shopping, but are they a natural enemy of the high street, or can they support our bricks and mortar businesses?
Smartphones have moved from being useful to becoming essential. Many rely on the convenience of this technology to get through all aspects of their daily routine.
Businesses have noticed this trend and, in order to stay relevant, have developed apps to meet customers demands and match their fast-paced lifestyles. However, as a result, some physical businesses are suffering.
The Centre for Retail Research found that 61, 000 High Street stores have shut down since 2012, with 31, 000 stores predicted to close by the end of 2022. Online shopping is partially to blame for the death of the High Street, but have apps also played a part in its demise? Or, in fact, are apps fighting to save it? Let’s find out.
Banks are not the most glamourous of places. Waiting in line to shout your request to a teller through a pane of glass, while trying to remain discrete as you give them your financial details, hoping not to become a fraud statistic, hardly makes for an enjoyable experience.
It also doesnt help that they are only open when most people are at work, making visiting a branch a difficult task.
To combat this issue online banking was introduced. People were able to manage their savings and current accounts from the comfort of their home. But, with the rise of the smartphone, online banking has evolved even further into banking apps.
In 2017, according to industry analyst CACI, 22 million people used a mobile banking app to manage their current account and these people racked up 5.5 billion log-ins to banking apps, according to UK Finance.
Mobile banking apps are also proving popular amongst the younger generations. A Crealogix UK study revealed that 91% of millennials prefer banking apps and online banking to visiting branches; however they are not to blame for the decline of branches. In fact the growth of mobile banking is being driven by older consumers living in rural areas, who perhaps do not have a local branch and find it easier to bank digitally.
There is no denying that apps have revolutionised how consumers handle their finances, but what has this meant for the bricks and mortar branches? And, more importantly, those who work in them?
In 2017 The Times reported that 802 bank branches closed: The Royal Bank of Scotland (RBS) alone closed 259 branches last year, cutting 680 jobs in the process and the reason is purely down to the increased use of digital transactions. An RBS spokesman told the BBC: “Since 2014 the number of customers using our branches across the UK has fallen by 40% and mobile transactions have increased by 73% over the same period.
Conversely, not all is lost when it comes to bricks and mortar banks. Research by the Social Market Foundation found that when it comes to more significant and long-term financial decisions, such as ‘seeking financial advice (57%), or taking out a mortgage (50%), the majority of people still prefer to visit a branch. So bank branches may still have a place on the High Street for the time being.
Read more about the current state of UK high streets:
It has been nearly five years since we last saw the iconic yellow and blue Blockbuster sign lighting up UK high streets, since the last of its UK stores closed in December 2013, but are DVD rental stores missed on our streets?
Thanks to a range of film and TV streaming services such as Netflix and NowTV, the public now have access to hours of entertainment without needing to leave their sofas, they can even access these services on the go. The Office for National Statistics? annual Internet Access and Use report found that 46% of adults (over 25 years old) said they have watched paid services in the past three months – this number is up from 29% in 2016.
A more dramatic rise can be seen amongst the 16-24-year olds, with figures rising from 55% in 2016 to 81% in 2018.
According to UKOM-approved com Score data, roughly 17% of mobile internet users in the UK, some 5.8 million adults, accessed the Netflix app on either a smartphone or tablet in March (2018). Although there are means to watch DVDs on the move, these streaming services allow people to access thousands of films, documentaries and series through a device they can put in their pockets.
Some will argue that they miss the sociability that Blockbuster provided, the family routine of a Friday night movie and an overall sense of nostalgia. But, based on streaming service figures, these rental closures certainly havent affected our entertainment consumption. However, there is another victim of these streaming apps aside from the DVD rental market – DVD retailers.
“Mobile apps have revolutionised the high street by packing it into your phone.”
As the total revenues from digital video which includes services such as Apple’s iTunes, Sky’s store and Now TV surged almost 23% to 1.3bn last year, whilst High Street sales of DVDs and Blu-ray discs fell 17% to 894m.
People are swapping physical copies of films for the opportunity to watch a wider selection. A typical new release DVD retails at 10 in most stores, this offers one film. A Netflix subscription is 9.99 for a premium account per month, which includes unlimited watches of their entire library of films and TV shows, including exclusive Netflix-made content.
Although it seems as though the DVD is on a downwards spiral, experts are predicting the decline will slow by 2022 as streaming services struggle to convert diehard movie buffs and collectors from physical to digital.
This, along with the fact that Christmas is a peak time for physical sales, Kim Bayley, chief executive of the Entertainment Retailers Association told The Guardian: A multichannel economy is going to exist for some years to come. The strength of the DVD and CD formats over the Christmas period shows that physical still dominates when it comes to gifting, for instance. Implying that retailers may survive on the High Street in the coming years.
Apps are there to make consumers? lives easier, from checking the trains are running before turning up at the station, to paying for your lunch using your phone when you have left your wallet at home. Phones are the Swiss army knives of the modern world, but what is convenient for a consumer may not be so convenient for business owners in the restaurant industry.
Food/drink ordering apps seem to be the perfect solution for tackling long lines in a fast-paced society. If you want a coffee, you can order it en route, and ensure it is ready for pick up by the time you get there. It all sounds perfect, however, the issue with introducing these apps is that the staff have to get used to the new system as well as continuing traditional sales.
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.
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