In one of the biggest retail deals we have seen in recent times; Topshop has now officially been acquired by mammoth online retailer ASOS.
It was confirmed on Monday 1st February that ASOS had officially bought Arcadia brands Topshop, Topman, Miss Selfridge and HIIT, resulting in the closure of stores and potentially 2,500 employees sadly losing their jobs in retail overnight. This huge, almost £300million deal will no doubt mean tremendous success for ASOS, who have been quoted to say that “the acquisition of these iconic British brands is a hugely exciting moment for ASOS” and that the deal will “help accelerate our multi-brand platform strategy” (Sky News, 2021). But what will this move mean for the rest of the high street and retail in the future?
There could be a further emphasis on online retailing and marketplaces
We have all seen the news that ASOS are one of the few companies that have not only managed to stay afloat during the pandemic but massively exceeded expectations. With online sales up by 20% at the end of last year as well as huge profit margins and customer acquisition, it seems as though they’re living in a whole other world to what the high street has witnessed in the last 12 months (Retail Gazette, 2020).
This, along with the general customer behaviour of increased online activity, emphasises the fact that easy-to-use marketplaces with a wide offering are the places consumers want to go for their retail therapy. When people couldn’t go into stores anymore, they had to turn to online shopping – and what is easier than shopping on one website to get everything you need in one go? One postage fee, one account to log into, one package arriving at your door that could include multiple products, from multiple brands. You can’t get this speed and ease when shopping on separate brand websites.
Depending on your target audience, there could also be an internal push for brands to partner with marketplaces such as Amazon, selling certain items via their website to meet the need of consumers.
Whether you want to buy skincare products, in-the-now clothing items, make-up or gym wear, you can get it all at a marketplace like ASOS – so why go anywhere else?
Retailer websites will need to offer more for the customer
Online experiences need to be more personalised to the customer to keep them engaged online. When there are huge pure-play retailers like ASOS, now taking over brands like Topshop too, this means your website will need to stand out to customers to make them shop with you.
This could be done through digital personalisation; offer customers special discounts, exclusive offers, early access to sales or even a points system that can build up to be used to receive free gifts or money off. Retailers will need to provide their customers with the means to not want to go anywhere else.
This necessity for digital transformation has slowly been building for some time, but with the pandemic, retailers going into administration and pure-play brands taking over, it means that now is the time for brands to offer something special or unique online.
Iconic British retailers are no longer safe
It’s a bizarre notion thinking of one of the biggest stores on Oxford Street someday standing empty, when it has been renowned for so long as being one of the brightest, busiest and best shops on the high street.
While there are some discussions from ASOS to potentially make plans for the huge flagship store, it certainly is not a priority. And who can blame them?
Topshop was, and still is, an iconic British brand. From Kate Moss, Cara Delevingne and Karlie Kloss, these were the faces of Topshop during its height of fame and now it seems amiss that something once so quintessential to the high street and British street fashion, went into administration.
It goes to show, however, that if retailers do not adapt to the times, meet customer needs or invest in the right places, that even the most iconic brands will struggle to survive in a saturated online world.
The future of the high street
Of course, the ASOS acquisition isn’t the only deal we have seen recently that resulted in another high street loss. Boohoo bought Debenhams in a £51million deal, with no plans to save the department stores or the 10,000 jobs that go with them. While this and the closure of Topshop, Topman and Miss Selfridge stores is a huge blow to the high street, this does not necessarily mean that it is completely the end.
Once stores can open again properly and consistently without the interruption of lockdowns, it’s likely that the public will want to get out and shopping again in stores. After almost a year of being stuck inside, unable to travel or do anything, an all-day shopping spree in Westfields with friends sounds like an absolute treat.
So, that’s what the future of high street could look like: a treat. Shopping in-store will likely turn into an experience, meaning that retailers may need to investigate new ways to tempt their usual customers to shop in-store, rather than the speed and ease of shopping online.
The closure of Topshop stores hasn’t made this happen; the pandemic has. But the Arcadia group going into administration and being taken over by one of the biggest pure-play online retailers has certainly made a point of letting us know that digital transformation is the key to success.