Margareta Pagano: Death of the high street? No, it's the birth of the i-street
Margareta Pagano is a former business editor of the Independent on Sunday who now writes columns and business interviews for a range of publications, including the Independent, Independent on Sunday and London Evening Standard.
Sunday 11 December 2011
In the US, Amazon has provoked uproar with a new mobile price comparison app, Price Check, allowing customers to scan products in stores but then buy them online with the bookseller instead.
As a reward, the giant online retailer is giving customers a $5 payment on each product they buy – up to $15. Amazon only launched the app yesterday so it'll be a while before we see how successful it is. The move is designed not just to boost sales, but to help it gather pricing information from its rivals. As you might expect, Amazon's move has outraged "traditional" retailers, who are spitting blood that it's turning them into showrooms for its business.
But there's nothing new in Amazon's attempt at price comparison; retailers have been "spying" on each other for decades. It's as much a part of the game as discounting. As Andy Street, boss of John Lewis, says in his interview with us on page 86, the group's partners and staff have been out and about on the high street checking out rivals' prices since the 1920s. Indeed, price matching and quality go to the heart of the brand.
What is new today is the way technology is transforming how we shop. Online shopping has soared – latest figures show 80 million visits to online sites daily, about 1,000 purchases being made every second, and a whopping £7.8bn will be spent online this Christmas alone. Next to come will be shopping by phone – PayPal reckons that by 2016 our phones will be our wallets.
Most shops are already adapting – Topshop is about to launch a mobile-optimised website and an iPad app from which to shop, New Look has a new app to scan barcodes in the store, buy online and then share what you have bought on Facebook, while at Oasis and Karen Millen, among others, iPads replace tills. House of Fraser has opened a second shop without anything in it – you look instead at goods on computers. Then, there's the reverse – virtual shops going to real bricks and mortar – like eBay's new outlet in Soho.
What's more, the UK is actually one of the most sophisticated markets in the world for online retailing, leading the way with the technology as well as the software design and distribution; so we shouldn't be too worried by the switch from bricks and mortar to online as it's also creating new jobs.
To my mind, the great debate over the supposed death of the high street – which the Queen of Shops, Mary Portas, is due to address this week – should be about the greed of landlords and local councils rather than the changing face of shopping. Only 100 or so years ago, most household goods were either bought in markets or from travelling salesmen, tinkers and Gypsies; no one harks back to that era.
If Portas has done her job, then she'll recommend to government that local councils should be forced to hold down their outrageous business rates, that the rents charged by landlords should either be controlled or held in line with inflation, and they should reduce the number of charity shops or at least take away their rates relief. Councils should also be made to allow more housing and offices into high streets to let them breathe again. All the clone-chains will soon disappear anyway, market forces will see to that, and if my local market town, Saffron Walden, is any guide, they'll be replaced by jazzy new independent shops that combine old charm with online nous – the high street may be dead, but long live the i-street.
Bags of style: Mulberry carries off £15.6m in profits
What is it about we Brits and our handbags? Even when it comes to the big battles on Europe, all our Tory back-benchers could come up with is to urge David Cameron to "handbag" his enemies. Then there's our Queen, Mrs T ... and what is fast becoming a national institution, Mulberry, maker of the most outrageously expensive but beautiful bags, which has been quietly handbagging the rest of the world to devastating effect. For the six months to September Mulberry defied gravity – sales were up 62 per cent, pre-tax profit up 231 per cent to £15.6m, and orders for next spring up nearly a third. Chairman Godfrey Davis has hired another 60 people at his Somerset factory to cope with new orders, and plans five more shops in Asia, and nine in Germany and on the US West Coast. Shares have shot up, but there aren't enough on the market. It's time Mulberry let more of us in as our handbag mania goes global.
Something doesn't stack up about Merkozy's drive for a transaction tax
There's something about the latest skirmish over the French-German drive to introduce a new Financial Transaction Tax on trading across the EU countries which doesn't stack up.
David Cameron claims he won't vote for the proposed new treaty unless Angela Merkel and Nicolas Sarkozy give him certain concessions – like giving up their plans to press ahead with the tax, which hurts the City of London. From their side, Merkozy are insisting on the tax because it is integral to the eurozone deal. In the City, the commonly held view is that this new FT tax is being driven by team Merkozy because they want – once again – to damage the City's huge competitive advantage in financial services.
But it's not a commonly held view among either the business leaders or the officials in either of their countries. From what I can gather, from talking to senior City and business figures in London, Paris and Frankfurt, everyone agrees that introducing this tax will be harmful to the entire European financial-services sector.
It's just as easy for a firm such as Icap to operate from Bermuda as from Broadgate. And it's not just the Brits who are against this tax. I hear Germany's Chamber of Commerce is also against such a tax as they know it will damage their financial community, including Deutsche Börse, Germany's main exchange and one of the world's biggest, which will be hammered if this tax were introduced – DB is merging with NYSE Euronext, which owns the Paris, Lisbon and Amsterdam exchanges, as well as the Frankfurt.
So what's going on? Are the French and German politicians really so dense that they don't realise the damage they are doing to their own industry? They must know that if the FTT goes ahead, most financial businesses will simply move offshore; can you imagine Singapore or Hong Kong introducing such a tax?
No, of course not. Unless Merkozy really are on another planet, there is only one interpretation – the FTT war is just another bit of horse-trading.
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