The retail empires strike back: Can new technology lure us back to the high street?

The high street has been bruised and battered by online firms but in-store technology is helping to enliven the retail experience, as Rhodri Marsden discovers.

An interactive window in an Adidas shop

Technology has always had the power to disrupt the way we live and work. Businesses are forced to adapt to survive, and individuals find their careers radically reshaped. Industries such as travel, music and television have transformed so profoundly over the last 20 years that they've almost become unrecognisable, and the high street has shown itself to be far from immune.

While in-store technology such as automated checkouts has successfully streamlined the act of shopping, offline technology has arguably led to the closure of whole chains, such as Borders, or the 195 high-street stores recently earmarked for closure by Thomas Cook. This ongoing battle is defining the shape of retail, a struggle between the technological lures that draw us out of our homes and into shops, and the online innovations that allow us to make our purchases in a virtual world.

It's unfair to blame technology alone for what Mary Portas termed a "crisis" in retail – especially when we're still struggling to emerge from the global financial crisis of 2008. But that continuing need to economise tends to drive us online to track down bargains. According to a recent mobile research survey done by Google, eight out of 10 smartphone owners use their phones in-store to research products and prices before making a purchase – a phenomenon known as "showrooming".

High-street shops become little more than places where you can physically examine goods before trotting off and making a cheaper purchase from an online retailer who doesn't have the same overheads.

For canny retailers with money to throw at the problem, this represents an exciting challenge. "Businesses that fulfil the needs of shoppers, that provide services and experiences that match and exceed their expectations, are surviving and thriving," says Ian Foulds, insight and strategy director for marketing agency Integer. "But businesses that lose their relevance to modern shoppers will no longer have a business."

Many retailers have found themselves ill-equipped to deal with the assault on their profits by the likes of Amazon, whose tentacles now extend into way more sectors than just books and DVDs, racking up an annual turnover of $48bn. The one big advantage of high-street stores – knowing exactly when and where you'll have the goods in your hands – is also being assailed by online services, whether that's Amazon's move into same-day delivery, or the huge expansion of "click and collect" services that allow you to pay online and choose a local pick-up point.

Click and collect now accounts for 25 per cent of John Lewis's online sales. Collect+, a huge player in this field that has teamed up with a network of convenience stores and newsagents, doubled its sales over the year to the end of March. Amazon has established pick-up points ("lockers") in Co-operative supermarkets and elsewhere, while Royal Mail and the Post Office are rolling out their own scheme this year, unburdening the postman and substantially reducing the number of red cards left on doormats.

The theory behind click and collect is that when the collection happens, the shopper is likely to make additional purchases. Which is great for a retailer if that collection point is in-store, but if that pick-up point is in a Co-op or a Londis, the only businesses to benefit are the Co-op and the Londis.

This all paints a fairly bleak picture of the high street, but James Miller, retail and property consultant at Experian Marketing, doesn't believe that town centres will die at the hands of technology. "People are complex," he says. "They want to shop locally, they want to talk to their friends, meet people and so on. The high street as the centre of town still has a role as a community hub."

Lynne Davidson, managing director of digital agency TH_NK, agrees. "Go to any high street on a Saturday, you'll see cliques of mothers and daughters, boyfriends with their girlfriends trying to get brownie points – it's a classic social activity."

But while retailers can rely on these people to turn up week in, week out, Miller believes they should be looking to lure the people who don't enjoy shopping and now don't bother because they don't have to. "There are systemic things that need to happen," he says, "like making shopping areas more pleasant, making them multi-functional and not just retail deserts that close at 6pm. Encouraging proper mixed-use development in town centres and so on. But technology has an important role, too, to help enliven what's traditionally a rather staid retail experience."

Apple, according to Lynne Davidson, has redefined how a high-street store can work. "The Apple Store makes you feel part of a journey, to feel like it's about you," she says. "That environment it's set up [and trademarked] is designed to give you fulfilment, a sense of belonging, that you're part of the success of that brand, that you're allowed to be there. The best in-store technology almost feels like complimentary therapy – like those virtual mirrors, which avoid you having to try on 40 dresses while having a scarf wrapped around your face so you don't get make-up on them."

These "StyleMe" mirrors, developed by Cisco and tested recently by John Lewis, proved hugely popular, with Xbox-style functionality replacing the harrowing changing-room process. Ditto Integer's WI\Sh virtual windows, touch-screen shop windows successfully trialled by Adidas in Nuremburg last year which allow 24-hour high-street shopping. From the Me-Ality Size-Matching station (a 3D scanner which takes 200,000 measurements of your body to match you perfectly to the correct brand and size of jeans) to Sephora's Pantone IQ (which matches the shade of your skin to the perfect foundation and make-up), technology has the ability to introduce an element of theatre into high-street shops that could very easily pull in the punters. The difficulty, of course, is the expense.

Many high-street stores, when they first opened, never anticipated having to make such profound changes to the way they operate. "E-commerce is now ubiquitous," says Miller. "It cuts through all social groups, everyone is engaged with it to some degree. Retailers can't bury their heads in the sand on this issue any more. It's been around for a decade, it's here to stay and it's changing the face of the high street."

Retail has always been a cut-throat business, but it seems that technology is making the tussles even more ruthless, and the penalties for failure even more brutal.