Cpcmcredit Blog

The number of online-only retailers going bust has soared to a record high as the “pendulum swings back towards bricks-and-mortar retail”. A total of 615 businesses entered insolvency last year, an increase of 13 per cent compared with 2022, when 545 companies collapsed, according to Price Bailey.

It may come as a surprise to some but the High street is fighting back strongly against the online retailers. “Online retail” is now a pretty high risk sector and in my view there are a number of reasons why

Firstly, for many retailer, the numbers simply didn’t add up. Look at the case of Wiggle (which I have blogged about) that collapsed last year with a balance sheet that was pretty catastrophic. A great shame, because I used them frequently (they are still trading) but it was a classic case of inflated expectations

Secondly its the very nature of shopping. As with online food deliveries, it all sounds great in theory but the novelty has worn off. Buying yet another item that doesn’t match expectations or is the wrong specification (as I frequently do) means a trudge to the returning outlet where, in my experience, its service with a scowl. We are also social animals. Shopping and simply being out and about, is a leisure activity for many and whilst some may sneer, is it really any less intellectually rewarding than watching the match?

And then there is the old fashioned value of customer service. Im an avid reader and whilst I but many books online through Blackwells, I certainly relish the atmosphere of bookshops and the pleasure of browsing. Something that certainly isn’t replicated by a kindle download

Humans can be a little unpredictable and also many of those ingrained in technology perhaps do not have the people skills to understand what motivates much of the outside world (i’m putting this politely) whilst too many investors have been overly impressed by the latest 20 something with “an idea” which in reality is as appealing as his acne and dress sense.

Trends are very interesting and often counter intuitive. Maybe this was all signalled by the remarkable rise of Rough Trade and many other vinyl retailers. Who predicted that, but also the clues may have already been there