Technology and the Future of the UK High Street

A discussion paper by techUK explores the challenges facing UK high streets and the ways in which technology and digitisation can help. The paper makes a number of policy recommendations to support high streets and high streets businesses including an expansion of the Help to Grow Digital scheme, support from central government funds for high streets to digitise, and a Future of Work Council to enable cross-Government thinking on local economies, high streets and the future of work in the context of post-COVID recovery.

It has been ten years since the Portas Review identified a range of challenges faced by UK high streets. Many of those challenges remain in 2021- rising business rates, a decline in real wages particularly outside of London, stagnant economic growth, parking and infrastructure problems, the continued rise in large shopping centres outside of towns, and the rise of online commerce. Most recently, high street businesses have been hit by the constraints on footfall during the COVID-19 pandemic.

Many high street businesses and small businesses across the UK have adopted digital technologies in their response to these challenges. In many cases, during the pandemic, an expansion into online business has helped keep businesses open. Over time, digital adoption has opened up new products and services.

But the adoption of technology by businesses alone is not enough. In addition to changes to the business environment more generally, there is significant space for local government and organisations that manage high streets to employ technology to improve the high street experience in a way that responds to the needs of their local communities and economies.

techUK has developed a discussion paper Technology and the Future of the UK High Street aimed at exploring the challenges being faced by high streets and high street businesses and the way in which technology is being used by retailers, small business and local authorities to meet these challenges. The paper also makes recommendations for policies and support measures that can be given by central and local government to help digital adoption and the use technology and digital solutions to ensure a healthy future for UK high streets.

How is technology being used in response to these challenges?

The discussion paper outlines three areas where digital technology and investment in the digital economy can be leveraged by high street businesses and local authorities to help increase footfall, attract customers, and improve business prospects in the long term. These include:

• Building an omnichannel high street enhanced by digital technology

Omnichannel retail can both revitalise the high street as well as open new business opportunities for businesses with bricks and mortar assets. Other technologies such as augmented reality, virtual reality, QR codes, blockchain, personalisation, contactless payments and supply chain management software can all contribute to improving customer experience in-store and operational efficiency

• Putting the high street at the centre of the local economy and community

Changes in the way that people live and work over the last 18 months seem set to prevail, to some extent. This creates new opportunities for local communities opened up by increased numbers of remote workers who are no longer commuting regularly, all enabled by technology. High streets can respond to these changes not only by catering for remote workers, but also by making local high streets a place to work, through better connectivity and dedicated workspaces and tech hubs. There is also an opportunity for high streets to be used as centres of the community, for arts, culture and entertainment purposes, some of which can be supported by technology.

• Addressing infrastructure: accessibility, mobility and sustainability

Technology can support improved access to the high street whether it is information on public transport, managing parking spaces, or last-mile micromobility solutions. It is also important to get high streets online - improving connectivity for the businesses themselves, but also to attract footfall including remote workers, and enable people to find what they need on the high street.

What is the role of government and policy solutions?

Our discussion paper advocates for a collaborative effort to address the challenges being faced by UK high streets. Some of this collaboration will be between retailers, small businesses, and tech providers in terms of adopting and implementing innovative solutions within their businesses and supply chains. But there is also a role for government - both local and central - to support the reinvention of the high street with support and joined-up thinking that also leaves room for responding to local needs.

Solutions to the decline of the high street must also take account of some of the structural changes that have taken place over the past several years, accelerated by the pandemic. For example, changes in consumer behaviour around online shopping are regarded to be a structural rather than a transitory change.

To make this work we will need partnerships between Central Government, Local Government and the private sector. Solutions will require investment and financial support for businesses and local government, but also more joined-up thinking across government about the future of the high street, and the role that technology will play in that future.

Our recommendations include:

1. Support high street businesses to digitise, by expanding the remit of the Help to Grow Digital Scheme
2. Digitise the high street to improve access and social capital, using the Towns Fund and National Infrastructure Bank as to support investment
3. Join the dots between conversations about the future of work, supporting local economies, and the future of the high street, by convening a Future of Work Council to understand the changing work and investment dynamics after the impact of the pandemic.
4. The Government should not introduce an Online Sales Tax. Such a tax would be regressive and would increase costs for businesses that are least able to bear them at a time when the Government should be supporting the digitisation of the economy, especially for SMEs.

The discussion paper will be launched at an event in the new year with a panel including representatives from eBay, the British Retail Consortium, the Federation of Small Businesses and techUK.

You can download techUK's discussion paper here: Technology and the future of the UK high street - report

Commenting on the paper, Antony Walker, Dep. CEO techUK said:

Digital adoption has played a really important role for businesses in the response to the challenges facing the UK high street, even more so in past 21 months with the restrictions and social distancing measures that have impacted footfall on high streets across the UK.

Digitisation opens up huge opportunities for businesses and high streets themselves, and technology can play a major role in putting high streets at the centre of local economies and communities.

A joined-up approach by Government towards supporting digital adoption and rethinking the role of the high street following the changes to the way in which we work, live and travel will be essential for ensuring UK high streets bounce back after the pandemic.

Helen Dickinson, CEO of the British Retail Consortium said:

"New technologies and changing consumer behaviours are re-writing the rules of retail. There are lots of things that make a brand successful, but effective use of the power of technology can really help retailers reach new audiences, improve efficiency and better predict future trends.

In our local communities, people are increasingly looking for new experiences on the high street, including leisure and services as well as retail, requiring local leaders, property developers and local government to work together in developing places that cater to these demands.

To successfully navigate high street transformation, businesses must invest in the connectivity across their physical and digital offerings, but this is only possible if they have the resources to do so. If the Government stood by its commitment to cut the business rates burden, it would unleash the wave the investment needed to give us the local communities we all want and deserve.