Revolution Robert Peston Goes Shopping

For the last 60 years, British retailers have led the world

and changed the way we live.

From family-run empires to supermarket giants

and from fashion boutiques to fashion moguls,

retailing is something we've been good at.

In this episode, we tell the story of the most tumultuous change

in the history of the British high street.

Triggered by the financial crash...

It was very dramatic. The average size of a weekly shopping basket

shrunk by about 5%.

..and the rise of online shopping.

You have to understand what e-commerce means,

you have to understand what m-commerce means,

you have to understand what s-commerce means

and you put all those things into place

and you can make money.

These earthquakes are remaking the landscape of the high street.

You just couldn't believe that actually was going to be

the last day you were going to open your store.

And changing the way we shop.

That is an absolute revolution and we have to rethink

so much of how we do.

This is the story of a revolution that is changing retailing

in ways that were unimaginable only ten years ago.

But how will it all end?

Is it farewell to our love affair with shopping,

or is it the start of something new and huge?

1984. Gateshead.

RINGING

A 72-year-old grandmother sat in her armchair,

picked up her remote control and started a retail revolution.

Mrs Jane Snowball was part of a local council initiative

to help the elderly and infirm.

She had been given a ground-breaking bit of computer technology

to order groceries from her local Tesco.

It was called Videotex.

Mrs Snowball never saw a computer.

Never.

Mrs Snowball saw a television.

Her connection to the television

was a TV remote with an additional button which said "phone".

What effectively we did was to take a domestic television,

in a home

and turn it into a computer terminal

It took just 15 minutes to teach this trailblazing silver surfer

how to order online.

You know, 1984 and you're doing online shopping.

It was amazing and she loved it, absolutely loved it.

-INTERVIEWER:

-What do you think of it?

-I think it's wonderful.

Mrs Snowball ordered eggs, margarine and cornflakes.

Reassuringly British.

Five years before the world wide web was invented,

her order was sent down the phone line

to her local branch of Tesco who picked the items off the shelf

ready for delivery.

It changed the world of shopping.

What I'd done was to make shopping functional.

You know, I'd stripped out all the theatre.

Made it functional, any time, any place, anywhere.

Virtual merchandise.

Few predicted all those years ago that this quaint experiment

would anticipate a complete transformation of shopping

which would change the face of our high streets.

From a transaction of just a few quid

to a global trillion-dollar industry, this was history.

But back then, when the future founders of Google

and Facebook were just kids or newborn babies,

how could any retailer know that the internet would change everything?

It would be another ten years before retailers began to see

the potential of online shopping.

In the mid to late '90s I'd been to

an exhibition about the future of the store.

And they had a little display of a, you know, a kitchen

in an ordinary home

and there was a computer in the kitchen.

Let's see what ideas I could have tonight.

Well, it's not a romantic dinner with my fiancee.

Neither is it a cool party with my friends.

I just want something quick and easy.

And the curator of the exhibition said,

"Well, one day people will be able to order their groceries

"from home in the kitchen."

The lasagne looks particularly appetising.

So we can see the ingredients.

I'll add that to my shopping list.

All the retailers there thought that was hilarious

and proceeded to list all the reasons why that could never happen.

You know the retailers weren't really sure what to do.

It was the spirit of the age. "You want to buy things digitally,

"when there's a perfectly good supermarket down the road?

"You must be crazy."

It struck me that they'd made a very good point.

If it were possible, customers would love it.

So what the industry had to do was to work out

how you could possibly deliver groceries,

fresh foods to an individual household

at a price that anyone could afford.

And so within six months Tesco had set up that service.

Welcome to Tesco Direct, Lorraine speaking. Can I take your order?

Tesco was among the very first to go online in 1997.

Sainsbury's followed soon after with Orderline in '98,

an extension of its Wine Direct service.

Lovely, very nice.

A year later, in 1999, Next introduced its internet service.

It had grown out of its Next Directory mail order catalogue,

a big hit in the late '80s.

But it was an American retailer which more than any other

changed the way we spend our money

and revolutionised our shopping habits.

It arrived in Great Britain in 1998

and its name was Amazon.

This is one of Amazon's eight vast fulfilment centres across Britain.

Up to 2 million items are sent out every day from centres like this.

It's the size of seven football pitches.

There are 89 centres like it around the world.

All so different from the early days in the creator's garage in Seattle,

the very first fulfilment centre.

Amazon was invention of Jeff Preston Bezos.

In 1994, he was working as a computer programmer on Wall Street,

when his boss asked him to look into

this new-fangled thing called the "internet",

which was causing a bit of a buzz.

This would be a life-changing moment for Bezos and for many of us.

The wake-up call that led to starting amazon.com was finding

that web usage in the spring of 1994

was growing at 2,300% a year.

And things just do not grow that fast.

Outside of, I guess, usually Petri dishes or something.

It's a very, very unusual growth rate and so the question was,

"What kind of business plan would make sense

"in the context of that growth?"

Bezos recognised that the internet would become a giant place

where people would gather,

which meant there was an opportunity to sell them stuff.

His challenge was to work out what things to flog them.

Bezos started with a list of 20 products,

which he whittled down to five.

Computers, software, videos, CDs and books.

Ultimately he opted for books,

largely because, there were millions of different titles

many more than any traditional shop could stock, but an online retailer,

well, it could offer pretty much every title under the sun.

You just type www.amazon.com.

That takes you to our website.

Bezos named the company Amazon because it began with an A

and would be high in any alphabetical listings.

He also chose the name because, as it is the world's largest river,

it reflected his ambitions for the company.

Launched in 1995, the early days were a bit Heath Robinson.

They rigged up a bell to the computer that would ring

every time that someone placed an order and, of course,

in those first few days and weeks,

all of the orders were from friends and family.

Of course, every time the bell rang,

people would run over to the monitor and say,

"OK, what did they buy?

"Who bought it? "Oh, it was just your mom. OK."

Then one day the bell rang and they went to the computer

and said "Wait, that's not my mom. Is that someone's sister?

"Is that your aunt?

"No, we actually have our first real customer."

The first book bought by that first real customer was called

Fluid Concepts and Creative Analogies: Computer Models

of the Fundamental Mechanisms of Thought.

Bezos himself packed up the first orders,

helped by a small team, all kneeling on the ground.

And I had this brainstorm and as I said to the person next to me,

"This packing is killing me!

"My back hurts, this is killing my knees on this hard cement floor"

and this person said, "Yeah, I know what you mean."

And I said, "You know what we need?"

This is my brilliant insight, "We need knee pads!"

LAUGHTER

I was very serious,

and this person looked at me

like I was the stupidest person they'd ever seen, like,

"I'm working for this person? This is great."

And said, "What we need is packing tables."

LAUGHTER

After Amazon was launched in Britain in 1998

it soon became Britain's most popular retail website.

The first time I ordered something from Amazon,

I knew that this was a game changer.

You can press click on a mouse and I was amazed

when it arrived in the post two days later,

for free delivery at half the price I'd seen on the high street.

Amazon advertised that they could deliver almost anywhere fast.

Over a million customers, a warehouse the size of Edinburgh,

delivering almost every CD, video and book in the country like that

is no easy task.

In this room, it's full of my stuff

that I order from Amazon.

Um, there's a Kindle down there, there's a phone there,

there's a laptop there, um, pretty much all the books,

a couple of the picture frames...

..the CDs over here. Yeah, pretty much...

Pretty much everything in here

originated in an Amazon distribution centre.

Amazon soon expanded from selling books and music

to pretty much everything.

One of the things I've learned in Amazon is to never say never.

I've heard Jeff tell the story of how in the early days he was asked,

"Is there anything you won't sell?"

He said, "We will never sell brooms."

The problem with a broom is it's really long.

They are pretty inexpensive, very expensive to ship.

Well, I was in one of our warehouses just a few weeks ago

and, sure enough, we're selling a lot of brooms.

Jeff Bezos may have been a new virtual kind of shopkeeper

but he had one big thing in common with all the retailing greats,

which is that he obsessed about what his customers wanted.

An elderly lady e-mailed him

and said she loved the service but she couldn't get into the packaging.

It was too hard, so her nephew had to come round

and open it up for her.

Bezos took this very much to heart and had all the packages

redesigned so that anyone could simply tear them open.

Great packaging.

And there is my Searching for Sugar Man

motion picture soundtrack.

And that is my Afterlife DVD.

This is the embarrassing one.

And it is the Garbage Pail Kids movie and an '80s retro revival,

The Goonies, Police Academy and Gremlins.

And it isn't for me. Danielle!

But probably the biggest reason for Amazon's huge popularity

has been down to its cheap prices.

It can discount heavily, because its costs

are so much lower than traditional retailers with their shops,

vast numbers of employees, high rents and business rates.

Amazon has also saved a huge amount of money

due to its controversial tax arrangements.

Like many multinationals,

Amazon exploits international rules to slash its tax bill.

Amazon generated well over £4 billion pounds of sales

in Britain last year, but it paid

only a tiny amount of corporation tax.

Just over £2 million.

Now, that's because as a multinational it can use

clever devices to reduce the profit it declares in Britain.

It's all perfectly legal, but some would say it gives Amazon

an unfair cost advantage over bookshops like this one

and other high street retailers

which don't have the ability to shift their profits

to places like Luxemburg overseas where tax rates are much lower.

Your cooperation tax payments have been small.

What do you say to that criticism?

Well, I think what we say to that is that in the UK, as everywhere

in the world, we pay all of the taxes that we're required to by law.

I think we're making a really significant contribution

to the British economy.

We've invested over £1 billion in the UK to date.

We obviously collect an enormous amount of VAT

on behalf of the government, as would any retailer.

That's the system we operate within

and we follow the rules of that system.

If the government decides that there is a different system

to be put in place, we'll follow those rules.

High street retailers complain that when it comes to tax and rates,

the playing field isn't level.

That the online giants have an unfair advantage.

It's not about internet versus bricks and mortar,

it's about international versus domestic.

It's about where you choose to pay corporation tax quite legally.

Our corporation tax in the UK is on a journey to 20%.

That is an internationally competitive rate

and I don't believe that any corporation can argue

that it's not appropriate that they pay that tax.

And our view is that that is a consumer issue.

Consumers should stand up and say,

"I won't do business with businesses who don't contribute to my society."

DIAL-UP TONE

In Britain, we stampeded into digital shopping

faster than pretty much any nation.

We now make up nearly 10% of the world's online spending,

splurging more than £2,000 per person every year.

That's the highest in the world.

Inevitably, this has had a dramatic effect on our high street.

First hit was music and film sales,

so much so, that over 70% of all music and films

are now bought online.

Everyone remembers buying entertainment,

especially in Woolworths and as soon as Amazon started to pick up

and became very big,

the department of entertainment started

to drop off straight away.

The high street has just fallen behind

in terms of convenience and pricing

and service and all the other things that consumers today demand.

If someone can buy something one place for £10

and somewhere else for £20,

most people are not going to pay £20 for it.

I like the fact that you can sit with a glass of wine

in front of your computer.

It's just a pleasant way of shopping, isn't it?

You can sit on your sofa, in front of the television,

just browsing, really.

Around 10% of all retail sales in Britain are done over the internet.

That's expected to rise to more than 25% over the next decade.

Rarely in its long history has the high street

faced such a grave threat.

The challenges are more serious even than the arrival of supermarkets

and out-of-town shopping centres.

And five years ago, the high street

along with the rest of the economy

was shaken by the mother of all earthquakes.

The collapse of our banks in 2007 and 2008

and the savage recession that followed

was devastating for retailers.

Many of them were reliant on bank finance for survival.

The credit crunch also hurt consumers,

who had taken on huge debts to finance their long shopping spree.

NEWS: One of Britain's most famous retail names

has gone into administration tonight.

It was the end for 200 Woolworths stores.

'100 years of pick and mix ends as Woolies goes bust.'

The first big casualty was a store that epitomised

the British high street.

Woolworths had gone through two world wars,

gone through a depression.

You just thought it wasn't going to happen.

It would be saved in some shape or form,

because it was such a big name.

It was known as the favourite on the high street.

Woolworths first opened in Britain in 1909.

It arrived from America

and made its impact selling most things under the sun,

from stationery to dish cloths,

all for a threepenny or sixpenny bit.

This pioneering incarnation of today's pound shop fast became

oh so very British, with a presence on every high street.

And it won a special place in our hearts.

I just remember Woolworths being the one shop everybody knew.

Your grandparents went there, your parents went there,

there was something for everyone.

# Everybody needs Woolworths

# This super switch-off kettle is what switches on Samantha

# Brian's Binatone is great for his cassettes... #

Buying records is what I really remember.

Going and buying a seven inch record.

I think I got my first record from Woolworths, actually, so it's...

Yeah, it's happy memories, really, cos you always went to Woolworths

on a Saturday with your pocket money.

# Everybody needs a Woolworths store... #

Something for everyone, as their ads were keen to point out.

But there was one aisle in particular towards which

everyone was lured, whatever your age.

Pick 'n' mix - the excitement in kids' faces

when they were going round choosing what they wanted.

-# Lick your lips.

-Pick 'n' mix!

It even had its own ad.

It was that treat. You got to choose which sweets you wanted,

you got to choose your favourites.

With a pick 'n' mix bag you got to fill it up and, you know,

however much you put in it was always too much.

# There's no pick 'n' mix like Woolworths' new pick 'n' mix... #

Cherry lips, cola cubes, strawberry bonbons, yum-yum.

Brings back the fondest memories of Woolies' pick 'n' mix.

If only there had been such affection for the eclectic mix

of other stuff that it sold.

Woolworths had for years felt like a business

out of its time, till in the crunch of 2008 it could no longer

get its stock on credit.

That was the final straw and the banks pulled the plug.

NEWS: The last remaining Woolworths stores

have been closing their doors

exactly 100 years since the company opened...

It was just like a kick in the guts.

You just couldn't believe that that actually was

going to be the last day

you were going to open your store.

For myself, 18 years after I'd started

and for all my staff who, that was all they knew.

An absolute disaster. Woolworths was an institution.

They've been here for 50 years.

We all grew up with Woolies.

In my day they used to have a deli counter.

I think they sold ham and luncheon meat and liver sausage

and fantastic stuff like that.

Once it's gone... It's a bit like taking the village school

out of the village.

The customers towards the end became bargain hunters.

They wanted as much as they could for as little as possible

and you can understand that from their point of view,

but for us that was devastating.

I remember at the end of the day just going up to the doors in tears.

I remember turning round and just seeing everybody in tears.

Woolies wasn't the only casualty.

During the boom years, many retailers assumed

the good times would go on forever

and they expanded recklessly.

And now they were crippled by unaffordable rents on long leases,

high business rates and massive debts

at a time when sales were plunging.

When the banks ran out of money to lend,

huge numbers of our favourite stores were no longer viable

and many went bust.

Jessops,

Habitat,

Blockbuster,

Clinton Cards,

HMV,

MFI,

and Comet,

all of them collapsed into administration.

What started with Woolies spread like a virus

through our high streets

and our chain stores were particularly badly hurt.

Last year they closed almost 7,500 outlets.

That's twenty shops gone from our town centres

and high streets every single day.

The killer pressures from online and the banking crash

made many of our high streets look like the aftermath of an apocalypse,

with their boarded-up windows and deserted interiors.

Shoppers fled them.

When it comes to actual foot flow coming through our shops,

I mean some days we take less than £100.

Some days... One day we took £35.

I mean, you know, we've got four members of staff, plus drivers.

How other people can possibly survive is beyond me.

Lots of the good shops have closed down now.

We had a nice HMV, that's gone.

Now really there's just charity shops on the high street

and coffee shops.

For those businesses that have just survived,

many have only enough money to stagger on like the living dead.

In economic terms, they are barely alive...

..which is why some call them zombies,

a curse on our economy, and perhaps they should be closed down.

Could store closures actually be a good thing?

Now, that may sound heartless, but the evidence of past recessions

is that economic renewal is impossible

until unviable businesses, so-called zombies,

are put out of their misery.

The point is that bank loans provided to zombie firms

are bank loans that are frozen and unproductive.

Far better, perhaps, for the zombies to die so that the banks can support

younger, vital retailers capable of growing and hiring.

But just as many of our shops are heavily in debt,

so too are millions of us.

The boom and bust left us struggling

with record levels of household debt.

And we've become 7% poorer since 2010,

as our pay has failed to keep up with the rising cost of living.

When the recession hit, obviously, my salary went down a little bit.

My husband's salary went down a bit.

I had been shopping at Tesco every week

and by the end of the month I'm thinking, "Crumbs! My money's gone."

It was really 2009/10 before consumer behaviour

started to respond to the change that was happening...

And that's where you saw this change in people's spending habits?

It was and it was very dramatic. I mean, it was...

I say overnight, but within a quarter or two.

And in supermarket retailing terms

a change in a quarter or two is overnight.

It's the kind of change if it took place over five years,

you'd say was a major trend

and it happened within two quarters.

The average size of a weekly shopping basket

shrunk by about 5%.

With less spare cash in our pockets, the shopping bonanza of the '90s

and early millennium feels like a far away dream.

Today's high street seems to resemble

an even earlier, much more austere age.

There are opportunities for retailers in hard times.

Some stores have been doing pretty well out of Britain's lack of cash.

Stores which hark back to a by-gone age,

have been doing very nicely, thank you very much.

100 years ago, penny bazaars were the big thing.

Shops like Marks & Spencer, in which everything cost a penny.

Today, no high street is complete

without their 21st century equivalent - the pound shop.

But there ARE businesses returning to the high street

which hail from an even more distant past.

Writing in 1835, Charles Dickens, described a particular

Victorian institution as low, dirty-looking, dusty.

He was describing pawnbrokers, and Dickens might not have approved,

but since the banking crash, pawnbrokers have been booming.

But these days, they look nothing like Dickensian hovels.

This one looks more like a bank.

Fish Brothers was established in 1830 by Charles Fish,

a former Bank of England clerk who used his pension of £400 a year

to help set his sons up

with jewellery and pawnbroking shops in London.

As a jeweller for when we're feeling flush

and a pawnbroker for when we're on our uppers,

Fish Brothers is a barometer for the state of the economy.

When I started in January '58,

retailing was getting stronger and stronger.

Pawnbroking was just drifting along. It wasn't growing.

It wasn't getting particularly any smaller, it was just there

and we actually didn't see much of a future for it.

In the '50s, pawnbroking tended to be a small, shabby business

hidden down a backstreet, or at the back of a shop.

Now, it's a booming industry,

expanding at its fastest rate for more than a century.

You can't miss it on the high street.

Last year, four new stores opened every week, all over Britain.

In 2006, there were 600 pawnbrokers. Today there are more than 2,000.

It's improved not by the numbers of people that we serve,

but by the amount of money that they want to borrow,

because we're actually getting different people

coming in to use pawn brokers,

mostly because the banks

are failing lamentably to do the job that they always did in the past.

So we actually have business people coming in to take out

short-term loans to help them in their businesses.

We even have some people who come in to take out loans

for deposits on houses and the like,

so how pawnbroking is being used has changed.

With their jewellery arm already online,

Fish Brothers is thinking of doing pawnbroking on the net

to win a new class of customer.

Online pawnbroking is aimed principally at the middle classes.

Lots of people with private school education

and all those bits and pieces

which they're probably struggling like mad to fund,

er, and...

online pawnbroking would fit their bill perfectly,

because they don't actually want to come into a pawnbroking shop.

Pawnbrokers, with their interest rates of over 80% a year,

aren't the only businesses offering easy, if expensive cash.

Think of pay-day loan companies and cash converters.

Even betting shops for those who'd prefer to gamble to get more money.

And back from the past is another store combining pricey credit

with the promise of a better life.

One of the striking things about the success of this business

is that it's based in part on hire purchase,

which is a way of buying stuff in instalments

that was hugely popular after the end of the Second World War,

but fell out of fashion in the 1970s and '80s

as credit cards became more and more popular.

Now, hire purchase is enjoying something of a revival,

due to the big squeeze on our pockets.

It's a case of satisfying "champagne appetites for ginger beer pockets"

as they used to say.

Welcome to BrightHouse.

BrightHouse's glittering temples of consumption sell everything

from smartphones, to tablet computers and 3D TVs.

Along with something to watch them from.

# Don't you pay any more, Mrs Moore... #

This is nearly 20 years

since HP seemed extinct with the disappearance of Rumbelows.

The shop's gone, but who can forget that ad?

BrightHouse's reinvented HP operation is doing pretty well.

Our customers are mainly female

aged between 26 and 45.

They would tend to be in the D and E socioeconomic spectrum.

The percentage of their spend on food and clothing would be pretty high

and therefore they have to be very prudent with their affairs

and what the BrightHouse deal does is, it allows them to buy

high quality furniture and electronics

and spread the cost over a period of time.

DOORBELL RINGS Door's open, Jules!

Hurry up, then, Mand. Trisha's about to start.

All right! Keep your hair on!

BrightHouse tries to reach out to its customers.

..the brighter way to shop with BrightHouse...

Here it is sponsoring the Trisha Goddard show.

I want you out of my life! I've found a new love.

It's important that they can realise their dreams.

My customers generally won't go on foreign holidays

or into fancy restaurants.

However, they tend to be very proud of their homes

and accordingly, particularly in their front room,

they want to have a reasonable carpet or rug,

they want to have a sofa that they can A, enjoy and put their feet up,

literally, shall we say, and at the same time

it says something about them as a human being.

-You want a brew?

-Yeah, but I'll make it. You put your feet up.

BrightHouse might offer the dream, but that dream is not cheap.

Interest rates start at nearly 30%

and along with insurance and service contracts,

customers can end up paying more than double the listed price.

When you add in your APR and your insurance

and all the rest of it, the final purchase price

for some of your products does look quite high.

The market in which we are offering these loans

is one where the customer would find it difficult to access

loans from normal mainstream sources.

So the APR is not particularly an issue with our customers.

What our customers are interested in is that they can plan their budgets

in such a fashion that they can plan

their weekly or fortnightly outgoings

and be confident in how much they're paying.

Hire purchase shops,

pawnbrokers and the like are growing as British wallets shrink.

And there's another part of the traditional British high street

which is enjoying something of a renaissance.

The convenience store, like the one immortalised in Open All Hours,

has been with us since Victorian times.

Now it has a new incarnation,

with a lot more financial muscle behind it.

Granville, fe-fe-fetch a cloth.

The swallows are leaving, Granville.

And they're le-leaving it all over our window. Get it off.

Since we've all got to eat, you might have thought

that the big supermarket groups would have emerged unscathed

from our economic malaise.

But they too have been forced to adapt.

As we've scaled back our once-a-week shop in giant superstores,

the supermarket chains have adapted to our new frugality.

We're doing a smaller weekly grocery shop and we're topping up,

as and when we need it.

As this increasing trend of customers shopping

more frequently and more locally has come back.

If you like, we've started shopping

the way that our parents and grandparents did.

It's clear that there's an opportunity to serve

that customer who needs that top-up shop.

It plays into a trend that accelerated after 2008,

which was, customers wanted to shop little and often

so that they didn't have to drive their motorcars, rising fuel prices,

and they could avoid food waste.

From price being important to value being important.

Gone is the golden age for the vast superstores

when we jumped into our cars at the weekend,

headed to an out-of-town supermarket

and spent lavishly on the weekly shop.

What was known as the "space race" to open more and more

and larger and larger supermarkets now seems to be over.

In the future, just building more and more new stores would not be

the right thing And we saw an opportunity to go back

into these forgotten high streets, take over clothes stores,

take over pubs that had closed and were closing rapidly

and put in a store.

There's no shock for me in seeing convenience stores,

food convenience stores

and the big supermarkets opening hundreds of them.

Because you've got to say, in the next decade,

how many people want to run round a supermarket with a trolley?

They're going to be doing their big shop online,

and then they're going to be topping up in local convenience stores.

NEWSREEL: Shopping is a wonderful excuse

for exchanging the latest village news.

Yes, shopping's a wonderful excuse...

The local convenience store is seen as the future

by many of the major chains.

The convenience market is expected to grow from £35 billion this year

to £46 billion by 2018.

This long, long period of economic stagnation has made us

much more wary of shopping till we drop.

Long gone are the days of rampant, conspicuous consumption.

Today we've entered an age perhaps of more considered, more careful,

more thoughtful consumption.

It's generally become referred to as savvy shopping.

I can certainly remember walking the high street with my mum.

She'd walk the entire high street, up and down, not buy a thing.

She'd check everything first before she then did her weekly shop.

I think that kind of mindset has come back to consumers today.

Cash-strapped consumers have helped to re-create a high street

with one foot in the past, of moneylenders and corner shops.

But if the high street is to stand a chance of surviving,

it needs to renew itself more fundamentally,

by working with the power of the internet,

rather than just seeing it as a lethal threat.

You have to be multi-channel, omnichannel.

That you have to understand what e-commerce means.

You have to understand what m-commerce means you

have to understand what s-commerce means.

You have to understand what a mobile,

what an electronic wallet is.

You have to understand what cardless transactions are.

And you put all those things into place, you can make money.

The high street needs to combine the best bits of online

with the best bits of the in-store experience.

Some high street retailers are beginning to do just this.

They've started to offer "Click & Collect",

where the customer has the convenience of buying online,

but then collects from a local store.

That's very attractive to people.

They buy something big, they go to the store, when they get to the store

it's all packed ready for them, and then if they want to

they can open the parcel and have it explained to them,

and, hopefully, they may even buy something in the store.

It's all integrated today.

But high street retailers are going to have to be even more creative

in their use of the internet.

Because there's a new type of online shopping experience

with which the high street is going to have to keep up.

It's called social shopping and ASOS,

Britain's largest online fashion retailer, has pioneered it.

Social shopping is where customers use online social network sites

like Facebook to gather and share ideas

about products, brands and deals before they buy.

ASOS isn't just an online fashion retailer

where you can browse and buy clothing.

It's probably the way it uses social media

that will turn out to be more significant.

Social media has been our megaphone globally

for what ASOS is all about. When we started out, it didn't even exist.

ASOS, originally known as As Seen On Screen,

started in June 2000, selling a wide mix of products

that we might have noticed in films and on television.

Nick Robertson came up with the idea after hearing

that when the broadcaster NBC aired the hit '90s TV show Friends,

it wasn't just hairstyles that people wanted to copy.

4,000 enquiries were made asking where

a standard lamp could be bought.

But it was clear to you that it was clothes that were really taking off?

Well, that the transition point, so out of everything we were selling,

it was quite an eclectic mix at the time,

it was the fashion that was out-performing.

At first, ASOS sold copies of clothing worn by celebrities,

but it's since become a fashion giant with its own brand.

And what has supercharged its astonishing growth

is the power of social media.

ASOS uses social networking sites like Facebook,

Twitter and Google Plus,

to offer their customers helpful advice in all things fashion.

From pointing you in the direction of a new brand

to what to wear or how to style for an occasion.

With Glastonbury, which is a big moment for us,

the main thing would be giving our 20-somethings

a bit of an inspiration guide of what to wear.

We will put all of those key pieces into a gallery

onto Facebook for them

or we'll tweet about it so they're over all of the different trends

that are there and aware that you can buy it on ASOS.

All of that will then link through to sites

so that they can straight away with one click

go and purchase what they need for Glastonbury.

Say I've written a blog post and maybe I've featured something,

an ASOS product that I've worn,

I might tweet a link to them

and they'll reply and they've got multiple twitter accounts,

one that's just dedicated to customer service.

If you've got a problem with an order

they'll tweet back within minutes.

You feel like there's that one-to-one connection as well.

With over 2.5 million Facebook followers,

more than 2 million on Google Plus and half a million on Twitter,

the numbers of customers ASOS can reach

via social media is almost unlimited.

Once we realised its capability, which is a megaphone,

and they will talk about things that are interesting and relevant to them,

then our role within that is to keep providing them with interesting

and relevant things to talk about.

Social media such as Twitter and Facebook

gives retailers the ability to find out much more than ever before

about what their customers actually want

and to nudge those customers

in the direction of certain lines and styles.

And for a company like ASOS, it makes it much cheaper

and easier to expand across the world.

This way of selling is exploding.

It's enabled us to internationalise, at a rate that we just

couldn't foresee, and if you told me that I was going to be

the biggest online clothing retailer in Australia five years ago,

without any significant marketing investment,

I would probably have said, "That's not possible."

The reality is we are the biggest

clothing online retailer in Australia,

having never placed a single normal advertisement down there,

and that's purely through the benefit of social media.

The smarter high street retailers recognise the power of social media.

You go to China where you've got Weibo,

there's 450 million people live online.

And just the capability today

of just how you can access in this new social...

in this new world of just easy access, quick access,

just the things that these kids are permanently...

permanently on all these social media outlets

is where we've got to play.

And, you know, that's, that's the consumer.

Can the high street harness the power of social media?

The answer is already here, and is carried in every one of our pockets.

Shopping on mobile phones

and other portable devices is beginning to boom.

And because they're always with us, it means we can shop any time,

any place, anywhere.

Today, 40% of British consumers have a smartphone.

By 2016, it's going to be 90%.

So this will be the way consumers will shop - in beautiful stores

like this, but also online.

So the future store is this future store. It's the smartphone.

Some of our leading high street retailers

are looking at how to use mobile phone technology to convert

in-store browsing into purchases.

The fashion retailer Diesel

is experimenting with a cutting-edge system called "Tapestry".

That allows customers to scan products

to find out more about them and interact with the retailer.

I come into a Diesel store and there's a whole range

of stuff that I like. There are specific items

that I want to find out a little bit more information about,

so either scanning a barcode or tapping my phone on a tag,

it will then pull down more digital information around that product.

So a pair of jeans it could tell me where they were made,

if there's a catwalk show of someone wearing them,

what a blogger might have thought about it.

If you didn't want you to buy that item there and then

you've added that item to your wishlist.

You're saying to the retailer,

"Well, I've told you that I like this thing."

Anything new about it that you think I should know,

send it to me via my mobile phone,

because I've got my mobile phone on me all of the time.

And then if at that point I decide I want to buy it

I can just click out and go straight to the link

on the retailer's e-com site and buy it there and then.

Many of our future stores will, in a way, become just showrooms,

where we touch and feel products,

then buy them online later, once we've left the store.

I like to buy things for the cheapest price possible,

so sometimes if you know you can try it on in a store

and find it online on sale, with a discount code or just for less,

I'd prefer to do that. I'm happy to do that.

This use of mobile technology is set to have enormous ramifications

right across the retail industry.

We think the mobile device, be it a tablet or be it a mobile phone,

used in-store to help you do your weekly grocery shop,

to help you plan your recipes, to inspire you with those recipes

and also help you manage your budget

is going to be a big part of the future.

It's probably five to ten years off yet, but it's coming towards us fast.

It's a new era of retailing.

The era of retailing where you can buy what you want

on a phone as fast as you like.

There's a great statistic.

Most customers will spend

50 to 60% of the spare time that they have playing on a smartphone.

We are watching customers adopt mobile shopping at a rate

that even a year ago we couldn't have imagined.

I predict that within just a few years

more than half of all of our transactions

will be happening on tablets and mobile phones.

That is an absolute revolution

and we have to rethink so much of how we do.

So the future of shopping is inextricably tied to online

and mobile technology.

But where does this leave the old-fashioned British high street,

the simple face-to-face encounter between customer and shopkeeper?

This is one of the most celebrated books

ever written about British retailing.

It's called The High Street. It was published in 1938

and it depicts a golden age of family butchers,

of cheese mongers and clerical outfitters.

But it's the kind of thing we only see these days in period dramas.

What's the chance of a second act for these types of shops?

As we have seen in this series,

our high streets have continuously evolved.

Ever since the Second World War, people have been complaining

that our high streets are under threat.

First it was the large shopping centres,

then came the out-of-town superstores.

And latterly, the bogeymen have been economic stagnation

and online shopping.

For some high streets, these challenges mean a future

with permanently fewer and very different shops.

We can all recognise in our own high streets

that there's a good end of town and there's a bad end of town.

And actually keeping the bad end of town with maybe

30, 40, 50% vacancy, perhaps only charity shops,

isn't a good thing for the rest of the high street.

We need to concentrate into the good bit, allow, if you like,

the bad end of the high street to regenerate as something else,

regenerate as homes, because we need more homes,

regenerate as commercial property or community uses,

but regenerate away from retail.

They're empty cos A, nobody wants to go there,

B, the local authority hasn't invested in them.

There's no car parking, no street lighting,

they're not safe places to go to, or there just isn't enough demographic,

not enough traffic to justify it.

And I just say don't try and resuscitate the dead.

Concentrate on the living and make the living better.

To do this, we need to make

doing business on the high street less onerous.

And this means dealing with unaffordable rents

and high business rates.

The first thing is, rents will come down

because landlords won't get those idiotic rents they were getting.

Market economy adjusts.

There will be about 40 big high streets left in the country.

It's shopping centres, the big towns will have a good high street.

The rest of the localities, the small out-of-towns,

the smaller towns, will have to find a better way

of filling their high streets.

High streets need to re-invent themselves, to give the shopper

a special experience, something they simply can't get online.

Few high streets can compete on price.

But they can offer us something social, something convenient

and something richer as an experience

than a soulless shopping centre or the sterile internet.

Here at Boxpark, in East London, they're re-defining shopping

by bringing back a bit of theatre and pizzazz.

Boxpark says it's the world's first pop-up mall,

built out of refitted shipping containers.

It's filled with fashion shops, galleries, cafes and restaurants.

Fundamentally, people like shopping.

And I think you've got to realise,

as a retailer you're giving somebody an experience

and people want to be entertained in your store.

And they want to have a great experience

and go, "I really enjoyed my day out shopping",

and I personally believe you can never replicate that feeling online.

I often describe the experience of buying online

to watching fireworks on TV.

You know, you just don't get the sensory experience

of being at a real, live fireworks show.

The clue is in those words "great destinations".

Our high streets need to be places that are easy to get to,

easy and cheap to park, because most people will want to travel by car.

They need to feel safe. They need to feel well-lit.

They need to be dry, and therefore have covered areas,

and as well, they need to have a fantastic selection of shops,

which, if you like, demands attention from customers.

Some of our high streets already offer a fantastic selection

of independently-owned boutiques and specialist retailers.

This one, in the seaside town of Whitstable in Kent, is thriving.

The streets are safe and clean. There's affordable parking,

and rents and business rates are more realistic.

But at the heart of its success are local traders who are offering

an experience that the internet cannot match.

We've got go back to local shops.

You know people want to go to a fish monger, a butcher.

I think the high street has a very good opportunity.

Individual service will always have a place.

Boutiques, there will be more. There will be doctors

and dentists in the high street. There'll be smaller bookshops.

The high street will become attractive,

there'll be antique dealers, specialty dealers.

Take this shop, my local grocer,

which opened in Muswell Hill back in 1897.

It was founded by William Martyn

and it's been in his family ever since.

Martyn's has been around since the early days of Marks & Spencer

and Sainsbury's, but unlike them, it still looks like it.

We're stepping back in time.

Martyn's is still going strong. Why?

Well, it's because the Martyn family understand retail,

they understand what their customers want,

they offer something unique.

So places like this are a timely reminder

of how we British are a nation of shopkeepers

and how when we get it right we excel at retail.

The British are good at retailing.

I know that Napoleon meant it as an insult

but we really are a nation of shopkeepers.

Shopkeeping is our national sport. You know, it's what we do.

If you've got a good product, good service,

good innovation you can still make money

as in evidence by still some successful retailers in the UK.

There might be parts of the world where things are a bit cheaper,

but the balance of quality and service

and price is unsurpassed.

And I've been able to see retailing in most countries of the world

and I've participated in a lot of countries.

Over the last 60 years, we fell in love with shopping,

but we also became a little too passionate,

a little too dependent on it for the health of the economy.

So retailing has stagnated since the crash

and the boom years aren't going to be back any time soon.

But shopping and retail remains central to our prosperity.

It is what we do and who we are.

Our retailers are world class.

And they'll continue to be massively important to us

as generators of precious tax revenues and huge employers.

The very best of them will continue to surprise us, even delight us,

with imaginative and creative ways they find to take our money.

Subtitles by Red Bee Media Ltd