The Impact of Online Shopping on Local Business

The Impact of Online Shopping on Local Business

Local businesses are the “social glue” that binds communities together, and many of them are struggling more than ever.

The high street has lost many businesses in the past decade, including some very big names. And, undoubtedly, some of them blame online shopping for their demise. But, about 29% of addresses on the high street in Great Britain still belongs to retail shops. So, are high street shops breathing their last breath, or are they finding ways to adapt to the seismic shift in our shopping habits?

Changing Shopping Habits

The popularity of smartphones has made in-store shopping ‘more experiential.’ Thanks to smartphones and high-speed internet, we can easily check everything about a product before we make a purchase—including the price, availability, quality, etc. We don’t need to go to a store anymore in order to see whether we’ll get a good deal or not. So, now, when we go shopping, we look for a greater ‘leisure experience’ rather than anything else. As we can get everything online, many of us go to brick and mortar shops simply for the social trip. We view it as a part of an important family ritual or simply as a means to entertainment.

Online shopping is challenging high street shops to create an ‘experience’ in order to stay in business. As they have the mass to draw in consumers, large and well-provisioned retail shops aren’t having a hard time with this change. Smaller high street retailers and other local businesses, on the other hand, have to work harder to add leisure elements to the customer experience. To maintain interest among shoppers, small-town shops will have to excel. Luckily, small local shops still have one huge advantage over large online retailers when it comes to customer experience—the ability to forge close, personal relationships with customers. 

Small business is built on personal relationships. Compared to large online retail chains, local businesses have more opportunities to offer great, personalised customer service. But now more than ever, local high street shops need to capitalise on this ability. Aside from making their shops a nice place to be, they can partner with non-competing shops to organise sales or events, get involved with community events, and work together with local schools. Unlike online retailers, local business owners have more opportunities to meet with their customers in person. In order to keep their businesses afloat, many of them will need to better leverage these relationships.

Intensifying Competition

Before the rise of online shopping, out of town shopping centres were the only major competition to high street shops and vice versa. The only significant advantage out of town stores had over high street retailers was convenience in the form of easy access and free parking. For a while now, it has been clear that convenience is key to high street survival. Obviously, online shops offer unprecedented levels of convenience to their customers, making things even more difficult for high street retailers. 

Setting up a website, promoting products, organising payments, arranging shipping… all of this can now be done online and with greater ease. High street shops are forced to compete with lower-overhead businesses that operate entirely online. 

To stay competitive, local brick and mortar shops must find ways to beat online businesses at their own game. Online businesses are forcing high street retailers, both big and small, to mix ‘brick and mortar’ and online features. To keep the high street alive, brick and mortar shops are increasingly investing in online customer experience and digital marketing. Strong performers in this area include high street retailers such as Argos and Next, and supermarkets such as Sainsbury and Waitrose. 

Many shops have added new, convenient purchase and return options. Online shopping has also urged many high street shops to offer same-day delivery to their customers. 

Some high street shops have even started using AI customer service chatbots on their sites in order to offer 24/7 customer service and improve the customer experience. AI chatbots can answer customers’ questions, offer them shopping advice, and help them pick out gifts for friends—even outside shopping hours. 

For instance, H&M’s chatbot on Kik recommends outfits to customers based on their style and colour preferences. Essentially, it acts as the customer’s personal stylist. Thanks to the rapid expansion of AI, chatbots have become available to small local businesses as well, and not just the biggest retailers.

To drive footfall in-store, local shops are also investing in geofence technology and local SEO marketing. Offering online coupons that can only be used for “offline” purchases has also proven to be a great tactic for local businesses.


Contrary to popular belief, online shopping isn’t the end of local business. But it is the biggest driver of change in retail. To stay competitive, high street shops must embrace the change and get creative.

Jennifer Wilson is a writer at She knows business processes and operations management inside out. As she understands all the challenges of running a small business firsthand, it’s her mission to tackle the topics that are most relevant to entrepreneurs and offer viable solutions.

The Impact of Online Shopping on Local Business


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