The end of the high street: not with a bang but a whimper

It's easy to live in a left-wing bubble: between organic toiletries, pubs with locally-sourced food and shopping on the internet, sometimes it is easy to forget there are High Streets where a large number of people do the majority of their consuming. A few days ago, my delicate shield of ethical consumption was smashed when I spent a few hours inside the Westfield Shopping Centre near Shepherd's Bush, west London.

The phrase 'fish out of water' does not cover the experience that I went through. I assumed that Westfield employed people specifically to keep dirty lefties like me out of their palace of consumption. Much to my surprise, I was welcomed in and dazzled with the bright lights and the range of shiny baubles available for me to purchase. I had some time to waste, and decided to find a music shop to pass the time in. I briefly considered unraveling a thread from my shirt and attaching it to the door so that I could find my way back later, but then I noticed the handy maps available from an information stand. Armed with a plan of the place, and mentally comparing myself to Livingstone, I set out to explore this strange and unfamiliar land of retail.

As I walked past the juice stands and Sky TV sign up booths, two things become almost immediately apparent to me: firstly, that there were no music, DVD, books or games shops anywhere to be seen, and secondly that the shops which did make up the Westfield were almost exclusively either clothing or jewellery shops. This confused me, for surely the main point behind a large-scale retail development is to get as much diversity of shops into as small a place as possible, thus allowing consumers to satisfy all their needs at once. Apparently not, as the Westfield caters to a very small section of consumption, mainly high-end up-market deeply personal. For those who shop in the Westfield, the particular boutique they frequent is a statement about their individuality made through mass consumption, the triumph of late-stage capitalism. In short, I discovered that the Westfield is the last bastion of the high-end High Street retailers against the advancing tide of internet shopping.

Later in a gastro-pub serving organic, locally-sourced pies, I was firmly back in my element and discussing my afternoon with a friend. I said that clothes and jewellery were one of the few areas where internet shopping and has had little impact. My friend informed me that he purchases T-shirts and shoes online, to which I agreed. The internet's particular brand of culture is very suited to the T-shirt business and allows the consumer to seek out designs which speak to them. Here the internet has had success in breaking the High Street's stranglehold on fashion. I asked my friend, however, if he would consider buying trousers online and we both agreed the idea seemed somewhat perverse.

The internet has taken over from the High Street in areas where it does best: bulk selling of goods, mainly entrainment goods, where the major factors are price and range. The last time I went into HMV to purchase a DVD, a friend told me not to bother and that it would be 'cheaper online'. He did not specify a website or have any data to justify his claim, which was built on a cultural understanding that this variety of shopping is simply better on the internet.

So where does this leave the High Street, other than with pound shops and clothing outlets? Some things have to be brought in the flesh, and the time delay involved in internet shopping means some goods will always be purchased in meat-space. However, with the rise in smart phones, tablets and app stores, immediate entertainment purchases online are a reality. All that is needed is a shift in social conventions, to make the giving of online content an acceptable present, and there will be no need at all for High Street entertainment retailers.

The High Street is certainly in a bad state, and a simple Google search for 'the end of the high street' returns thousands of blog posts and broadsheet articles bemoaning the end of face-to-face retail and making lazy observations comparing the closure of Game to the rise of Angry Birds. The truth is that this is hardly a recent phenomenon. It was nearly two decades ago that Amazon's diversification into VHS selling meant that Saturday afternoons were no longer spent wandering into the city centre to buy the latest Simpsons collection. One article I read claimed that 2012 was the year the High Street would end, as if most people had only just discovered the internet. In fact, most High Street retailers discovered the internet a long time ago and have also moved into online shopping.

Most likely the current process will simply continue. Places like the Westfield will hold their own in certain sectors for a while, but eventually changes in technology and social conventions will move our lives and consumption almost entirely online. If the High Street does end, it will be slowly over many decades, and not because everyone turned exclusively to online shopping over one Christmas period. If the High Street does end, it will not be with a bang but with a whimper, and one which is already well underway.

Facebook’s IPO: Are those adds worth $100bn

In the eight years since Facebook first appeared online, the site has gone from a way to waste time to a social necessity. Today (especially for younger users) not having a Facebook account is akin to not having a mobile phone, in that you are likely to be left out of the loop by friends and work colleagues. Now the internet giant’s recent IPO suggests that this social necessity could be worth up $100bn as a company.

Facebook was founded in 2004 by Harvard University undergraduate Mark Zuckerberg, and since then has taken the internet by storm. First it became the world’s largest social network with over 800 million users. Then the site replaced Google in its position as the internet’s most visited site. Now Zuckerberg and his team have earned a new record after raising over $5bn from an initial public offering, the largest ever for an internet firm. More than just a commercial success, Facebook has added new terms to the popular lexicon such “to friend” and has redefined the use of the verb “to like” online. Brands large and small have rushed to establish fan pages on the website and entire real world conversations focus on events which took place in the entirely virtual social network.

What is interesting about Facebook’s petition to be partially floated on the Stock Exchange is that the information they have released has given us a rare glimpse at the numbers behind Facebook’s success. Facebook and other internet companies that offer a free service lack a traditional revenue stream upon which to draw. Most fall back on the tried and tested method of advertising. The value of an advertisement on a website is determined by the “click through rate” in other words the percentage of users who click on an advertisement to be taken away from the page which they were browsing to one which they had not intended to visit, prior to seeing the advert. Research has suggested that click through rates for most websites are very low as most users are resistant to the idea of following links online. This is partially due to a legitimate concern about internet security but also a response to the degree to which users are saturated with banners and links tempting (often unsubtly) users to leave behind what they were interested in the first place. This has prompted concerns that that this revenue model has become out dated and that many internet firms might be overvalued.

Facebook has relieved that a substantial amount of their $1bn annual net revenue comes from advertising, leading to speculation that intelligent internet advertising is having a degree of success in tempting users. Firms like Facebook use the personal information supplied to them to customise their advertising space to a user’s tastes, and thus boost the click through rate. This in turn makes advertising space on Facebook more valuable, not simply because of the larger audience but because of a greater degree of success. Try, for an experiment, changing your relationship status to “engaged” and witness the barrage of wedding goods and services that will come out of Facebook’s proverbial woodwork to tempt you to their pages. Often the advertising is more subtle than this, and usually it is from a trusted website. It is this clever use of Facebook’s greatest asset (its members’ data) which makes it a viable company.

However, all is not rosy in Zuckerberg’s world. Internet users are becoming increasingly aware about how their data is being used. The wealth of information which Facebook has built up is also a liability as the public demand restrictions on how this data is used. Facebook’s privacy settings are becoming increasingly complex, which is creating an incentive for uses to switch to a network that is more mindful of privacy.

For now Facebook retains its dominant market position, and the necessity of having an account means this situation is unlikely to change soon. The site has seen off competition from a variety of other social networks seeking to challenge its dominance, and even Google entering the fray with their Buzz and later Google+ services have had little effect on the state of the market.

Facebook should be applauded for changing the way we relate to one another. Upon meeting a new friend at a party it is easier (and seems less forward) to connect with said person via Facebook than to ask for a phone number – mainly because it is also easier to remember a name rather than an 11 digit number.

However, Facebook would do well to consider an alternative revenue model as users become more concerned about privacy. It is also worth considering that the click through rates of intelligent advertisements will eventually fall as users become tried of their saturation, just as we all became tired of banners atop websites in the early days of the popular internet.

This week Facebook’s founders and executives will be congratulating themselves after their IPO sets another record for the company – but if the site’s meteoric rise proves one thing, it is how quickly the internet can change and how complacency is severely punished. For further proof of this, simply ask anyone who still has a MySpace account.

Steve Jobs: An obituary

"It was sponsored by that guy from Apple computers." - Homer Simpson, 1996.

Today the word of Information Technology mourns the passing of a giant in the field, Steve Jobs. The Apple logo, and technical innovations such as the iPod and Macs, have become synonymous with the information age and the very idea of western capitalism. No one more than Jobs incorporated the ideal of the capitalist system. Adopted by a working class family, Jobs grew up to co-found the world's largest technology firm and amass a personal net worth of $8.3bn. He also embodied a middle-class aspiration of incorporating creativity and design into his firm's USP. Apple's innovations were as much artistic and design triumphs as they were technical and financial successes.

It is difficult to overstate the influence Jobs has had. His early Macs where the first computers to use a mouse and the Graphical User Interface (GUI), which allowed them to move away from the previous Command Line Interface and bring personal computing to the less technically minded. It is very telling that Apple's OS operating system has the most logical names for features (Finder and Trash versus Explorer and Recycle Bin); this is because they were the first into this brave new territory and were able to coin the names. As well as defining the personal computer, his firm still sets the benchmark in modern computing. All modern smart phones are modelled heavily on the original iPhone design, and the iPod is the baseline by which all personal MP3 players are measured.

Jobs' financial successes are also many. When he returned to Apple in 1997, he took the firm from being literally a joke (see the 1996 Simpsons episode Homerpalooza for proof how much of a joke Apple was before Job's return), to eclipse the behemoths Microsoft and IBM and become the world's largest technology company, with a market capitalisation of over $350bn. More than any other CEO, Jobs led from the front, his personality being inseparable from the brand and his trademark keynote addresses a defining feature of their new product launches. Apple more than any other technology company has fans as opposed to customers, and devotees would queue for hours to see the man in person and catch a glimpse of the latest products.

Regent Street

Tributes to Steve Jobs outside the Apple Store on Regents Street, London

Under Job's leadership Apple have become a powerhouse of creative and technical accomplishments. The brand has a reputation for being original and for being the best choice for digital artists, graphic designers, and many others in fields where computing and creativity go hand in hand. Always with a keen eye for good business ventures, they have sponsored smaller firms to great technical innovations. It is telling that it was Jobs who first saw the possibilities that Pixar offered when he bought the company in 1986. It is difficult to say which direction the company will move in now, but it is clear that the new CEO, Tim Cook, has some very large shoes to fill.

I started by saving that Steve Jobs epitomised a western capitalist ideal and I will conclude by returning to this point. The foundation stone of western capitalist society is the belief that personal individualism can be expressed through mass produced consumer products. Apple is the pinnacle of this, as being an apple customer makes a statement about you as a person. No other innovator or company has been the alternative, rebel in the market (against the mainstream Microsoft) whilst being the larger, dominant, top-dog firm. The mark Steve Jobs left behind will be felt by his firm and his fans, and his accomplishments will belong to the ages. Truly today we have lost a great innovator and businessman.