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Retail Renaissance

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The high street is dying, that’s what we keep hearing from all angles of the media but is it?

No, its evolving to meet the needs of generational shifts in shopping habits which retailers must adapt to in order to give consumers a desirable experience. Those that respond positively to shoppers and adapt, appreciate the increased value this change offers for potential survival. Retail is no longer there to serve the customer, it’s the customer who decides if retailers remain relevant to the high street.

Those retailers that refuse to listen are deserving of their fate. It’s not a surprise or the fault of external factors when a major retailer, who failed to adapt, calls in the administrators. Social and economic factors are not going to ‘improve’ as they are proving to be the norm, it’s just how life is now, therefore boards of major retailers need to stop procrastinating and adapt fast. With 89% of UK sales still generated through physical retail, the desire to shop on the High Street is still prevalent, retailers need to adapt creatively to capture a slice of those sales.

To believe that your exact same format which has been successful for decades remains relevant today as it did then, is wrong. Millennials are bored with the same format and Generation X, Z or Alpha are not ignorant to poor retail. This belligerent approach only serves to insult your existing and potential customers. That’s why they’ve abandoned trusted retailers and by doing so, they are clearly stating that it’s you not them that’s the problem.

From traditional retail chains to independents and pop up stores, the ones that ‘get it’ are doing so to great effect. Whether it be through introducing speaker spaces within the store, to conducting free classes or work zones to encourage consumers to dwell and soak up the atmosphere. By also introducing other brands to coexist alongside your brand, is winning hearts and minds. Retail is changing. Changing positively but perhaps not fast enough to decrease the failures of trusted retail brands and reduce the vacant units on our high streets.

Debenhams tried this by introducing Patisserie Valerie cafes within their stores which proved fatal for both brands, partly due to their incompetence to manage their finances or understand the consumer. You don’t ‘accidentally’ misplace £40m neither do you introduce a traditional patisserie into an already stale retail format such as Debenhams, in an attempt to entice new and younger shoppers. The opportunity to revive its fortunes could be taken from its past when it introduced designer names to its stable with huge success. Those designers are now only known by a generation who are 40+ and irrelevant to the shoppers needed to keep the Debenhams brand relevant on today’s high street.

With Arcadia group also struggling reputationally through the alleged actions of its high profile owner and also financially, they have a huge task ahead to transform. Reducing your retail footprint by closing stores to cut costs is not the solution, change is. But is it too late to turn some of Arcadias brands around, maybe not? The larger ‘flagship’ TopShop stores do it well by adopting shared spaces that offer consumers other brands or services like piercing or cosmetics to create an immersive shopping experience. Unfortunately, Topshop don’t seem to translate this successful format as well across the regions in the UK. Translating this ‘experience’ model across the entire estate is essential to relate to consumers who don’t necessarily have the means or desire to travel to a ‘flagship’ store. Placing short term profit over evolution is short-sighted as this approach is somewhat ironic, a lack of investment makes you stale rather than revolutionary, making a brand irrelevant to today’s shopper.

Those retailers who are winning have amalgamated, rather successfully, multiple brands under one roof that complement each other and often work in concert, to offer convenience for the shopper. Successful examples include the Argos purchase by Sainsbury’s and introducing Argos shop in shop (SiS) within larger Sainsbury formats and in 11 stores to include the desirable Habitat brand, which was snapped up by Argos several years back and now revived through the Sainsbury’s acquisition. This has enabled Sainsbury’s to continue trading within the non-food category and remain current without distracting from its core grocery business.

As the pioneer of mail order fashion, re-imagining retail seems to come easy for Next who have successfully evolved its physical presence with the inclusion of SiS concepts in selected stores. Brands such as Lipsy, Paperchase, Henna and Costa can be found in the Next Oxford Street store and Mamas & Papas in its Bristol Cribbs Causeway store. Unsurprisingly this approach works for both anchor brand and SiS. With a staggering 2,481 stores disappearing off the High Street in 2018, the opportunity to split the overheads in tough economic times impacted by changing shopping habits, this is a successful combination for both retailer and shopper.

Those who complain that they can’t make retail work need look no further than their competition who are getting it right through understanding the zeitgeist. Shopping habits have changed with generational shifts and the glory days many failing retailers harp on about are not going to make a reappearance. It’s up to retailers to carve out a niche and appeal to the generations who now prefer both the physical and online aspects of retail, but are also seeking convenience and above all an experience.

Experience to try, taste, smell, learn, question, dwell to be part of something that transcends generations and the stereotypes of what ‘Retail’ should be. Retail can be whatever you want it to be.

Successful retail evolves to remain current and relevant to its audience. A retail renaissance is what we need.

To read the full article please visit ipm Bitesize

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Retailers, It’s time to be relevant to consumers

Retailer Blog Photo

What’s happening to the British High Street? It is facing record levels of store closures in the first half of 2018. According to research by PWC, on average, 14 stores a day, 4,400 in the first 6 months, are closing their doors with 85,000 jobs lost in the first 9 months of this year. The industries most affected by the closures are fashion and electrical stores. Not far behind them are pubs and restaurants. There are few brands that haven’t been affected with coffee Shops and ice cream parlours accounting to the small amount of store openings.

As a nation of shoppers, why are we turning our back on the high street?

It is predicated that due to the large amount of choice now in the consumer’s hands the way they shop will change. Online shopping is predicated to account for 25% of non-food sales by 2022 which is a 5% increase on what it is today. The consumer now has the ability to shop across a variety of platforms from the high street, e-commerce, m-commerce and social commerce.

The choice to shop this way will increase through generations that grew up with the internet at their fingertips coming of age, working and having disposable income to spend. The generation that grew up with ordering something in the evening and having it delivered to their door the next day may not see the attraction of the high street. As shops close their closest functioning high street might get further away and less appealing to travel to when after a few clicks their product is brought to their door. The impact of online is a self-fulfilling prophecy and once the heart of a community is gone, it’s very difficult to entice it back as many councils are finding Public Houses, Restaurants are also affected due to digitisation – if you can order Italian food to your door are you going to leave to go to a restaurant? In-Home Leisure – If you have a huge TV/Projector, top of the line speakers, streaming service are you going to pay £30 to go to the cinema? Or go to watch the Football in a pub? Supermarkets interestingly do not seem to be affected at the level, perhaps due to people buying their own food to cook at home in line with changing dietary trends and therefore becoming more conscious of eating out?

The impact of the changes being posed may be too late. So what’s being done?

The introduction of a review for all retailers in England with a rateable value of £51,000 or less, intended to cut their business rates bill by one third is a positive step realising an annual saving of up to £8,000 for up to 90% of all independent shops, pubs, restaurants and cafes.

In some locations this is perhaps too late when you consider the vacant properties on the diminishing high street. The PWC research highlights that London has the highest change between closures and openings with Wales having the lowest. The numbers might be big for London but when you consider the size of some of the high streets in Wales compared to those in London -22 shops could be the closure of a whole High Street.

It also does not help those retailers, multiple or independent, with a larger footprint. For stores which anchor the high street such as Debenhams, HoF, M&S etc. the reduction in business rates for these retailers by local authorities, delivers a longer term tangible wealth to the community.

“This government constantly refers to a ‘dividend’ for all, which is used entirely in the wrong context, as there’s no dividend for communities whose high street have already been decimated and resemble ghost towns.”

What can retailers do for themselves?

The industries that were least affected by the closures such as Ice cream parlours and coffee shops could be down to the public still enjoying the little pleasures in life. It could also be that the brands have realised that consumers are now looking for personalised experiences. Millennials seek out experiences and value experience over material items. Those retailers serving the Instagram generation are offering them locations, products and experiences that are picture worthy and have bragging rights. Acknowledging these trends and the new way people shop are perhaps the key differentiators that have kept them from closure and continue trading successfully.

Although the numbers, for many, paint a negative picture for considered purchases there is still time for them to turn it around. Our research has highlighted that over a third of shoppers still prefer to go to bricks and mortar shops to buy their technology. There are still consumers who want to feel and touch products before purchasing. They are also looking for advice from staff and an immersive experience which some retailers do recognise however sadly many do not and are destined to failure unless they acknowledge and change soon. The investment made in retail by many brands is treatment to this consumer desire.

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