Review: Future of the High Street 2021
Town centres have a healthy future but it does require a change in approach from stakeholders including landlords and local authorities while retailers need to make their physical presence more relevant and seamlessly engaged with their digital operations.
Speaking at The Retail Bulletin Future of the High Street 2021 virtual conference Bill Grimsey, former retail CEO, acknowledged his former roles at large retailers had caused some of the current problems for the high street and that he now wanted to help with their renaissance.
“I wanted to try and unpick some of that stuff. There is a very prosperous future for town centres with independent businesses and young people at the forefront of their renewal. I wanted to help and to add to the debate,” he says.
Apocalypse for small independents
He points to the parlous state of many small retailers who took on Government loans during Covid-19 and now typically have five-times more debt than before the pandemic. This combined with the shift online might potentially lead to the loss of up to 50,000 of the 150,000 retailers he has studied. “A third might not survive. Imagine a chain of 50,000 stores closing, it would make the headlines. It’s like a death by 1,000 cuts,” he suggests.
However, he does remain positive and points to the need to “de-car” towns because it is inevitable by 2050 that cars will no longer be owned or purchased but will instead be rented when required. “There will require a transition so why not begin doing it now,” he says, adding that local authorities need to create places that attract people with not just retail but also entertainment, health, education, and events.
Such change also requires landlords to embrace change, according to Grimsey, who says “their halcyon days are over and they need to think about their assets in a different way” which could involve collaboration in order to create exciting new models.
Move to turnover-related rents
David Pike, director of Calendar Group, says a move towards turnover-related rents would be step in the right direction but there is reluctance from landlords. “Landlords and retailers need to work together and share exposure to the risks. Retailers need to be more open about their turnover with landlords and this should be matched by landlords sharing footfall and other numbers with retailers.”
One complication is around the multi-channel role of the store and Pike suggests one solution might be for click & collect orders to be added to a store’s turnover while any online ordered goods that are returned to that outlet would then be deducted from the unit’s turnover.
The interchange between online and in-store is certainly an issue that is being widely debated. For Krisi Smith, co-founder of Bird & Blend Tea Co., the focus of attention has been to get online-only customers into physical stores. “The question was, do we want our online-only customers to go in-store? The answer was yes because that makes them loyal. It’s harder to get this from them when they are just online.”
Work more with brand owners
Ken Daly, CEO of JML Group, also recognises the value of pushing customers into stores and recommends retailers should be working much harder with brand owners as they can be powerful drivers of people into physical outlets. “Retailers should put their top people on this because if it is neglected then the brands will go more DTC (Direct to Consumer),” he says.
Ribble Cycles has worked particularly hard to develop its physical stores to ensure they add both experience to customers and have commercial value. David Stacey, commercial & operations director at Ribble Cycles, says: ”We know that having the [customer] touchpoint of in-store means they spend more, are less likely to cancel an order, are higher than average repeat customers, and are more likely to refer us to other customers.”
Leveraging technology in-store
The Ribble stores play an important role in the overall journey of customers because it typically involves seven interactions across channels before a purchase is made. Integral to the experience is technology, including massive digital screens and interactive devices, which sit seamlessly within the physical space.
Mike Dowson, commercial director of Trust Systems, says the advance of technology solutions, especially when running off the Android platform gives retailers agility around the mobility of their technology solutions and great flexibility when developing cost-effective applications.
He says working in partnership with Wonderlane has helped it develop many solutions for interactive touch-screen devices including Point-of-Sale, self-check-out, clientelling, taking orders for home delivery, click & collect, stock checking, and price compliance.
Showrooms not sales rooms
As well as kitting out its stores with technology solutions, Stacey says it is equally important that the outlets are not treated like old-school shops whereby sales per square foot is the overriding metric. “If we measure our showrooms this way then they just become sales rooms. That mentality is not the right approach. We report all the touchpoints with customers and use data to predict sales. We recruit from the hospitality industry as it’s more about the experience and not about where the sales come from,” he explains.
For Penny Grivea, MD of Rituals UK & Ireland, physical stores are playing a crucial role in the company’s growth and they currently account for 65% of sales. It has enjoyed a 30% increase in visitors on 2019 numbers.
“Stores play a vital role as we grow our brand. We’re sensory-driven so customers can touch and smell the products. This helps build relationship with the customer. Stores need to tap into emotion and the community side of things,” she says.
Building on quality and trust
Liza Canneford, head of product for Jaeger at Marks & Spencer, agrees with this sentiment: “Customers are today interested in where products come from and who’s making the clothes. M&S pioneered this with its Plan A while Jaeger is synonymous with quality so now we have quality and trust, which is everything. People want to trust who they buy from and what they are buying.”
Building relationship with customers from a position of trust has certainly been a focus for Hannah White, head of marketing at Naturally Tribal Skincare, who says: “If the customer makes the effort to go into the stores then they are genuine customers. If we are authentic with them then it resonates. We have a source-to-jar journey so we can trace our products back to the source. This realness and authenticity gives us standout in a saturated market. The customers trust us.”
When combining these elements it creates a very powerful cocktail and for Bird & Blend Tea Co, it is proving to be a strong platform from which it can take advantage of the opportunities for acquiring more sites on the high street.
“The high street is a challenge but it’s a challenge to be taken. Brands like us now have an opportunity to take sites we’d have never got before Covid-19. If you get it right on the high street then you can really stand out as it’s less competitive.
Words by Glynn Davis, photo by Georgia Hawkins
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