The Retail Conundrum
On the one hand we hear about the near collapse of Sir Philip Green’s empire. On the other, we learn that Amazon is opening a series of high street stores. No one disagrees that the retail landscape is changing, but is it dying or just shedding its old skin in order to emerge fresher and more relevant?
The truth is, it’s doing both – with money being the deciding factor in its direction of travel. Marry up retail brands that have money to invest in their stores, with consumers that have the capacity to spend, and you’ll create a retail space that will thrive.
But if you’re missing either of these components, the outlook is less rosy.
New retail brands that have launched since the rise of retail experience are double winners. Firstly, they have been able to design stores that meet today’s consumer expectations – brand-rich interiors, interesting consumer engagements and high quality, well-trained staff.
Secondly, they know that less is more in terms of store number. Skateboard clothing brand Supreme is an extreme example of this with its gargantuan appeal and tiny store in Soho. But all the successful retail newcomers have limited their store count to affluent cities (or shopping centres like Westfield) that offer high footfall and aspirational appeal. This is then projected around the UK through social media – and fulfilled by their excellent e-commerce capabilities.
Legacy retailers like Debenhams, M&S and Sir Philip’s Arcadia group lose on all counts with their traditional, static stores replicated hundreds of times across the UK – and in most cases, an e-commerce platform that’s lagging behind too.
So yes, these big retailers do need to cull stores, develop their e-commerce and improve their in-store retail experience. But will just catching up be enough? And what does this mean for those less affluent areas and their gradually dying high streets?
Perhaps the answer lies in the repositioning of retail within the business. If retail were to be considered part of the marketing mix rather than purely a profit centre, then its value becomes much greater – not only does it drive brand recognition and provide a great platform for interacting with consumers, it also offers much better ROI than other marketing disciplines.
Yes, this would probably mean smaller, nimbler stores and perhaps less choice for the consumer on the high street (because the focus of sales would be via digital channels). But the model offers fantastic opportunities for retail experiences, virtual dressing rooms, personal shoppers, one-off events etc. – as well as a convenient pick up point for online purchases.
And because this style of retail store is less expensive to run, it means the big guys can keep a presence on those less affluent high streets. This gives them a market advantage over their online competitors, and also means they’re doing their bit to keep retail working across the UK.