While some might be sounding the death knell, these forecasts are premature – instead, what we’re seeing is a case of rapid evolution.
To misappropriate Mark Twain’s famous quote, news of the high street’s death has been greatly exaggerated. There is no doubt it’s undergoing a seismic shift, with the option to buy online continuing to change the landscape. We’ve seen several historic retail businesses in crisis, while online operators have been acquiring brands which have previously been synonymous with the high street. Supported by a growing army of delivery workers crisscrossing the UK, e- commerce is providing customers with a level of convenience that’s hard to fight back against. It’s had some commentators claiming that it’s no longer a question of whether the high street is dead, it’s now about “what we do with the corpse”.
While some might be sounding the death knell, these forecasts are premature – instead, what we’re seeing is a case of rapid evolution. From a retail perspective, there will always be the call for an in-store option from people who want or need to ‘try before they buy’ or talk through their options in person.
While others still crave the social experience – they want to combine shopping with food and drinks with their friends. While this remains the case, the high street will always have a fundamental role to play in our culture.
Breaking down the siloes
There is a clear need for retailers to swim with the tide, however. Persisting with a siloed structure that separates the online operations and physical store is non- sensical. If data isn’t being shared or leveraged to form a joined-up shopping experience from search to buy, retailers will fail to satisfy their customers. This is resolved by bringing together data sets from both the online and physical in-store offerings – such as EPOS, demographics, footfall and psychographics. Analysis of these various sources of information helps to provide a holistic view of what customers want. By creating a better picture of how their online and offline shopping behaviour is overlapping, we can not only tailor the in-store experience, we can determine what the role of the store should be.
This information can inform whether the current store is simply too big, for instance. Would it be wiser to open a smaller showroom style store with limited stock, rather than operate a warehouse facility on the high street?
Some of the new car showrooms, for brands like Mitsubishi and Ford, are interesting examples of this shift. With sales assistants providing experience, advice and in some cases assisting the customer through the online purchasing journey in-store.
Becoming a destination venue
Alternatively, the data may tell us that high street offerings should orientate towards specific product lines or brands. In this model, the store would offer a fundamentally different role – one that is focused on providing a positive experience to the customer and become an active billboard for the brand. If revenue and store size is matched properly, this could act as self-liquidating advertising.
This approach also respects the role the internet is now playing in the buying journey. Almost all information gathering is now taking place online, with shopping trips having morphed into more of a “destination experience” rather than a browsing experience.
When a store becomes a destination in this way, the physical location of that site doesn’t necessarily need to be on the traditional high street, however. Stores could relocate to less central, more unusual locations. It could be situated in an area that evokes a greater synergy with the brand, for instance – perhaps where urban re-generation is taking place, or on the edge of it.
This may also be an opportunity to secure lower rents or find a space more appropriate for the showroom approach. Retailers can evaluate the potential of these locations with geospatial analysis, to understand how the proximity to different businesses in the vicinity and the various transport links surrounding it could enhance in-store performance.
With geospatial and customer information in hand, we can then ensure the in- store experience fits with the brand’s target demographic. This also includes sensory experiences – paying attention to elements such as appearance, smells, sounds, temperature, etc.
Re-evaluating location values
It’s not just retailers who have a stake in gauging the value of the high street though. Restaurateurs, franchisees and, of course, the property owners all have a vested interested. It’s therefore critical that all parties are collecting their own data sets to gain a holistic view of how a property should be effectively exploited. There’s little doubt that, as some businesses look to close or move, the value of high street locations will change. In many scenarios, some sites will not be worth what they once were – we’ve already seen several high street chains frantically looking to renegotiate rental prices with landlords in order to keep businesses profitable.
It may well be that retailers simply need to downsize, however. If this is the case, landlords may want to consider repurposing their sites into smaller eclectic units – and this may well help them to maintain premium rental rates and spread risk across more tenants.
Without data, however, the value you put on each property is just guesswork. If companies fail to conduct in-depth analysis of customer and geospatial information, they could well be under or overestimating the value to their business. With this data, however, all parties can gain a better sense of what each location is worth. As much as this may prompt businesses to reconsider their current estate, it can also reveal new opportunities which could breathe new life into the high street.
John Taylor - Managing Director, Geoplan
This piece was first published on Retail Sector