The sombre face of the high street
For years the death of the high street has consistently made the headlines but this year has definitely painted one of the bleakest pictures with big names like House of Fraser, Debenhams, Claire’s Accessories, Toy ‘R’ Us, Poundworld, Mothercare, New Look, Coast, Orla Kiely, Homebase, Carpetright and many more retailers reporting big losses or going into administration. Additionally, high profile retailers reported terrible trading conditions in the month of November and overall footfall fell by 3.2, the sharpest decline in nine years.
Mike Ashley, Sports Direct boss, said:
“November was the worst on record, unbelievably bad,” said Ashley. “No one could have budgeted for that. Retailers just cannot take that kind of November. It will literally smash them to pieces.”
Helen Connolly, chief executive of Bonmarchè, issued a similar warning about the trading downturn “it is unprecedented in our experience” and “significantly worse even than during the recession of 2008-09.”
Comments that sent share prices tumbling, demonstrating just how volatile the markets are at the moment.
But what has caused this level of widespread demise?
There has been much discussion around the factors that have brought the high street to its brink, from the continuous rise of business rates and rents, the weather, Brexit, consumer spending confidence, inflation, price hikes, and the rise of pure play retailers. Whilst the political drama unfolds and the final deal will undoubtedly impact the high street further, we’d forgive you for thinking that the total collapse of bricks-and-mortar retail is imminent. But is it so bleak? And what retailers are winning the market share?
What are the success stories?
Retail parks and shopping centres have also experienced dire footfall as people turn to more unique shopping and leisure experiences. However, The Crown Estate’s £140 million Rushden Lakes venture has proved a success for the company in its first year of trading with further expansion planned on the site in 2019.
The Crown Estate share dtheir thoughts on Rushden Lakes first year of success.
Hannah Milne, director of regional at The Crown Estate, said:
“Rushden Lakes was one of our highlights. Across the country, our focus is on creating brilliant places in the right locations, and Rushden Lakes is a fine example of this bespoke approach.” She continued, “Rushden Lakes is a destination like no other, attracting people locally and from further afield to enjoy a great day out.”
Rushden Lakes is a retail and leisure concept that combines high quality retailers from independents to high-end brands and main high street retailers, as well as a good selection of restaurants and leisure activities such as canoeing, biking and climbing.
This type of experience destination is the start of rejuvenating bricks-and mortar retail.
Holly Tucker, Not On The High Street Founder and shop independent campaigner, shared her thoughts recently on Instagram, saying:
“BUT, guess what areas are doing really well; seeing growth and in good numbers? Everything NOT-ON-THE-INTERNET! Yes, the industries and businesses doing really well are the shops giving people an EXPERIENCE.
So cafes (thank F**k!), ice cream parlours, barbers, beauty salons, independent restaurants and independent bars (thank double F**k!). Spaces where you need to be physically present – are winning. And so here’s my theory and what I’m building – the future of the high street will be won by those who allow their brand to amplify physically and digitally. So what you do physically (well until we are all wearing headsets) you can’t do online, and what you do online is complimented physically, but it has a far more utilitarian feel. For me, I just see the opportunity for brands to stop being so 2D online and start to push themselves to understand what is the ‘living 3D experience’ of their company. Because we all want to go to our high streets/communities, it’s just the high street isn’t doing a good enough job, to draw people back!”
We couldn’t agree more with Holly, brands that don’t adapt quickly enough with innovative store spaces, ultra-convenience and enhanced digital offerings will continue to lose market share.
Picture credit: Fortnum and Mason
Fortnum and Mason
One retailer doing just that, has been around for 311 years: Fortnum and Mason continue to innovate and adapt, winning the hearts and minds of its customers. The retailer recently reported its sixth consecutive year of growth with sales up 12 per cent to £126 million and profits up 26 per cent to £9.6 million. So what’s their secret?
Zia Zareem-Slade, Customer Experience Director at Fortnum’s explains how they rise to the challenge of being an 18th-century heritage brand operating in a 21st-century retail environment.
“Staying relevant…is the reason why our brand has survived and thrived for 300-plus years. So, striking the balance between heritage and modernity is something we’ve been doing almost as long as we’ve been trading,” says Zareem-Slade.
For further reading, this article from a few years ago is still very relevant and provides further insight into why this brand is succeeding: Fortnum and Mason.
Picture credit: Dr Martens
Another brand that posted positive profits and sales is Dr Marten’s footwear. Earnings grew 33% to £50m in the year to March, with sales up 20% to £348.6m. This is a brand that had to restructure its business in the late 90s and has since gone from strength-to-strength with its brand partnerships such as Brewdog, its concept stores, music culture and its ties to the nostalgia of the punk scene. Their cool DM Boot Room venue in Camden is a great example of how a brand is creating a cultural experience and powerful connection with its customers, really cementing its brand persona and essence through every touchpoint.
Picture credit: Selfridges
Selfridges has defied the high street trend of declining sales and posted an 11.5 per cent jump to more than £1.75 billion, which is an upward trend in earnings for the fifth consecutive year.
MD Anne Pitcher said: “If you can create a sense of fun and the unexpected that inspires people to keep coming to your stores, it is a powerful recipe.”
In a recent interview with The Times she said that all of the company’s stores “did well as more people than ever before visited them and we have recorded outstanding growth in our digital business. I think this is testament to the amount of focus we pay to experiences in our stores and how we engage with our customers.”
Selfridges invested £300 million in a revamp of its Oxford Street flagship store and created The Bowl, it’s in-store skate park.
Pure players go all bricks-and-mortar
There have also been some great examples of pure play online retailers who have moved into bricks-and-mortar physical spaces and have seen their sales rocket. These pure players take the efficiency and convenience of online and enhance it with physical stores and showrooms, which bring the brand to life, creating a truly immersive and seamless omni-channel experience. Below are just a few examples of online retailers that I’ve taken the leap to bricks-and-mortar whilst other online brands launched pop-up stores and showcased their brand at events and festivals, all in a bid to amplify their brand, fuel growth and develop stronger relationships with their communities.
Picture credit: Missguided
Picture credit: Made.com
Picture credit: Amazon Go
What are the common themes of the retailers doing well?
- They deliver a distinctive brand story
- They continue to innovate
- They create seamless and delightful experiences
- They fuse entertainment, leisure and shopping
- They provide convenience
- They are personal and different
- They embrace technology – virtual, augmented, online, in-store – creating one seamless brand shopping experience
- They focus on culture, connection and complimentary brand partnerships
- They know their audience and what their customer wants
- They are agile and adaptable to the changing needs, wants and behaviours of their customers
There is no denying that the retail economy is hyper-competitive with tough trading conditions, but there are brands that are clearly getting it right and growing. If we look at the troubles experienced by certain retailers and restaurants this year, it paints a clear picture; they have failed to make decisions quickly enough, to adapt, reinvent or reposition their offering to better reflect what today’s consumer wants and needs.
In the past brands like Nokia, Blockbusters, Kodak and Woolworths failed to adapt to the market and their audience, ultimately this led to their demise from the high street. The future of retail will be interesting for insightful brands, where multi-sensory, omni-channel experience-led concepts are required to create more interesting and connected shopping and leisure moments with consumers.
According to PwC in the first six months of 2018 2,692 stores closed and 1,569 stores opened, leaving a net closure effect of 1,123.
Allways Media create brand value, customer engagement and commercial growth for insightful brands. To discuss how we can help your brand resonate more authentically with your audience, please contact Lorraine Fowler on Lorraine@allwaysmedia.com or call 0330 333 8718.