By 5th Mar 2018|
The retail industry is in the midst of some huge changes. Since the credit crunch and economic slowdown of 2008 the retail industry has been placed under enormous pressure to grow and redevelop itself. Already some of the UK’s most famous and longest established brands have fallen casualty to the times and more are sure to follow. Falling consumer confidence, stagnant wages and rising costs for retailers have all been well established as challenges facing retailers… also well known is the rise of the challengers. Many of these new brands have originated online themselves and look like they’re running circles around the competition.
Is the end of physical retail inevitable?
Increasing online sales have become a sort of bogeyman for the physical side of the retail industry; no one can deny it’s played a serious role in falling footfalls to High Streets and shopping centres and yet many retailers seem incapable of finding a way to counteract its influence. For some retailers, particularly fashion brands catering primarily to a younger audience the move towards online has been smoother and some may already be coming around to the idea that a future with lower overheads solely online may not be as bad as they first feared.
ASOS a digital native brand had £1.8b in sales last year with profits up 145%
Where does this leave local councils, BID groups, shopping centre management and a whole host of other stakeholders including the people who visit these locations though? For them abandoning physical retail destinations that form not only a key part of the local economy but also of the local community is neither desirable nor an option.
1st Class, 2nd Class or by Drone?
More than anything else, the move to online has changed our expectations of what shopping should be. It is unmatched in terms of its convenience and speed with a vast range of choice that the best stocked storefront could never hope to match. More delivery options are popping up every day, meaning that far from choosing standard or first class delivery, you could now have it delivered in an hour, collect it from locker towers or maybe in the not too distant future just have a drone drop it down your chimney like some sort of Sci-fi Santa Claus.
“Those leading the charge for online also lead it offline”
How can a physical retailer hope to match this? In short, they can’t. There is no way the online experience can be replicated offline, but neither can a physical experience be replicated online (yet).
Millennials and Generation Z are, for obvious reasons, the future of retail. They more than any other groups have driven the transition to online if not with the power of their spending which is still dwarfed by older generations then by their relentless drive for convenience spilling over to their parents and grandparents and the companies who are so focussed on providing it. However they may also be providing the solution to the question of what becomes of physical retail in an online world.
A VR experience can transform a shopping trip into a memory
Market research continues to show that by and large, younger generations value experiences over physical possessions. This means that while online shopping may be functional it does not outclass a physical experience; the challenge for store fronts and retail venues is not to provide more options or increase the speed (a shopping trip already provides the sort of instant gratification that online never can) but to make the experience more enjoyable, more exciting and more memorable.
Leading a revolution in retail
How do we achieve this revolution in retail? Previously only the most luxury shops would offer this all encompassing experience with personal shopping, fashion shows and maybe a glass of something sparkling. It’s time to move out from these pre-conceived ideas of what a retail venue can and can’t provide. While a scheme may not be able to provide a personal shopper to every visitor, technology is starting to fill the gaps with many locations now starting to launch their own apps with personalised recommendations for visitors.
Third party events can also take a lot of the strain off of shopping centre management with simple features like a changing range of street food helping to keep shoppers entertained, intrigued and coming back for more. Experiential events such as VR experiences can also help to transform what may be just a visit to the shops into a story people are telling their friends later that day and a memory they hold on to and come to associate with the venue.
“Changing food options can help to keep shoppers coming back for more”
Ultimately the future for retail schemes is a combination of risk and opportunity. The risk is by doing nothing we will see more destinations becoming shells of their former selves. However the opportunities are huge to turn a shopping experience into something that can breathe new life and character into locations. The future for retail destinations is not set in stone but it requires fresh thinking and bold ideas to make sure these locations continue to thrive.