Published by Matthew Deaves on Thursday, 19 Dec 2013
Walk through many high streets and what was once an array of bustling businesses, with the exception of some of the same big brands, is increasingly dominated by a range of discounters, charity shops, cash converters and elaborate photos in shop windows to mask vacant premises: over 10,000 at the last count. As we all know, the high street in many parts of the county has been savaged by the growth of out of town retail parks and giant malls which grew at such a rate that many customers are now within a short drive of two or three of these. Recent research in Oxford showed a 5% fall in the High Street’s multiple shops over the past two years.
The parks and malls were the result of ambitious plans to provide the ultimate one-stop shopping experience, with vast footage, extensive product ranges and unique offers to tempt the customer. But as we have all learned, the onset of online shopping and increasing accessibility to all with apps and smart phones has exposed the huge cost base of these vast sites and significantly eroded margins. So much so that apart from the big centres, many retailers are have been seeking to reduce footage, concentrate their ranges and balance their bricks & clicks offering.
The record recent Cyber Monday, grossing an estimated £5,000 a second for UK retail, serves to further reinforce the perception that the stores risk becoming vast shop windows to merchandise and for shoppers to peruse goods before purchasing them online. So are stores really to become aesthetically pleasing marketing places and simple collection points? Some might think so and they view the future being dominated by e-commerce. Yet with this as a backdrop, a newer retail phenomenon seems to be bucking this trend, with the growth and regeneration of neighbourhood and convenience shopping. The same Oxford research shows numbers of independent c-stores up by 17% and multiples up by 8% over the past two years. One might wonder(with the trends of the last 10 years) how local shops, which during their own lifetime have been hit by the high streets and subsequently retail parks, are now able to blossom and fight back? In particular it can be bewildering; bearing in mind that many are independents and therefore don’t have the buying power of the major chains; neither do they have the depth of marketing resource to promote their latest array of goods and offers. So how are they competing and regaining a foothold?
Some commentators attribute this to customers’ weariness of trudging around the huge hypermarkets as well as an increased social consciousness: consumers are aware of both the economic and social value in shopping locally and supporting the smaller independent. Equally the big four supermarkets have themselves joined the convenience market so increasing the offer, ranges and raising the footfall of neighbourhood shopping. In their desire to grab even more of the market, they have indirectly credentialised and rejuvenated the local parade. In fact so much so that the Association of Convenience stores claim that the market is now worth £37.6bn,with approximately 400,000 employees.
This growth is not only attributable to a heightened and more conscientious shopper but also to new niche offerings. One such independent, David Clarke, acquired a long standing conventional butchers in 2011, in Leverstock Green, a suburb of Hemel Hempstead, and subsequently transformed this into a destination shop, attracting customers outside of the local community with its offering of new cuts, flavours, spices and ranges. This has flourished despite the presence of three of the big four supermarkets within two miles away. Not satisfied with this, when a neighbouring premise became available a year later, he acquired it and created a gourmet delicatessen and just six months after that, he extended this to provide a deli and dining experience.
So is this really about the inevitability that everything eventually turns full circle? Or is this more the case that,no matter the circumstance, if you can identify the niche, find the location, provide the service and create the experience, customers will come.
If you want to learn more about how to succeed in retail in these tough times, why not join us at the Oxford Masters from 10th to 13th March 2014. We’ll not only be identifying current consumer trends but also creating a picture of the future of retailing and how you can capitalise upon this. You’ll be joined by the likes of Ian Cheshire, Chairman of the British Retail Consortium and Group Chief Executive of Kingfisher plc, Tom Joule, entrepreneur and founder of Joules and Dr Jonathan Reynolds, Academic Director, Oxford Institute of Retail Management, Saïd Business School, University of Oxford.
Mike Parkes, Programme Director, OSS Masters
Reference: Oxford research