Retail goes back to the future
July 4, 2019.
Julian King, Partner – National Head of Retail at RLB UK, discusses a new way of looking at retail space through repurposing and repositioning.
They say that every evolution cycle comes back on itself if you wait long enough. That for every few societal steps forward we take, we take one back to the past. It was with this in mind that I recently listened to Creative Navigator of Milligan, Paul Hanegraaf, who spoke at our Property Directors’ Club Summer Dinner, a quarterly event we hold for senior estates professionals, in partnership with FK Restoration & Cundall, to discuss and debate the opportunities and challenges ahead of us in the retail sector.
Paul and his team have created a new way of looking at retail space, they call it CreativeTrade and it’s borne out of listening to what consumers want today helping to repurpose and reposition the retail space for the future. Transformation in the retail sector is normally aligned to economic change that alters the marketplace, however Paul explained how the seismic shift occurring now was not entirely being driven by economics, but by behavioural change of the consumers.
This is something close to our hearts at RLB and something I have written about numerous times. The rapid changing face of retail – the struggle of high street giants to modernise their estate for today’s consumer, the battle with online providers over convenience, the rise of the discounters and direct-to-consumer trading – all things that have taken their place in the retail world and their share of the market.
We are all aware of the behaviours associated with the Millennial generation. The need for transparency, the demand for the supply chain to be ethical, the aspiration for less “stuff” but more things they really love, for purpose and meaning behind the brands they buy. With this new generation comes a different way of shopping. Paul highlighted how this new era of shoppers clearly separate their “needs” and “desires” with needs provided by online retailers who offer convenience, speed and the best cost. However, their “desires” require more of a story behind them – they need to be crafted, to be created, to be personalised. A bit like the old days of the butcher, the baker and the candlestick maker – there is a consumer shift to wanting to know where their goods come from, what they are made of, and how they get from their place of production to their place of purchase.
Provenance is all…but it is also important to acknowledge the emergence of the new brand. It is much easier today to grow a brand quickly, to keep the product range narrow, quality high and reach many consumers without retail space, yet many of the new brands want to reach directly to the consumer through commerce, just not in the form or manner we as property people traditionally share it. CreativeTrade is working with emerging and mature brands, in as much as the consumer is interested in the provenance of the product, they are interested in the ability for the company to grow.
Paul and his team have created their strategy around these new retail truths, a new take on the old way of retail. Building marketplaces around independent craftsmen/women, they are taking consumerism to meaningfulness by creating the CreativeTrade marketplace. Taking uniqueness, quality and the art of making and ensuring these are at the top of the list of the criteria for inclusion so that the retail space becomes more than just a marketplace. It brings collaboration, co-habiting, sharing of space but it also brings skills and an educational element to help monetise skills rather than just products. The concept partners with independent companies and helps ensure their spaces are supported, whether it is through managing their space or their bookings and selling their goods through a curated online marketplace all while the makers continue to make and teach along the way.
With a sense of community and of place, the collective retail/living/educational spaces become destination hotbeds for creativity, fresh ideas, regeneration and recalibration of tired town centres. The spaces bring in Universities and Business Schools to generate incubators for start-ups, large corporations such as Legal & General invest as part of social value, and government bodies and trade bodies come on board as a new formula that allows individuality driven by consumer demand. Logistically it all makes perfect sense as the independents see economic occupancy costs, short term rentals rather than long term leases, and they can sell their skills rather than having to meet production demand as their product’s popularity peaks.
At RLB, we watch the shape of retail changing all the time – from high street, to out of town, to pop-ups to multi-purpose spaces. New concepts and agile ways of thinking, driven by customer demand is central to this evolution. Looking back as well as forward is key not only to watch the pendulum swing from generation to generation but to take lessons from our forefathers and mothers and make it relevant in today’s world.
Paul and his team are not alone in their vision. We have already seen the Time Out markets model of successfully leasing space, curating and hosting local businesses alongside those from New York through Lisbon. Their new market-based concept has helped record a 19% increase in overall company revenue YOY with a 216% rise in live events. Westfield have become masters of blending experiential with retail and fusing retail and entertainment into one space, showing that customers need and want more reasons to actually visit stores. By enabling their customers to have an immersive retail experience they have created a successful platform which continues to buck the general retail declining trend and in 2018 reported combined sales at £ 2.2 billion across its UK sites.
In sync with the experiential retailing trend Samsung are fast moving away from their traditional distributor channels of retail. Tanya Weller, Director of Samsung Showcase talked recently at a Bisnow Retail conference about opening their Samsung shop at Coal Drops Yard, Kings Cross with the aim to build the brand and what it stands for and own the end-to-end customer experience. At the same conference John Lewis’ Partner and Sales Manager of Gifting, Miranda Graesser talked about giving space to experience rather than product with their personal styling area and demonstration kitchen within flagship stores resulting in exponential lifts on sales. And a final mention to the huge experiential leap forward by ‘Casper mattress’ with The Dreamery in New York which offers sleep rooms for $25 an hour. A concept bound to be repeated in the UK soon.
Innovation and experience is critical to evolving the new breed of retail spaces and bringing us out of the retail malaise that many of the larger retailers have been experiencing. Listening to customers and understanding their journey to purchase is also key. Learning from the past and taking those values that sit comfortably in the future are all elements that need to be considered. And then building, reducing, mixing and modernising our estates to reflect these many factors, in a cost-effective way that drives footfall and lifts sales is the ultimate goal.
RLB is currently helping both developers and retailers to bring schemes and concepts to life and helping to create a better tomorrow.
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