I’m no expert on the retail sector but it strikes me that the High Street high-rent, marble-paved, indoor shopping mall is heading for an even more radical change than many expect. There is a maelstrom of factors in play and some of those are far from temporary.
Obviously, the economic situation is making people spend less and to consider what they do spend more carefully. Announcing their results a couple of weeks ago – which included increased market share in both Food and Clothing as well as a 13 per cent growth in profits – Marks and Spencer’s CEO Marc Bolland noted that customers were tending to ”buy once and buy well”. It would seem that the Trend for Tat is dead. As consumers turn away from cheap and “disposable” clothing, I wonder what that means for the likes of Primark which grew rapidly on the back of flushable fashion.
“There’s a brand new shopping centre seven stories high
There’s bound to be a sale or two, something we can buy
There’s four floors of parking and we’re sure to find a space
We’ll spend all the money that the government doesn’t take.”
The first to go are the marginal shops which sell highly discretionary and usually highly priced “stuff”. And “gift” shops. In time, as purse-strings begin to loosen again, the level of frivolous spend may well increase. But it may not be on the high street…
My Mate Amazon. Here’s the real problem. People sometimes complain about the loss of the local shop. The point is, though, that amazon not only offers me a far wider range of music or books than the largest bricks-and-mortar store, it also knows me better than the smallest corner shop. It knows what I like and what I’ve bought recently; it knows what I’ve bought for other people (a boon for the absent-minded) and what I’d like to receive (a boon for relatives and the gift-minded); it offers me selections, informs me of the latest releases and tells me what others thought. If I’m sitting at my desk – or in front of the TV – and I think of a book I want/need, it’s on its way to me in a couple of clicks. I’ll probably have it before I have a chance to visit the local book-shop.
I love Waterstones’ stores. They have passion and knowledge and all that a good bookshop should have. But I worry for its future.
Similarly, I’m mildly surprised at the proportion of my clothing budget which the very fine chaps at Charles Tyrwhitt capture. It started with shirts but the combination of excellent quality and service, along with a smart, intuitive and helpful web-site (which remembers my size even when I don’t, and knows what I like) means that my shopping there has now extended to shoes and even suits.
The Coming of Conversation. Technology always changes the balance of power – whether its cannon (at the end of medieval times) or conversation (in this social media age). Social Media impacts both web-based retailers and the more traditional high street variety. It can be either positive or negative in impact but is nearly always unbelievably fast. Witness Lilly Allen’s tirade yesterday against Ryanair. What would once have been a quickly forgotten private frustration instead became an international news story which added to an ever-growing narrative about the low-cost airline’s cynical pricing policies and hidden charges.
Smart retailers – of all sizes – will use social media to facilitate customer engagement, to open up a conversation. A famous pioneering example is the work which Hugh MacLeod did with Saville Row tailor Thomas Mahon, creating the English Cut blog and a global micro-brand into the bargain. Larger and more current examples include Starbucks’ FaceBook page (with nearly 23 million “likes”). Why would 23 million people bother to interact of a web page about a coffee-shop? Because they feel engagement, affinity, community and loyalty. Take a look at their page: people chatting about their favourite beverages; some kid boasting about his sugar-eating prowess – frivolous (almost certainly), inane (perhaps) but engaged? Absolutely. Not to mention a stream of rich, real-time customer feedback.
Retail is changing. If we lose the bland homogeneity of the shopping mall, that would be no bad thing, but many good things could also be lost in the flood unless retailers embrace and engage with their customers in meaningful conversation.