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Is coronavirus the final blow for bricks-and-mortar retail?

high street

Even before the current crisis, retailers were rethinking their approach to physical stores. Will they ever recover from the blanket closures?

Streets that were once thronging with shoppers are now eerie ghost towns. Plummeting footfall as coronavirus gripped the UK led many retailers to shutter stores even before prime minister Boris Johnson ordered all clothing shops to close under strict social-distancing measures. Ongoing lockdown means there is no telling just how long our high streets, retail parks and shopping centres will lie dormant.

Blanket closures will have a long-term impact on the future of bricks-and-mortar retail – at a time when fashion businesses were already questioning the role and relevancy of stores. Even before the crisis, physical retail was in the midst of a serious decline. Stores lay vacant following restructurings, administrations and company voluntary arrangements from former giants such as Debenhams, New Look, Monsoon and Mothercare.

Now that they are unable to shop in bricks-and-mortar stores for the foreseeable future, retailers fear customers may stay away even after restrictions are lifted. The world is likely to be a very different place when the crisis abates.

There is a future for experiential retailers who add a human element to stores

Founder of a high street retailer

Retail, too, will change. Thousands of shops will simply never reopen their doors after the lockdown, experts predict. Around 20,620 shops will close for good in 2020 – more than four times the 4,547 that closed last year, according to the Centre of Retail Research.

boris johnson

Prime minister Boris Johnson ordered all clothing stores to close under stricter social-distancing measures

“This is potentially yet another nail in the coffin for the high street,” the founder of one high street retailer tells Drapers. “We hope the business will remain omnichannel, but currently it is very hard to make a prediction about stores.

“Retailers that weren’t offering something different, or something experiential, were already facing a difficult decline. We’ve seen a reduction in store sales over the last two years, which we put down to economic instability caused by the likes of Brexit.”

However, she adds: “I would say there is a future for experiential retailers who add a human element to stores. I hope people will want to come out of isolation and embrace the fact we are a creative nation that works together to get through this problem.

“People will want to get out of the house and buy. The way to do that is via bricks-and-mortar stores.”

This crisis makes it clear that it is time to stop relying on physical retail alone

Victoria Buchanan, The Future Laboratory

The CEO of another high street retailer agrees: “We’re treating coronavirus as like pressing ‘control-alt-delete’ on pretty much everything. This isn’t a case of ‘like-for-like sales will be slightly down in the second half’. It is a complete rethink of everything, including how we approach serving customers and whether that will include stores in the future.”

“Digital no longer needs to compete with the experience or sense of discovery offered by physical stores,” argues Victoria Buchanan, futures analyst at strategic foresight consultancy The Future Laboratory.

“Ecommerce is offering pure necessity and serving people’s need for hyper-convenience and security on a deep psychological level. The long-term impact of this should not be under-estimated. This crisis makes it clear that it is time to stop relying on physical retail alone. The days of ‘build it and they will come’ retail are over. Now we must meet the consumer exactly where they are.”

However, this could change if more retailers choose to close warehouses and distribution centres amid concerns about workers’ health. Next and Moss Bros have temporarily closed their online operations, and the rest of the industry could be forced to follow.

Buchanan adds that concerns about unnecessary physical contact may linger in consumers’ minds, potentially impacting whether they choose to shop at bricks and mortar in the future.

No touching

“Another long-term impact of coronavirus is the rise and desire for contactless experiences. High-touch experiences now look dangerous, and consumers will favour anything that allows them to transact in a low-touch and seamless way. Stores of the future will need to be far more flexible, and work harder to adapt to changing disruptive scenarios.”

It won’t be enough to just have a box full of stuff to sell – brands will try harder to tell stories

David Dalziel, Dalziel & Pow

There will be particular implications for those retailers with a beauty offer or beauty hall, argues Alison Cardy, managing director of design agency HMKM.

“Beauty halls are one area that spring to mind – a lot of the activity around beauty is about test and play [with products], with close contact through service elements such as makeovers that help brands express their raison d’etre.

“We’re starting a number of conversations with our clients about beauty in the post-corona world and how to create the fun, vibrancy and noise of a beauty hall when activities may be limited. There may well be some form of intervention as to what we can do and how we behave in those spaces.”

Fenwick Bracknell beauty hall

Retailers will need to rethink beauty halls in the post-coronavirus landscape 

Flexibility will be key for the store of the future, agrees David Dalziel, co-founder and creative director of retail design agency Dalziel & Pow.

“Store closures and retail failures that we would have seen over the next three or four years have been condensed into the past three or four weeks,” he tells Drapers. “Inevitably, a lot of stores will not reopen. Retailers who do open stores in the next couple of years will want creative, flexible solutions, almost treating them as permanent pop-ups.

“Stores will need to be more responsive to trends. I don’t imagine there will be a lot of investment in architecture or long-term and expensive changes to buildings. It will be more about creating spaces for brand expression and telling stories about the positive work brands are doing. It won’t be enough to just have a box full of stuff to sell.”

Flexible friends

This flexibility will also apply to the relationship between retailers and landlords. Retail has already seen a shift towards shorter, more flexible leases over recent years. This is likely to be accelerated by the coronavirus crisis. The speed at which the unfolding emergency has changed almost everything about our daily lives is likely to make retailers squeamish about committing to the permanency of bricks-and-mortar spaces.

Signing up to leases that might last for several years – and be difficult to escape should another emergency arise – now feels unnecessarily foolhardy.

Stores of the future will be a space for community, whether they are selling clothing, homewares, groceries or electronics

Alison Cardy, HMKM

“One thing I expect to see is nervousness towards real estate – and in fact towards any situation where retailers can’t react quickly to changes like this,” explains Richard Scott, executive director of property agency Nash Bond.

“We’ll see the element of flexibility that has already entered the market become more pronounced. Certain landlords are better placed to react to this than others. There are plenty that are used to long-term leases with minimal intervention.”

Community spirit

The current crisis will reshape retailers’ and consumers’ attitudes towards stores. However, it is too soon to write off bricks and mortar completely.

“Humans love contact,” argues HMKM’s Cardy. “Stores of the future will be a space for community, whether they are selling clothing, homewares, groceries or electronics. They will need to be about human interaction and gaining inspiration that goes beyond just a commodity purchase.

People will be cautious. But they will go back to shopping

Joshua Bamfield, Centre for Retail Research

“That reset and rethink will be really important, retailers will have to really interrogate what their spaces are for and how to actively bring people together.”

Joshua Bamfield, director of the Centre for Retail Research, tells Drapers consumers will miss shopping and will return to physical retail, albeit cautiously: “It won’t be like VE Day, where everybody rushes out, because clearly there will be concern about contact with others.

“People will be cautious. But they will go back to shopping. There will be a recognition that physical stores have a useful role to play and that a multiplicity of shops is more valuable than just having one type, be it online or offline.”

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