The rush of pureplays taking space on the high street shows that shops are still pivotal in retail. Drapers finds out what role the store will play in the future.
Just a few years ago growing online competition led many retail watchers to herald the death of the retail store. However, shops are still as important as ever and online retailers are now moving onto the high street.
Missguided is the latest etailer to be wooed into the physical world. The young fashion retailer is set to open its first store at Westfield Stratford City in November and has further stores across the country in the pipeline. It is not alone.
Plus-size specialist N Brown Group has opened 15 stores for former online-only brands Simply Be and Jacamo over the past three years. Online supermarket Ocado, in partnership with Marie Claire magazine, opened a health and beauty store on Tottenham Court Road, London, in August. Even the mighty Amazon has dipped its toe into bricks and mortar – it opened its first bookstore in Seattle late last year.
‘Any retailer that is not building an experience in store, won’t survive’
Jonathon Fitzgerald, co-chief executive, Mamas & Papas
So why are so many pureplays rushing to the high street? “People still want to see and feel,” says Ben Dimson, head of retail business development at British Land, who points out that online pureplays account for only 3% of fashion sales. By opening stores, etailers can build brand awareness and widen their appeal. Opening stores can also help boost sales online. N Brown chief executive Angela Spindler said she saw a “halo effect”, with etail sales growing in the areas it has opened Simply Be and Jacamo shops.
Stores also enable retailers to benefit from the growing popularity of click-and-collect, and gives them an opportunity to entice these shoppers to spend more. Dimson says British Land’s research shows that a third of click-and-collect customers go on to buy another item in the same store while a third make a purchase elsewhere in the shopping destination. “They’re more lucrative than the average shopper.” he says. ”They spend double that of the typical customer.”
Simply Be and Jacamo
Experiences and entertainment
The shop is not just a place to show your wares – Jonathon Fitzgerald, co-chief executive of nursery and maternity wear specialist Mamas & Papas, says it gives customers an experience: “It’s not enough to just have product. Millennial customers use their discretionary spend on may other things and the store needs to be an extension of their lifestyle. Any retailer that is not building an experience in store, won’t survive.”
Mamas & Papas’ new-format store on Northcote Road in London’s Battersea holds yoga classes, nutritional workshops and inspirational talks designed to bring millennial mums to store. Devoting space to these events takes away what was once a retail store’s most valuable asset – selling space. However, Fitzgerald believes this will be the new normal for stores in the multichannel age.
“The days of having every single product in store is over,” he says. “Everyone can shop however and wherever they want. We’re confident enough to turn the downstairs of our store into a studio.”
He compares Mamas & Papas stores to a car showroom: “You can come in to touch and feel and get some advice. Then you can go online and view all the benefits at your leisure,” he says.
Mamas & Papas
Premium independent retailer Wolf & Badger has taken a similar approach. “Wolf & Badger stores have evolved from being simple retail spaces to now playing the role of showroom, events space, social hub, fitting room, collection point and much more,” says managing director George Graham: “Far from diminishing, we have found the role of our physical stores is rapidly expanding thanks to the web.”
A technology-driven environment
Technology will play a greater role in stores in the future, says Sophie Ross, head of multichannel at property developer Hammerson. She believes stores will hold less stock in the future and technology, such as virtual fitting rooms, will allow shoppers to visualise how products in different colours and styles would suit them. Back-end systems should then allow shop assistants to order that product to store within hours.
“If you go to a store and can’t find something in your size you should be able to go for a coffee and by the time you come back, it’s waiting for you,” she says.
However, Graham says retailers should avoid the temptation to make the store too tech-driven: “We should instead continue to play to strengths around the more tactile, social and experience-driven features that web and mobile can never match,” he says. “Incorporating certain digital elements into the store environment to enhance and expand on the in-store experience should be encouraged but only where it does not detract from these unique advantages.”
It is clear that stores have a pivotal role to play in the future, but they have many needs to fulfil. They must provide an experience and inspiration but also convenience and operational excellence. The retailers that crack this winning formula will reap the rewards.