Gerry Demopoulos is director of Tower London, which has three stores in Wood Green and Walthamstow and won Independent of the Year at the Drapers Footwear & Accessories Awards 2014.
September 2008, the outset of the banking crisis. Retail analysts predicted that Christmas would be the toughest on the high street since the recession of the 1980s. Shoppers reined in their spending and retailers undertook aggressive price discounting to entice customers into their stores. Household names in retail tumbled, from Peacocks to HMV. We were told these businesses folded because they didn’t acclimatise to the new reality - ecommerce, the new king.
Shopping had changed forever. Outside of food people didn’t want to buy anything in store anymore. They wanted it online, at the touch of a button, in the middle of the night and with a 365-day free return policy. From the ashes arose ecommerce behemoths such as Asos.com, who could provide all this online service without flinching. Against their endless pockets of funding how could we, the independent retailer, compete?
Yet here we are in late 2014 and pure-play etailers are suffering, with Asos releasing its third profit warning of the year. Zalando, which topped net sales of €1.2bn [£940m at today’s rates] in 2013, is still making a loss. Buying market share is fine until the music stops. Slowly all the bells and Whistles that were offered for free to entice our customers away started to be scaled back (Asos and others removed free delivery for orders under £15, for example). The way forward, they say? Bricks and clicks, the new king.
A study by Royal Mail Group earlier this year stated that one in six online retailers are planning to open bricks-and-mortar stores in the next year. This is the time to revitalise your bricks-and-mortar retail space with a blended online offering. Almost 80 % of leases from the 1980s and 1990s on 25-year and 15-year terms are due to expire in the next five years. This must mean rents will fall. Most importantly, 90% of shoppers surveyed by consulting firm AT Kearney said they would prefer to buy in physical stores.
The simple truth is that people still love shopping with people, going out and feeling their products.
So it’s not the king is dead; long live the king. I would argue bricks and mortar never died.