Robert Hardie and Terry Willcox of retail consultancy Mentor explain how appointing the right person can enhance communication between retailers and agents.
According to the Oxford Dictionary, retail is defined as the “sale of goods in small quantities at a time and usually not for resale”. The critical words are “in small quantities” because they imply that many transactions need to take place before sales volume is achieved. It is these individual transactions which are so important to retailers and yet about which so little is understood by the retail property profession.
Apart from the obvious “working on the shop floor”, there is another way to understand retail and the elements that it requires. Traditionally, people would invade their nearest town on market day. The market was the focal point for activity and was a vibrant place full of chatter, barter deals being struck and money changing hands. It was an exciting place to be and, not surprisingly, pubs and shops grew up around to feed off the captive audience at a time when they were buoyed up by the surrounding buzz.
Today this buzz is still at its highest in a busy market situation and that is one reason why Sunday market are so popular. Operators who shun the high cost of market research and rely on their natural instincts are reaping the rewards.
Customers enjoy the atmosphere where the retail offer is so strong that, when combined with the bustle of the crowds, an individual wants to buy something and becomes a soft target for an impulse purchase.
This atmosphere is not only achievable in markets. It can be found, albeit to a lesser extent, is any retail environment. Winchester High Street, York’s Coney Street, North London’s Brent Cross, central London’s Oxford Street and South Yorkshire’s Meadowhall all have the buzz.
Unfortunately, this buzz is hard to define and impossible to teach. It comes from experience and is something people feel. Regrettably, few in the retail property business recognise it and still fewer know how to create it.
What needs to change is the contact between purely property-based operators (landlords, developers, agents etc) and the retail sector.
Until the early 1970s many multiple companies had property directors or managers who were retailers. When growing retail sophistication, buoyant trading conditions and refined property requirements then combined to revolutionise the way that retail property was dealt with, companies employed property professionals from external sources and these individuals took a pride in understanding their employer’s needs, concerns, likes and dislikes. In short they “got inside the retailer’s brain”.
The frantic pursuit of market share, through increased floor space, during the 1980s, led to demand for conscientious property managers far outstripping the very limited supply. At the same time, many of those who were proficient at the role were promoted from day-to-day dealing or poached by developers. The in-house property team typically became a group of agents dedicated to working for a single client.
That was partly because, during the past decade, the prime objective when recruiting new staff became solving the problem. The problem was given to personnel and headhunters by the property director. The right applicant became somebody whose credentials were obviously strong and who, if they failed, could not bring any disrepute to either headhunter or personnel executives. This led to the appointment of a safe individual with a degree, a good line in patter and an impressive-looking CV while the potentially more risky people with flair and imagination were usually excluded at the first hurdle. The successful applicants knew the theory and often understood the finances, but had difficulty with the practical reality of the market. They could apply tried and tested practice, but had problems when that failed.
In-depth understanding and with it the ability to translate between the language used by the property world and that used by retailers has disappeared. Given this situation, it can hardly be surprising to hear that retailers’ most common complaint is a lack of understanding of their business among agents.
This is not the agents’ fault. They are employed to do a job which, simply, could be described as introducing buyer to seller and vice-versa. The shortage of those who are capable of relating to both sides has left owners with no alternative but to ask agents to try. With few role-models left in retail companies a good example is hard to find.
The lack of retail understanding is frequently highlighted by various influential commentators, and several of the major institutions have acknowledged that there is a lack of communication. One of the main West End firms of surveyors has appointed an ex-retail property manager at senior level and more than one other has plans to set up a specialist department to deal with the problems of shopping centres.
But this latter development will only be successful if new consultants, with retail backgrounds, are recruited as part of the exercise. There is no point in merely reshuffling the same people who played a significant role in the original design of those centres, and hoping that this will be sufficient to solve the problems.
These stumbling and, as yet, inadequate steps of the agents and institutions to gain greater understanding of retail must be matched by the retailers themselves. Any estates director or manager who replies to a question: “I don’t know, I’ll ask the retailers,” is failing in his job.
The Property Managers Association has often claimed that retail estates management is a profession in its own right. That is true but, to qualify as a professional in this field, one needs more than a knowledge of shops: one also requires a knowledge of shopkeepers and shoppers.
Retail companies must encourage their in-house property teams to understand retail. A true retail estates manager will command increased respect from his agency colleagues because he will be able to respond more quickly and with greater authority.
